Viacom's Moving Pictures

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In what may be yet another new economy acquisition by an old media giant, Viacom (NYSE: VIA) could be making a play to acquire iFilm.com. In a story that was first reported by the media-savvy bloggers at PaidContent.org and later covered by Variety and The Wall Street Journal, Viacom is looking to pay $50 million to acquire the online video broadcaster.

If the speculation bears out, it would be a good move for Viacom given iFilm's popularity. It was one of my favorite sites in the late 1990s, streaming edgy indie short films to the early adopters of broadband connectivity. It went corporate along the way. I forgave it for that. It was either monetize or perish after the dot-com bubble burst, so the site did what it had to do to stay afloat. These days the site is home to way too many garden-variety movie trailers and music videos, but that will work just fine for Viacom.

It would be a good move, but it wouldn't be Viacom's first step into digital distribution. Viacom has embraced video streaming at many of its sites. Just last week, visitors to Viacom's Sportsline.com site could watch Hall of Famer pigskin hurler Dan Marino interview quarterback phenom Ben Roethlisberger. The latest hit videos are being streamed at MTV.com and CBSNews.com is delivering the news in multimedia fashion.

Streaming video used to be a cash drain, but with the bandwidth getting cheaper and more traditional advertisers flocking to cyberspace, it just makes good business sense these days. Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) have rolled out video search engines. CNET (Nasdaq: CNET) has begun accepting videos at its popular Download.com site. News Corp. (NYSE: NWS) had no problem acquiring MySpace.com, despite its many multimedia-intensive user pages.

The economics of video monetization may not be as sweet as the frill-free perfection of paid search on text content, but it's all about growing an audience these days. We're living in a wired world, getting more connected with every passing day. There are clearly investing opportunities here. It's why Rule Breakers readers have been treated to double-digit stock gains since CNET was recommended over the summer.

The Internet has become the new toy for old media companies. They had no choice. They were following you and me all along -- and here we are.

Longtime Fool contributor Rick Munarriz doesn't know whether he still wants his MTV, but he knows that Viacom's shareholders wouldn't mind money for nothing. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.