Thursday, August 10, 2006

MTV adding Net player to portfolio

In a move underscoring Silicon Valley's importance in the future of online entertainment, Viacom's MTV Networks on Wednesday announced a $200 million deal to acquire Internet video and gaming company Atom Entertainment in San Francisco.

With the addition of Atom Entertainment, the youth-oriented cable station picks up game sites such as Shockwave.com and AtomFilms.com, a pioneer in user-generated video. AtomFilms seeks to promote and develop new creators of online media, working almost like a talent agency to popularize sites and personalities such as JibJab, Aardman, Jason Reitman and Joe Cartoon. In June, AtomFilms had 1.6 million visitors, according to Nielsen Media Research.

The acquisition is apt to continue to fuel speculation about YouTube, the San Mateo Internet video start-up site that has become a social force in recent months with more than 100 million video views a day. For now, its founders say they are not shopping the company around.

YouTube's unpredictable amateur video may give a corporate suitor pause, at least for now, Bajarin said.

``It is a bit more of a user-created wild, wild west,'' he said. ``It's brand new. That does not mean they won't get snapped up. It's just harder for a traditional media company to see where it fits in with its overall properties.''

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