Viacom, Microsoft ink $500 mil deal

Pair team on ads, content, events

Viacom and Microsoft have set a five-year strategic alliance worth at least $500 million.

The pact will see divisions of both companies team on advertising, content distribution, event promotions and games. Among the key elements:

* Microsoft will license, on a non-exclusive basis, Viacom’s long- and short-form TV and theatrical content for use on Microsoft properties such as MSN and Xbox 360

* Microsoft’s Atlas division will become the ad server for Viacom’s U.S. websites and Microsoft will have the exclusive right to sell remnant display advertising inventory on Viacom’s U.S. websites

* Microsoft will buy ads on Viacom broadcast and online networks over a five-year period and the companies will work together on promotions and sponsorships for MTV Networks and BET Networks award shows

* Viacom will work with Microsoft on opportunities to become a preferred publishing partner across Microsoft’s casual gaming platforms

“We are very impressed with how closely Microsoft’s business plans complement our strategic objectives,” said Philippe Dauman, prexy and chief exec at Viacom. “This is a novel and comprehensive partnership that demonstrates the scale of our digital operation and the value of our branded content across all distribution platforms.”

Kevin Johnson, prexy of Microsoft’s Platforms & Services Division, called the deal “another milestone in our quest to build a world-class advertising platform to serve the broad needs of advertisers and publishers.”

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