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MTV pays $200m for Atom, Viacom profit up MTV is paying US$200m to acquire Atom Entertainment, one of the dotcom era's best known survivors, famed for the shorts website AtomFilms.com, as parent Viacom reports Q2 profit up 27%. The Atom deal adds to MTV's growing portfolio of digital properties, which already includes one of AtomFilms rival iFILM, bought out last October for $50m. Together with AtomFilms, MTV also picks up its parent's other web properties - Shockwave.com, AddictingGames.com and AddictingClips.com - as part of the $200m purchase. MTV has been on a digital shopping spree since the middle of last year when it bought out online youth community site NeoPets, with a reported price tag of $160m. Since then, it has snapped up other businesses including XFire, Y2M and GameTrailers.com. The Viacom-owned company is understood to have missed out on MySpace, however, the world's largest social networking website, which hit its 100 millionth subscriber this week, and was bought out by News Corp for US$580m last September. Viacom is, however, reported to be considering a bid for Bebo, which has around 25 million registered users and vies with MySpace for the number one social networking spot in the UK and Ireland. Rumours that it's also running the rule over another site in the sector, Facebook, have also been rife. As MTV reaches the ripe old age of 25 this year, the network has been plagued by suggestions that it is increasingly out of touch with its audience. But while moves to snap up digital assets that retain links with young people are crucial to its future, Q2 results today proved that traditional revenue streams are far from drying up. Viacom reported that profit for the three months to June 30 was $416m, 27% up from $328.6m for the same period a year ago, with the rise attributed to strong advertising sales at MTV Networks. Revenue rose 24% to $2.85bn. Existing digital properties generated $51m during the quarter, representing a rise of 58%, with digital advertising revenue (68% of total digital revenue) rising by 75%. Viacom clearly believes that while digital currently represents a small proportion of total income, the steep growth curve is set to continue. Commenting on the Atom Entertainment deal, Viacom chief executive Tom Freston said: "This acquisition is right on the money with our digital strategy. It adds great scale with users, improves our casual gaming position, and brings a world-class digital video library and a fantastic management team." Jonathan Webdale 10 Aug 2006 © C21 Media 2006 
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