The proposed deal would give the media conglomerate further exposure to a growing online advertising market. iFilm, which hosts a collection of short video clips, TV show segments and movie trailers, has attracted rising numbers of Web surfers and commercial TV advertisers with the widespread adoption of broadband access to the Internet, according to the company.
Viacom, which will split into two publicly traded entities early next year, owns CBSNews.com, Neopets, MTV.com and Bet.com, among other Web properties. People familiar with the deal expect iFilm to remain under Viacom, which will be headed by Tom Freston and include MTV Networks and Paramount Pictures. A separate entity, called CBS Corp., will be led by Leslie Moonves and comprise CBS and UPN broadcast networks.
iFilm declined to comment, and Viacom did not immediately respond to request for comment. Word of the talks was reported by PaidContent.org earlier this week.
The proposed deal is one of many mergers in the media and Internet businesses. Companies including the New York Times Co. and Dow Jones have snapped up Web sites including About.com and CBSMarketWatch.com, respectively, to buoy their revenue with online advertising sales.
Viacom unitcommunity-game Web site Neopets in June for an undisclosed sum, in another example.
Online ad sales are expected to grow to more than $11 billion this year, up from $9 billion last year, according to research firm eMarketer. Many Internet executives and investors expect video advertising to be a big area of growth in the coming years as more people look to the Internet for entertainment.