As part of a wide-ranging deal announced Wednesday, Microsoft has licensed TV and movie content from Viacom, which in turn will let Redmond serve up ads on its U.S. Web sites.
The arrangement means that Viacom will use Microsoft's Atlas technology to deliver ads to those sites. Microsoft acquired Atlas as part of its $6 billion Aquantive purchase. Additionally, Microsoft will have the exclusive right to market Viacom's unsold display advertising space.
Microsoft, meanwhile, will be able to put shows from MTV and Comedy Central and movies from Paramount Pictures onto various products, such as MSN and Xbox, the companies said in a statement. Microsoft already distributes some Viacom content though its Xbox Live Marketplace.
The two companies did not disclose the financial terms of the deal, but said more than $500 million worth of stuff is to go back and forth under the five-year arrangement. "This is a novel and comprehensive partnership that demonstrates the scale of our digital operation and the value of our branded content across all distribution platforms," Viacom CEO Philippe Dauman said in a statement.
Kevin Johnson, president of Microsoft's Platforms and Services Division, called the deal "another milestone in our quest to build a world-class advertising platform."
The deal does not, however, cover search advertising. Viacom reached a separate deal in April under which Yahoo has the exclusive right to handle search advertising for Viacom's entertainment Web sites.
Viacom had been getting its ads served up by DoubleClick. Google is , and Viacom has a $1 billion copyright infringement suit pending against Google.
Microsoft and Viacom also said they will work together in gaming and to create co-branded Web sites for events such as the MTV Video Music Awards and BET Awards.
Updated at 3:00 p.m. PST with additional legal ethics expert opinion.
FTC Chairman Deborah Platt Majoras said Friday that she will not recuse herself from hearing the Google-DoubleClick merger case, arguing that the fact her husband's law firm is representing DoubleClick doesn't merit her recusal.
In a statement posted Friday to the FTC's Web site, Majoras said that her husband's law firm, Jones Day, is not representing DoubleClick before the FTC and noted that her husband is no longer an equity partner in the firm, meaning that his pay will in no way be determined by the outcome of the case.
Deborah Platt Majoras
(Credit: FTC)"My husband does not represent any party in the Google-DoubleClick matter," Majoras said. "He is in no way connected to the matter, nor are any of the parties to the matter otherwise currently his clients."
Opponents of the merger have called on Majoras to recuse herself due to the potential conflict. The controversy grew after CNET News.com noted that Jones Day's Web site stated that the firm was representing DoubleClick in conjunction with the merger.
"Jones Day is advising DoubleClick Inc., the digital marketing technology provider, on the international and U.S. antitrust and competition law aspects of its planned $3.1 billion acquisition by Google Inc." However, following the News.com posting, the page was taken down from Jones Day's site. A Jones Day partner told News.com that its language was confusing and said the page was taken down so it could be rewritten. As of Friday afternoon it was still down.
Also on Friday, Commissioner William Kovacic said he would not recuse himself in the matter, while noting that his wife is also a non-equity partner at Jones Day.
"As of January 1, 2006, my wife, Kathryn Fenton, converted to a nonequity status at the law firm of Jones Day and became a fixed participation partner in that firm," Kovacic said. "As a fixed participation partner, her compensation will not be increased or affected by changes in the firm's income."
The three other commissioners issued a statement Friday saying they concurred with their colleagues' decision.
"We agree with the analyses in Chairman Majoras's and Commissioner Kovacic's responses, and see no legal grounds that would disqualify them from participating in the investigation of the Google-DoubleClick transaction," they said in a statement. "It is evident that these Commissioners have at all times taken affirmative steps to conduct themselves in complete conformity with the ethical standards that apply to their positions."
The Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy filed a Freedom of Information Act Request on Friday seeking all FTC documents concerning Jones Day and the Google-DoubleClick matter, as well as documents related to Jones Day and consumer privacy complaints or enforcement.
DoubleClick says the firm of Simpson, Thacher & Bartlett LLP is representing them before the FTC, and in Europe, Jones Day and the Hengeler law firm are advising them in the matter.
Marc Rotenberg, executive director of EPIC, was not satisfied with Chairman Majoras' statement. "She absolutely failed to make a convincing case for why recusal is not justified," he said.
Several legal ethics experts disagreed.
"The mere fact we have a lawyer who is the chair of the FTC and her husband is an attorney with Jones Day, if that were the salient fact, that would not be sufficient to require her to recuse herself in this matter," said Mark Tuft, a lawyer in the firm of Cooper, White & Cooper LLP who specializes in professional responsibility of lawyers.
However, recusal might be merited if she had been exposed to confidential information about DoubleClick while working at Jones Day, he said.
A mere appearance of impropriety isn't enough, particularly with the increasing number of married couples practicing law, said Diane Karpman, a legal ethics expert at Karpman & Associates.
"She's maintaining that she's not drinking directly from the same trough, but you and I as members of the public feel that it's a little too cozy," Karpman said. "More and more women are becoming lawyers in positions of power and we wouldn't want to unfairly restrict them."
Another legal ethics expert suggested that because of the importance of their roles, government officials should be held to higher standards, even if the law allows the action.
"The law is the floor, not the ceiling, so just because something is allowed by law doesn't make it necessarily the best thing to do," said Judy Nadler, senior fellow in government ethics at the Markkula Center for Applied Ethics at Santa Clara University and a former mayor of Santa Clara, Calif. "In this case, because the agency is one that the public depends on for important decisions and decisions that the public trusts will be made impartially, it is always best to air on the side of caution."
News.com's Elinor Mills contributed to this report.
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