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Wednesday, December 19, 2007
Viacom and Microsoft in Advertising Partnership

Viacom and Microsoft today announced a 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 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. Web sites and Microsoft will have the exclusive right to sell remnant display advertising inventory on Viacom?s U.S. Web 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 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.

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