If we needed clarification of how Microsoft would attack the advertising market with all its new tools and its aQuantive acquisition, we needed little more illustration than the $500 million deal it cut with Viacom this week.
Microsoft only needs another 50 or so deals like the Viacom deal to make CEO Steve Ballmer’s dreams of taking 25% (by then $14 billion) of Microsoft’s revenues through advertising.
Viacom and Microsoft’s deal was pretty broad. Microsoft gets Viacom TV and film properties for its Xbox 360 Live web site, while Microsoft’s Atlas Ad Manager will handle ad serving for the Viacom online properties in the US, and Microsoft will sell any spare advertising inventory on its US sites. The two will also co-operate on casual gaming.
Microsoft in return will buy advertising on Viacom’s broadcast and online networks over a five-year period, and the two companies will collaborate on promotions and sponsorships for award shows on MTV and BET Networks.
The deal is for five years and although there is no specific value placed on it, the two mentioned $500 million for the total amount of business that may happen because of the relationship, over that period.
It’s a far cry from landing the exclusive ad sales for a site like MySpace, but it is a significant partnership and we don’t see why, if Microsoft does not screw this deal up, it won’t end up a lot more business than its initial estimates.