Microsoft and Viacom will work together on ads and promotions for video games and TV shows. The deal’s terms were not disclosed, the AP reports, but the companies said the deal has a “projected base value of $500 million for the first five years” from revenue sharing, guarantees, and content licensing.
Microsoft (MSFT) will be able to use some of Viacom’s TV and film content online and in its video games. In exchange, it will purchase ads on Viacom’s broadcast and Web properties, which include Comedy Central, MTV, VH1, etc., and will also have exclusive rights to sell ads on some of Viacom’s Web sites.
But without any more detail, that $500 million is an almost value-free number: Note that the two companies aren’t saying that MSFT will guarantee Viacom a minimum payment for the right to their inventory, a la MSFT’s deal with Facebook and Google’s News Corp./FIM/MySpace deal. AP
Followup: CNBC talks to MSFT exec Kevin Johnson, who says there’s some sort of guaranteed payment in the deal, but won’t elaborate.
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