Viacom Buys Atom Entertainment for $200 Mln

Viacom’s MTV Networks has inked a deal to buy online game and video company Atom Entertainment for some $200 million. Atom Entertainment was created in early 2001 when AtomFilms and Shockwave.com merged; the company specializes in short online videos and independent films, casual online games, and (most recently) user-submitted video from Internet users.

“Atom Entertainment is a best in class and dynamic property, with brands that have dedicated, passionate followers and content that resonates with our global audience,” said Judy McGrath, Chairman and CEO, MTV Networks, in a statement. “This acquisition is in line with our business strategy of being a leader in the digital space and connecting with consumers on every platform and device they use.”

The acquisition is seen as a way to help MTV’s brand—a longtime leader amongst the coveted youth demographic—compete with online upstarts like MySpace and YouTube, which have become popular teen hangouts and are attracting significantly investment and advertising revenue. By leveraging AtomEntertainment, MTV can further extend its brand into the online world. By bringing together Shockwave.com and Atom’s AddictingGames.com with existing Viacom online ventures like recent acquisition Neopets and Nick.com, the company may be able to boast more than 50 million casual gamers playing as many as 400 million games a month. Viacom also plans to put AtomFilms and AddictingClips.com video content on MTVN’s broadband channels and user-generated content offerings.

The deal is expected to close in the third quarter of 2006.

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