New York - Media conglomerate Viacom (NYSE: VIA), whose holdings include MTV Networks and Paramount Pictures, announced on Wednesday that it has signed a five-year, $500 million deal with Microsoft (NASD: MSFT), that will see Microsoft serve ads on Viacom websites, and license Viacom's content for distribution on Microsoft properties like MSN and Xbox Live.

Under the terms, Microsoft's Atlas division will become the ad server for Viacom's U.S. websites, and get exclusive rights to sell remnant display ads.

Microsoft will also buy ads on Viacom's broadcast and online networks, and collaborate on promotions and sponsorships for MTV Networks and BET Networks award shows.

Viacom, whose MTV Networks on Wednesday forged a game development partnership with movie producer Jerry Bruckheimer, will work with Microsoft to publish games across Microsoft's casual gaming platforms.

The companies said the deal includes a combination of revenue sharing provisions, guarantees and content licensing agreements.

"We are very impressed with how closely Microsoft's business plans complement our strategic objectives," said Viacom president and CEO Philippe Dauman.

"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."

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