Tuesday, April 10, 2007


Viacom, Yahoo team on ad deal

Multiyear partnership covers 33 sites

The battle to monetize big media's Web assets is on, as Yahoo! on Tuesday won a three-year deal to provide search advertising services to all of Viacom's 33 broadband-enabled Web properties.

Last August, Google agreed to pay News Corp. at least $900 million to provide search and contextual ads on its Web sites for five years.

Given the scope of Viacom's Web assets, including broadband sites for all its networks and acquired properties like NeoPets and IFilm, conglom likely got a guarantee in the same ballpark. But because of the deal's shorter term, the guarantee wasn't big enough for Viacom to have to publicly reveal the financial value.

Deal essentially includes all of the MTV Networks-controlled Web sites in the U.S. along with BET.com. Not included are 140 nonbroadband Viacom sites, such as one for Paramount and numerous overseas properties; these could be added to the deal in the future.

Several Viacom Web sites, including ComedyCentral.com and BET.com, are already using Yahoo! search ads.

It's a big win for Yahoo!'s new advertising system, code-named Panama, which launched this winter after numerous delays that hurt the Netco's bottom line and its stock price.

Competition for Viacom's business may have been a bit constrained, however, given the conglom's contentious relationship with the No. 1 search provider, Google.

Because Viacom is suing the search giant over its alleged responsibility for copyright infringement on YouTube, Google was not a serious contender. That likely left Microsoft as the only other major competitor for Viacom's search business.

Yahoo! topper Terry Semel's statement on the deal was an unmistakable swipe at Google over the copyright issue:

"Viacom is a global leader in entertainment that shares Yahoo!'s commitment to connecting users to the content, products and services for which they are looking while respecting copyrights and other intellectual property rights at the same time," he said.

Agreement could also open the way for the two companies to work together on content distribution or other arrangements.

Semel said the pact "marks the beginning of a powerful and engaging partnership between our two companies," while Viacom CEO Philippe Dauman added that "we look forward to growing our relationship even more over time."

Yahoo! is already a distribution partner for the NBC Universal-News Corp. joint venture to put their clips online. However, AOL won a deal to provide display advertising services for that operation.