Yahoo, Viacom sign exclusive search agreement
SAN FRANCISCO - Yahoo Inc., the No. 2 Internet search provider behind Google Inc., has signed an exclusive, multi-year deal to provide search and advertising services to some high-profile Web sites owned by media giant Viacom Inc.
The agreement shuts Google out of at least 33 of Viacom's most-important online entertainment sites, including MTV.com, VH1.com, Nickelodeon.com, comedycentral.com and BET.com. Financial terms of the deal, which could be expanded to 140 more sites, were not disclosed.
The pact comes four weeks after Viacom sued Google's YouTube video unit for copyright infringement and expands the two companies' rivalry in the market for video entertainment distributed over the Web.
"We are not surprised by Viacom's decision, given its current issues with and lawsuit against Google," Standard & Poor's analyst Scott Kessler said, in a note to clients.
Yahoo will now broker search ads for the high-speed Web sites Viacom uses to distribute its TV shows, movies and other content online - one of the most significant business wins since Yahoo unveiled its new search ad technology several months ago.
Yahoo Chief Executive Terry Semel, in a statement Tuesday, said the deal with Viacom "marks the beginning of a powerful and engaging partnership between our two companies."
Viacom had been negotiating the rights to license video content to Google before it decided to sue the No. 1 search provider, which scuttled the chances of any search ad deal between them.
Yahoo's new technology, known as "Project Panama," is designed to make search query results more relevant and make the ads placed next to those results more valuable to advertisers.
Since the Panama rollout, financial analysts have increased their sales and profit forecasts for Yahoo's first quarter, which it reports next Tuesday.
Shares of Yahoo were trading slightly higher to $31.85, while Viacom shares were off 0.7 percent to $40.70.