REDMOND, Wash. - Microsoft and Viacom have entered an advertising agreement valued at $500 million over the next five years.
The companies said the deal, which was announced Wednesday, includes a "combination of revenue-sharing provisions, guarantees and content-licensing agreements" amounting to at least $500 million.
Under the arrangement, Viacom will license television and movie content to Microsoft, while the software company will serve display ads on Viacom's entertainment site MTV.com via its Atlas advertising platform.
Microsoft gained the exclusive right to handle Viacom's remnant display-ad inventory and received permission to use content from MTV, BET and Paramount Pictures in properties such as MSN.com and the Xbox 360 game system. Viacom will work with Microsoft to develop downloadable games for MSN and Windows.
"This deal is another milestone in our quest to build a world-class advertising platform to serve the broad needs of advertisers and publishers," said Kevin Johnson, president of Microsoft's platforms and services division, in a statement.
The deal is said to be a move by Microsoft to make further inroads against rivals Google and Yahoo.
According to Tim Bajarin, president of technology consulting firm Creative Strategies Inc., it's too soon to predict the full impact of the deal.
"It does help Microsoft in their quest to compete more head-on with Google," he said, "but it really is too early to determine just how meaningful it is in the long run."
