Viacom and Microsoft Announce Long-Term Digital Content and Advertising Partnership

Companies sign landmark multi-year deal to collaborate on content

distribution, advertising, event promotions and gaming

Microsoft's Atlas to become exclusive ad serving platform for Viacom U.S.

web sites

    NEW YORK and REDMOND, Wash., Dec. 19 /PRNewswire-FirstCall/ -- Viacom
 Inc. (NYSE: VIA and VIA.B) and Microsoft Corporation today announced a
 broad-based, strategic alliance under which major divisions of both
 companies will collaborate on advertising, content distribution, event
 promotions and games over the next several years.
 
     The comprehensive agreement spans across the two companies and includes
 a number of significant components. Among them:
 
 

     -- Microsoft will license, on a non-exclusive basis, long and short-form
        television and theatrical content from across Viacom's cable network
        and motion picture businesses, including MTV, Comedy Central, BET and
        Paramount Pictures 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 advertising 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.
     Detailed financial terms were not disclosed, but the deal has a
 projected base value of approximately $500 million in financial
 considerations and business services between the two companies over the
 initial five-year length of the agreement. The deal includes a combination
 of revenue sharing provisions, guarantees and content licensing agreements.
 The agreements contemplate the potential for expansion of the transactions.
 
     Philippe Dauman, President and Chief Executive Officer of Viacom, said,
 "We are very impressed with how closely Microsoft's business plans
 complement our strategic objectives. 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. By taking
 advantage of industry leading assets at both our companies, this landmark
 alliance brings valuable promotional power and increased monetization to
 our wide portfolio of branded websites, which collectively represent the
 leading entertainment presence online. Microsoft's superior assets and
 expertise in the ad serving and sales business will drive enhanced value to
 our digital operations."
 
     Dauman added, "We look forward to collaborating closely with Microsoft.
 This partnership will generate significant value on both sides. This deal
 is an important example of how the growing success of our digital
 properties is driving greater revenue for Viacom as a whole."
 
     Kevin Johnson, president of Microsoft's Platforms & Services Division,
 said, "We are delighted to establish this long-term partnership with
 Viacom. Viacom's portfolio of original content and strong consumer brand
 connections are a terrific complement to Microsoft's web, gaming and
 digital advertising assets. This deal is another milestone in our quest to
 build a world-class advertising platform to serve the broad needs of
 advertisers and publishers. If ever there was a 'win-win' partnership
 across two companies, this is it."
 
     Content Distribution
 
     Viacom will provide Microsoft with a broad selection of short-form and
 long-form audio-visual content from MTV Networks, Paramount and BET
 Networks for distribution by Microsoft on properties such as MSN.com and
 Xbox 360. A wide range of content from Viacom properties is already
 distributed to Xbox 360 users through Xbox LIVE Marketplace and this deal
 adds popular content from BET Networks. In addition, Viacom will work with
 Microsoft's casual gaming platforms (MSN and Windows) to provide
 downloadable casual games to the substantial base of consumers playing
 quick-to-develop, easy-to-learn games on these platforms.
 
     Ad Serving
 
     Microsoft will provide Viacom with its proprietary ad serving solution,
 known as Atlas AdManager. AdManager is an offering that Microsoft obtained
 upon completion of its $6 billion acquisition of aQuantive, Inc. in August
 2007. AdManager -- which operates within Microsoft's newly created
 Advertiser & Publisher Solutions division -- will enable Viacom to better
 monetize its U.S. web properties, such as MTV, VH1 and Comedy Central, by
 serving graphical and video ads on those sites, providing an ad serving
 solution, optimization features, inventory forecasting, real-time reporting
 and precise audience advertising targeting.
 
     Ad Syndication
 
     Viacom will provide unsold display advertising inventory on its digital
 sites for Microsoft to sell and serve through both Microsoft Digital
 Advertising Solutions (MDAS) and DRIVEpm. Revenue generated from the sale
 of this inventory by Microsoft will be shared between the two companies.
 
     Events and Promotions
 
     During calendar year 2008, Microsoft and Viacom will partner to promote
 a co-branded website with exclusive content from at least four MTV Networks
 and BET Networks events, such as the MTV Video Music Awards and BET Awards,
 and will share certain advertising revenue generated by the site. Microsoft
 will provide a pre-determined amount of online promotion for each event.
 
     About Viacom
 
     Viacom, consisting of BET Networks, MTV Networks and Paramount
 Pictures, is the world's leading entertainment content company. It engages
 audiences on television, motion picture and digital platforms through many
 of the world's best known entertainment brands, including MTV, VH1, CMT,
 Logo, Harmonix, Nickelodeon, Noggin, Nick at Nite, AddictingGames, Neopets,
 COMEDY CENTRAL, Spike TV, TV Land, Gametrailers, BET, Paramount Pictures,
 DreamWorks and Paramount Vantage. Viacom's global reach includes
 approximately 145 channels and 300 online properties in 160 countries and
 territories. For more information about Viacom and its businesses, visit
 http://www.viacom.com.
 
     About Microsoft
 
     Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
 software, services and solutions that help people and businesses realize
 their full potential.
 
     About Microsoft Advertiser & Publisher Solutions
 
     Microsoft Advertiser & Publisher Solutions (APS) provides world-class
 advertising platforms and tools for advertisers, agencies and publishers.
 Its mission is to make buying and selling media simpler, smarter and more
 cost- effective across media and devices in the Microsoft network of
 properties and beyond. The APS portfolio includes Microsoft(R) adCenter,
 Atlas, DRIVEpm, Massive and ScreenTonic. APS businesses span search,
 display and emerging media including mobile, gaming, video on demand, and
 IPTV. To learn more, visit http://advertising.microsoft.com
 
     Microsoft is registered trademark of the Microsoft group of companies.
 
 
 

SOURCE Viacom Inc.