Virtual Pet Rocks: MTV Acquires NeoPets, Expands Online

In an effort to extend its presence online -- and its cachet with kids -- Viacom's MTV Networks on Monday said it acquired Web content company Neopets for about $160 million.

The intensely interactive nature of Neopets -- virtual pets that need to be cared fed, cared for and nurtured -- has led to online page views that currently exceed five billion a month (four billion from U.S. visitors, while membership in Neopets online world of Neopia has grown to more than 25 million from 90,000 in 2000, according to Doug Dohring, who will retain his current position as the chairman of Neopets.

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.

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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."

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