Old media continue to warm up to new media. In the latest coup for Yahoo! (NASDAQ:YHOO), the dot-com giant has secured a deal with Viacom (NYSE:VIA) that will allow for relevant Yahoo! text-based advertising to appear throughout the Viacom Web properties.
If you're not familiar with Viacom's empirical reach, it includes popular destinations like MTV.com, CBSNews.com, and NickJr.com. It's a great move for both companies -- Yahoo! will be claiming some juicy online real estate on which to plaster its virtual billboards, and Viacom walks away with some welcome greenery.
It's about time. Media stocks have been sluggish over the past year despite the general health in advertising. That's because a big part of every sponsor's ad campaign is now earmarked for online marketing. Through Yahoo!, companies pay as little as a dime for each targeted lead. The results are cost-effective and measurable. The same can't necessarily be said for most offline campaigns.
That's why it's been hard to see companies like Disney (NYSE:DIS), Viacom, and Time Warner (NYSE:TWX) struggle lately. Just a few years ago, they seemed like the Internet's next power brokers. Disney acquired Go.com and spun off Disney Internet Group. Viacom took stakes in popular sites like MarketWatch.com and Sportsline and branded them as if they were its own. Stock Advisor recommendation Time Warner, of course, merged with America Online.
So it's not as if the media giants didn't sample the Internet. They were scarfing it down by the plateful. However, these days, the sites dedicated to their offline properties are mostly self-promotional. Instead of cashing in on the paid-search craze -- something that Time Warner is benefiting from through AOL.com at least -- they kept their sites slick, but not monetized.
Viacom's deal with Yahoo! will hopefully knock some sense into the sleepy sector. Yahoo! shareholders especially have to love this move. Coming on the heels of Yahoo! snagging iVillage (NASDAQ:IVIL) away from Google (NASDAQ:GOOG) as a contextual marketing partner, it's clear that the company is serious about regaining its crown as Internet royalty.
With so much traffic out in cyberspace waiting to be cashed in on, you have to like the chances of both Yahoo! and Google to keep schooling old media on the new-economy ways.
Longtime Fool contributor Rick Munarriz digs media stocks. He owns shares in Disney and wrote the Orlando travel guide for Viacom's NickJr.com site. 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.
