Microsoft Corp. won the right to deliver advertising on Viacom Inc.'s network of websites for the next five years Wednesday, the latest in a series of deals demonstrating the software titan's willingness to spend heavily to establish itself as a major player in online ads.
The alliance announced Wednesday gave Microsoft a big partner in trying to catch up to Google Inc., the top broker of Internet advertising. Microsoft will displace DoubleClick Inc. in showing ads to Web surfers visiting MTV.com and other Viacom sites, just as DoubleClick is about to be bought by Google.
Viacom and Microsoft have a common foe in the search leader. Google last year bought YouTube, which Viacom later sued for $1 billion over copyright violations by users who posted its shows and movies without permission.
Viacom Chief Executive Philippe Dauman said the spat wasn't a motivating factor in choosing Microsoft, and he added that Microsoft's newly improved products gave his company a reasonable alternative to Google.
"Clearly you like to have competition," he said. "It's certainly good to have more than one viable party."
Microsoft spent billions this year to acquire AQuantive Inc., an ad-technology company, and has been bidding aggressively to win ad deals at sites including Facebook, CNBC and Digg, analysts said.
The companies said the total value of the five-year Viacom deal was $500 million, with money and services going both ways.
Although it's hard to tell how much money is changing hands in either direction, Microsoft agreed to license Viacom's video programming as well as offer financial guarantees that it would sell a certain amount of Web advertising. Analysts said it must have aimed high to outbid rivals.
"We were very impressed with Microsoft's willingness and desire to commit a lot of resources -- not just financial, but in engineering to build this platform and to address our needs," Dauman said.
Microsoft, which had $21 billion in cash and short-term securities at the end of September, also outbid Google and Yahoo Inc. in landing an advertising and investment deal with Facebook Inc.
"Microsoft has more cash than anyone else and will spend offensively and defensively," said analyst Greg Sterling of Sterling Market Intelligence. "They see Google as a real threat to their core business."
