• by Gavin O'Malley  @mp_gavin, June 21, 2005

In hopes of extending its cachet with kids, Viacom's MTV Networks on Monday said it acquired Web content company Neopets for about $160 million.

Analysts said that Viacom, New York, which also owns Nickelodeon, had lacked a significant online presence before this deal--at least compared to its TV presence.

The intensely interactive nature of Neopets has led to page views that currently exceed five billion a month (four billion from U.S. visitors, while membership has grown to over 25 million from 90,000 in 2000, according to Doug Dohring, who will retain his current position as the chairman of Neopets.

Similar to the popular 1990s phenomenon of Tamagotchi pets, which had to be "fed" regularly by their owners, Neopets inhabit a virtual online world called Neopia, where users must earn Neopoints in order to buy food for their colorful, Pokemon-like pets.

Nielsen//NetRatings ranked Neopets as the fifth most popular site for kids in May, behind Cartoon Network, Nickelodeon, eBay Toys, and category leader Disney Online.

Launched in 1999, the site now generates annual revenue in "eight figures," said Dohring, and regularly ranks among the top 10 "stickiest" Web sites--a common measure that reflects how much time its users spend on average during the month--according to comScore MediaMetrix.

Ad dollars from the likes of General Mills, McDonald's, and Disney make up about 60 percent of Neopets' revenue, while the rest comes from merchandising. Last year, Neopets partnered with McDonald's to include plush Neopets toys in Happy Meals, and is planning a similar initiative, which will launch on July 8 and will include "unique item codes" in Happy Meals for kids to plug into their computers to win extra Neopoints.

Neopets held discussions with other potential suitors before deciding on Viacom, Dohring said. "I think the best content out there that is being created on the Web is being very closely looked at by media companies," he said. Top management of Neopets, including Dohring, will remain in their roles following the sale, the companies said. Dohring will report to Jeffrey Dunn, president of Nickelodeon Film and Enterprises.

Dunn, for one, said he has no intention of tampering with Neopets' successful formula. "We'll absolutely continue to let Neopets be who they are, while at the same time helping them grow offline."