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Microsoft's Viacom deal: Sorting out the motives

A $500 million advertising and content partnership between Microsoft and media giant Viacom, announced this morning, has led to some speculation about Viacom's motives for making the deal: Was Viacom looking to connect with Microsoft, or make a statement to Google?

Maybe it was a little of both. The question is being raised because, as part of the deal, Viacom is switching to Microsoft's advertising system for its U.S. Web sites and moving away from DoubleClick. That's the same DoubleClick that Google is seeking to acquire in a deal that appears headed for U.S. approval. And Google is being sued by Viacom for alleged copyright infringement on YouTube, an earlier Google purchase.

The Associated Press addresses the issue in this story:

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."

In any event, Microsoft says it views the Viacom partnership as an important step for its advertising business overall. Kevin Johnson, president of Microsoft's Platforms and Services Division, said on the phone this afternoon that he considers the Viacom partnership "an inflection point" for the Redmond company.

"I think the fact that you have a media company of the size and scale of Viacom -- certainly they look in the industry and they know who all the players are, they've evaluated alternative ad platforms. The fact that they've selected Microsoft is reflective of the fact that the investments we've made, the assets we've accumulated, are coming together in a way that delivers value to them. They certainly are a flagship publisher, when you look at the media and content industry."

Viacom includes BET Networks, MTV Networks and Paramount Pictures. Microsoft will be providing the ads through its Atlas platform, acquired as part of its $6 billion purchase of aQuantive earlier this year.

Posted by at December 19, 2007 1:26 p.m.
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#77383

Posted by unregistered user at 12/19/07 2:20 p.m.

"Kevin Johnson, president of Microsoft's Platforms and Services Division, said on the phone this afternoon that he considers the Viacom partnership "an inflection point" for the Redmond company."

Good to see that hope springs eternal despite MSFT getting handed its butt by GOOG, and continuing to lose share.

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