Viacom, Microsoft strike content, ad partnership

Viacom and Microsoft announced a broad-based, strategic alliance under which both companies will collaborate on advertising, content distribution, event promotions and games over the next several years. Microsoft will license long and short-form content from across Viacom's 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 ad inventory on those sites.

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 also work with Microsoft to become a preferred publishing partner across Microsoft's gaming platforms.

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 of aQuantive in August. AdManager -- which operates within Microsoft's newly created Advertiser & Publisher Solutions division -- will providing an ad serving solution, optimization features, inventory forecasting, real-time reporting and precise audience advertising targeting.

Viacom will provide unsold display ad inventory on its digital sites for Microsoft to sell and serve through both Microsoft Digital Advertising Solutions (MDAS) and DRIVEpm. Revenue generated by Microsoft will be shared between the two companies.

The deal has a projected base value of 500 million in financial considerations and business services between the two companies over the initial five-year length of the agreement.