Viacom adopts NeoPets and their millions of owners.

Once again, traditional media is looking to new media for a lift.

Viacom Inc.'s $160 million acquisition of Glendale-based NeoPets.com will give its Nickelodeon Film and Enterprises unit a new stable of cartoon characters, as well as ownership of what by one measure is the second-most popular U.S. site on the Internet.

That's 25 million youngsters who spend hours each month creating their own custom cartoon pets that they steer through games, stories and imaginary worlds--and lots of ads.

"Why own NeoPets? We're committed to being everywhere our demographics are and they have them," said Jeff Dunn, president of the Nickelodeon Film and Enterprise, a division of MTV Networks, which acquired the company.

NeoPets is reminiscent of the Tamagotchi toys, a Japanese trend that briefly swept the U.S. in the 1990s. The owners of the golf ball-sized computer toys had to "nourish" them regularly by pressing buttons for petting and food, or they would die. The NeoPets don't expire if they don't get fed; they just wither.

Users can create their pets with custom colors and features from a stable of 50 basic species that live in the richly detailed world called NeoPia. NeoPets gain points when their owners involve them in any of the games or stories on the numerous regions of NeoPia. The world is so detailed there are even NeoPian newspapers, with articles updated daily.

"With MTV, we felt like we had a company that understood the NeoPets, the global community we'd built and the relationship we have with our users," said Doug Dohring, owner and chief executive of NeoPets.

Synergy

Dunn said that the site, its management and creative freedom will be left intact. But since Viacom is primarily interested in the advertising possibilities that NeoPets' reported 25 million registered users offer, there will be more use of banner ads and decreasing dependence on "immersive" advertising. NeoPets' method, which weaves brands into the stories and games, has gained notoriety in the ad world.

NeoPia includes a McDonald's restaurant, where the NeoPets can eat Big Macs; a Disney movie theater, where the NeoPets and their owners can watch real trailers for Disney films; and the "Cereal Adventures" area, where NeoPets can play games with the Trix rabbit and Lucky Charms leprechaun.

Viacom expects to extend the brand to TV shows, movies and toys, although Dunn said that won't happen immediately. NeoPets already had a contract with Viacom Consumer Products, giving it publishing rights for kids' books. It also has a line of plush toys selling in hundreds of Limited Too stores.

The company also recently signed a licensing deal with Warner Bros. for an upcoming animated movie and another with Sony Corp., which is publishing a NeoPets game for Playstation 2 in October, and one for the PSP handheld game console in November. None of those agreements will be affected by the acquisition, Dohring said.

U.S. visitors to NeoPets spent, on average, 347 minutes looking at the site during the month of May, making it the No. 2 site in the states, ahead of Electronic Arts Online and Yahoo sites, according to comScore's Media Metrix service. Viewers spent 363 minutes looking at the No. 1 site, Disney Online.

NeoPets is the brainchild of Adam Powell and Donna Williams, who started creating the different "species" of fantasy creatures and their virtual world in 1999. They have remained the creative force behind the site, coming up with new characters, games and scenarios even after the company was purchased in 2000 by Dohring, who had an automotive market research firm.

Powell and Williams will stay on with Viacom. Dohring purchased the site for what he said was an amount in the "low seven figures" in 2000. After that, he folded most of his research firm's people into NeoPets to build ad sales.