MTV Networks to acquire Atom Entertainment

Cory Bergman August 9th, 2006

Viacom’s MTV Network division has agreed to buy Atom Entertainment for $200 million. Atom makes up AtomFilms.com, Shockwave.com and AddictingGames.com — a mix of rich media entertainment and online gaming. “This acquisition is right on the money with our digital strategy,” said Tom Freston, CEO, Viacom. “It adds great scale with users, improves our growing casual gaming position, and brings a world-class digital video library and a fantastic management team.” It also seems to be a logical fit with Viacom’s Neopets, iFilm, Y2M, GameTrailers, Nick.com and MTV.com. Full press release below…

PRESS RELEASE — MTV Networks today announced a definitive agreement to acquire Atom Entertainment, Inc., a portfolio of four leading online destinations for casual games, short films and video, for $200 million. Acquiring Atom Entertainment advances the company’s multiplatform strategy of building an engaging universe of music, gaming, entertainment, news and interactivity for targeted audiences.

Atom Entertainment is a pioneer in online entertainment with four leading brands in both games and video: Shockwave.com and AddictingGames.com are two of the internet’s largest casual gaming sites, offering nearly 1,500 free and downloadable games. AtomFilms.com and AddictingClips.com are two premier film and video sites for short-form comedy, animation, drama and user-generated content.

Adding Atom Entertainment to MTV Networks’ overall portfolio fits squarely with the company’s strategy of super-serving its targeted, global audiences with a relevant and innovative video experience online. Following MTVN’s recent purchases of XFIRE, Y2M, GameTrailers.com, IFILM and Neopets, this acquisition demonstrates the company’s continued commitment to being a premier multi-platform media company, uniquely positioned across every screen.

Tom Freston, CEO, Viacom, said, “This acquisition is right on the money with our digital strategy. It adds great scale with users, improves our growing casual gaming position, and brings a world-class digital video library and a fantastic management team.”

“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. “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.”

Shockwave.com and AddictingGames.com are part of the large and rapidly growing business of online casual gaming and will complement MTVN’s roster of casual gaming communities, including Nick.com and Neopets. By including these two Atom sites, MTV Networks will be a leader in the casual gaming business, with more than 50 million casual gamers playing more than 400 million games a month. In addition, AtomFilms.com and AddictingClips.com further expands the online video available across MTVN’s 24 broadband channels and the company’s user-generated content offerings.

“MTV Networks is a global leader in entertainment, and we are thrilled to join their family of brands,” said Mika Salmi, Chief Executive Officer of Atom Entertainment. “Leveraging MTVN’s platform will accelerate our growth and create new opportunities for both consumers and advertisers. We are proud of the business we’ve built and look forward to working together with MTVN to lead the way in the casual gaming and short-form video content business.”

The acquisition is subject to customary closing conditions and is expected to close in the third quarter 2006.