Viacom Continues New Media Shopping Spree with $200m Acquisition of Atom Entertainment

Strategic Insights

Aug 9, 2006 — 1 min read

Viacom's bid to retain its young audience and compete with new internet rivals such as MySpace and YouTube has led to another major acquisition. The company has agreed to pay $200m for Atom Entertainment, a collection of four websites offering online gaming, short films, and user-generated video. This deal follows a string of acquisitions by Viacom's MTV Networks division, including Neopets, iFilm, and Xfire. The company also partnered with Google this week, expanding its digital reach by supplying video clips to hundreds of niche websites.

Key Takeaways:

Viacom has agreed to pay $200m for Atom Entertainment, a collection of four websites offering online gaming, short films, and user-generated video.
The acquisition reflects Viacom's strategy of connecting with consumers through a portfolio of different digital offerings, from gaming to live video.
MTV Networks' CEO Judy McGrath indicated that the company's next priority would be to bolster its social networking offerings, citing Bebo as a potential target.
Viacom's traditional strength, cable advertising, helped the company post a 14% jump in third-quarter earnings, with revenues growing 24% to $2.85 billion.
Cable advertising revenues increased 10% in the US, driven by higher rates for bundled deals.
Viacom's chairman and leading shareholder, Sumner Redstone, faces questions about the near 20% slide in the company's shares since its separation from CBS.

Statistics:

$200m: The amount Viacom agreed to pay for Atom Entertainment.
14%: The jump in third-quarter earnings for Viacom.
$2.85 billion: The total revenue for Viacom in the third quarter.
24%: The growth in revenue for Viacom in the third quarter.
10%: The growth in cable advertising revenues in the US.
Near 20%: The slide in Viacom's shares since its separation from CBS.

Sources:

[Viacom's press release announcing the Atom Entertainment acquisition]
[Interview with Judy McGrath, MTV Networks' CEO]
[Article by Tom Freston, Viacom's CEO]
[Statement by Sumner Redstone, Viacom's chairman and leading shareholder]

The End of American Hypergrowth

For two centuries, the US economy grew by adding workers. That's over.

Healthcare's $5.3 Trillion Drag

How Medical Spending Became America's Biggest Productivity Tax

Breakthrough in Nanotechnology: Electromagnetic Shock Treatment Shows Promise

Researchers at the Wuhan University of Technology in China have made significant progress in the field of nanotechnology, specifically in the area of nanoindentation. A novel electromagnetic shock treatment (EST) method has been developed to enhance the microscale mechanical properties of a titanium alloy, with promising results obtained through array-based

Gut Microbiota Plays Crucial Role in Immunotherapy Success for Colon Cancer Patients

Research investigators at the Zhengzhou Central Hospital Affiliated to Zhengzhou University have made groundbreaking discoveries on the role of gut microbiota in determining the efficacy of immunotherapy for colon cancer patients. The study, which was recently published in Biochimica et Biophysica Acta, reveals that specific bacterial species and microbial metabolites

Read more

The End of American Hypergrowth

Healthcare's $5.3 Trillion Drag

Breakthrough in Nanotechnology: Electromagnetic Shock Treatment Shows Promise

Gut Microbiota Plays Crucial Role in Immunotherapy Success for Colon Cancer Patients