Viacom Starts Internet Drive with Nets

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Making a strong move into cyberspace, Viacom Inc. is
forming an Internet division that will include online sites that its MTV Networks unit is
creating for kids and music, officials said last week.

The new Internet offerings will get $250 million worth of
worldwide promotional support on cable networks MTV: Music Television, VH1 and
Nickelodeon, Viacom chairman Sumner Redstone and other officials explained at a press
conference in Los Angeles.

Viacom is dubbing Nickelodeon's kids' effort "Project
Nozzle," and MTV's and VH1's online initiative "The Buggles Project."

MTVN chairman Tom Freston noted that in the past, MTVN has
purposely not promoted its Internet sites on its cable networks. But now, the game plan is
try to harness MTVN's marketing power via the Web, and to apply its targeted-programming
strategy to the Internet.

In Project Nozzle, Nick will create the Web's first
kids-only online site -- a free offering that will include a registered community for
kids. In The Buggles Project, MTV and VH1 will create an online music destination
featuring customizable entertainment, information, community services and electronic
commerce.

Project Nozzle -- which, by itself, will get $100 million
worth of on-air promotion on Nick -- is set to launch Sept. 1. Testing will start June 1,
and it will be incorporated as part of Nick's existing site, Nick.com.

The music destination is set to debut in June, and it will
be separate from MTV's and VH1's current Web sites, although it will link to them.

Redstone said Viacom might hold a public offering of the
new Internet unit, which will be based in New York with a satellite office in San Mateo,
Calif.

Under its umbrella will be not only the new sites, but also
some acquisitions that the media giant is making as part of its cyberspace expansion.

Those include Imagine Radio, a leader in Internet radio;
Nvolve Inc., a San Mateo-based Web developer; and Red Rocket, an online educational-toy
retailer that was formerly part of Viacom's Simon & Schuster Inc. unit.

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