Viacom drops DoubleClick
NEW YORK – Media company Viacom Inc. is ditching DoubleClick as the primary provider of online advertising to its Web sites, replacing it with a rival platform owned by Microsoft Corp.
The move away from DoubleClick, which Google Inc. intends to buy, gives Microsoft a major win in its drive into the highly lucrative online advertising business.
The advertising pact is part of a larger five-year agreement under which Microsoft will also license video clips and other programming from Viacom’s entertainment outlets – including MTV, Paramount Pictures and Comedy Central – for use on its online network MSN as well as the Xbox video game console.
Financial terms weren’t disclosed.
Microsoft, a relatively late entrant to online advertising, has been moving aggressively to sign up clients for its Atlas ad-serving platform, which it acquired as part of its purchase of the online holding company aQuantive Inc. in May for $6 billion.
That price included a gigantic premium of 85 percent over aQuantive’s share price at the time and signaled how badly Microsoft wanted to play in the red-hot field of Internet advertising, which is on track to grow 25 percent this year to about $20 billion.
Google’s $3.1 billion deal to buy DoubleClick is still being reviewed by antitrust authorities.
Viacom has also clashed with Google and is currently suing the popular search engine for $1 billion over what it calls a pattern of blatant copyright infringement by Google’s video-sharing site YouTube.
Viacom says YouTube improperly hosted a large amount of video clips from Viacom properties such as “The Daily Show with Jon Stewart” on Comedy Central, while Google says it acted within the law by removing any offending video clips as soon as it was notified.
Kevin Johnson, the head of Microsoft’s platforms & services division, said Microsoft had signed up about 50 Web publishers since acquiring Atlas, including Facebook; CNBC.com, the Web site of the financial news cable channel owned by General Electric Co.’s NBC Universal unit; and Digg Inc., a reader-powered news site.
As part of Microsoft’s deal with Viacom, Microsoft agreed to buy advertising on Viacom’s various video and online networks and to cooperate on promotions for award shows on Viacom’s MTV Networks and BET Networks. Amounts of advertising to be purchased weren’t disclosed.
Philippe Dauman, the CEO of Viacom, said the company’s copyright dispute with Google didn’t have a direct bearing on Viacom’s switch to Microsoft’s ad-serving platform.
Dauman said Viacom was looking at the “totality of the relationship,” and took into account the various ways in which the companies would cooperate. However, he did say it was “very important that we do business with companies like Microsoft that respect copyright.”
Viacom has a separate deal, announced in April, with Yahoo Inc. for search advertising on Viacom’s Web sites.