Viacom Buys Xfire For $102 Million

The New York Times is reporting that communications company Viacom has purchased the Xfire gaming network for $102 Million. From the article: "Judy McGrath, the chief executive of MTV Networks, which will oversee Xfire, said it would stay focused on building a community for game players, but its technology might be adapted for broader network services. Xfire has attracted four million users since it was introduced in 2004. Of those, one million are active and spend 91 hours each month using the service. The company sells advertising on its software and Web site, both to video game makers and to mass market marketers, including Dodge, Pepsi and Unilever."

The Article

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Viacom to Pay $102 Million for an Online Game Service By SAUL HANSELL Viacom said yesterday that it had acquired Xfire, a Silicon Valley company that makes an instant message system used by video game players, continuing its quest to build Internet businesses focused on young people. The company, which is the parent of MTV Networks, will pay $102 million in cash for Xfire, which is privately held. Xfire makes a program similar to other instant message systems in that it lets users communicate with each other while they are online. Its system, however, is designed for people who play game software on their computers. Users can see which games their friends are playing and can automatically link to join them in playing games online. "We want to be where our audience is," Viacom's chief executive, Tom Freston, said. "And we know that video games are a dominant form of media for young males." Xfire has some aspects in common with social networking sites like Facebook and MySpace, another area in which Viacom hopes to expand. Viacom explored acquiring MySpace and IGN, large game-oriented networks of Web sites; both were bought last year by the News Corporation. Judy McGrath, the chief executive of MTV Networks, which will oversee Xfire, said it would stay focused on building a community for game players, but its technology might be adapted for broader network services. Xfire has attracted four million users since it was introduced in 2004. Of those, one million are active and spend 91 hours each month using the service. The company sells advertising on its software and Web site, both to video game makers and to mass market marketers, including Dodge, Pepsi and Unilever. For those selling games, Xfire will allow ads to be shown only to those who frequently play similar games. It also distributes previews of games on behalf of publishers. Viacom declined to disclose Xfire's revenue. Ms. McGrath said that Viacom was looking for more acquisitions related to games, networking and user created content. Last fall, Viacom bought GameTrailers.com, another site devoted to video about games. Viacom has some video game programming on on its other Internet sites. And it bought Neopets, an interactive fantasy world for young children, which has advertising integrated into the game.