MTV Networks is a unit of Viacom International.

NeoPets, Inc. is the owner and operator of Neopets.com.

On November 15th 1999, Adam Powell and Donna Williams took their pet project live. In 2000, they had 90,000 Neopet subscribers.

Six years after their initial launch, they have turned Neopia into one of the most successful social networking communities for kids on the Web.

Their company is also generating eight figures in revenue per year -- WITHOUT venture backing -- according to The Wall Street Journal.

A portion of that revenue comes from what the company calls "immersive advertising." As an example, throughout the site, members can enter a virtual McDonald's store and buy cheeseburgers for their pets. McDonalds places virtual ads within the site. They also have a co-marketing merchandise partnership where kids can get free "Beany Baby-like" Neopet stuffed animals.

Other advertisers include Warner Brothers, Hershey, and Procter & Gamble.

In a recent interview with The Red Herring, Rik Kinney, executive vice president of Neopets, pointed to a recent case study for Pepperidge Farm goldfish crackers in which the crackers were placed in Neopet's world. The study showed a favorable boost in sales and brand recall.

According to Mr. Kinney, the company's annual revenue range was over $10 million.

Future Neopia Social Software Empire

The announcement of MTV's acquisition was made by Herb Scannell, Vice Chairman of MTV Networks and President of Nickelodeon Networks.

Scannell said:

NeoPets, like our brands at MTV Networks, is a tremendously successful creative-driven company that is focused on serving its target audience with great content.

The combination of NeoPets and Nick.com gives us a one-two punch leadership position in the online entertainment space among kids and young adults.

The hidden value of NeoPets is the fact that over 60% of its audience is over age 13, which aligns with the audiences of many of our MTV Network brands.

Judy McGrath, Chairman and CEO, MTV Networks commented:

NeoPets is a smart, creative and innovative company that with Doug Dohring's leadership has become one of the most popular and fastest growing sites on the Web.

NeoPets users are passionate about the site and its unique offerings, and that is exactly the kind of connection with audiences that MTV Networks cultivates and values.

This property is a perfect fit for MTV Networks, and its acquisition is an important move for us as we aggressively move forward as a multi-platform entertainment company, dedicated to serving our audiences across all the platforms that they use and love.

NeoPets Chairman and CEO Doug C. Dohring, as well as the NeoPets senior management team, will continue in their roles following the completion of the acquisition, and will manage the company from its base in Glendale, CA.

Mr. Dohring will report into Jeffrey Dunn, President, Nickelodeon Film and Enterprises. Dohring said:

Since early 2000, when we founded the company, I felt that we could create a strong connection between the youth of the world and our NeoPets- created characters and storylines, which we would ultimately extend into television, movies, merchandise, publishing and other offline vehicles in a very significant way.

While we have already made great strides in this direction over the past five years, MTV Networks, with their extraordinary success and experience in all of these areas, makes an ideal partner to accelerate this process and fully realize our original vision for the Neopets brand.

Jeffrey Dunn, President, Nickelodeon Film and Enterprises added:

Doug Dohring and his team have done an amazing job of building a truly unique global entertainment brand conceived exclusively for the multimedia generation. NeoPets will be a terrific fit within our Enterprises businesses because it brings an emerging consumer products business, and the potential for feature film animation. With over 50 original and highly appealing characters, there is tremendous opportunity for creative innovation moving forward.

NeoPets generates five billion pageviews per month and is one of the "stickiest" sites around.

Neopets.com is consistently in the top ten sites for time spent per visit.

Today the site is available in ten languages, including English, Japanese, both Traditional and Simplified Chinese, Korean, Spanish, French, German, Italian and Portuguese, which makes Neopets' content available to nearly 90% of the world's Internet population. This massive translation initiative to make the site available in multiple languages began in early 2003.

In May 2005 alone, the company served over 1 billion non-English pageviews.

NeoPets' proprietary translation technology enables members of different cultures to interact simultaneously with one another on the site, thereby further expanding the Neopets.com international audience and increasing cross- border communication and understanding among young people everywhere.

Our kids must choose between watching a thirty minute show a day or working on feeding their Neopets, purchasing items from their real-live friends' Neopets shops in order to stock their own store, or earning additional Neopoints by playing games. Jessie is even considering starting a Neopets Shop Blog as a way of marketing her wares to other members of Neopia.

Summertime NeoLodging

Last summer, before leaving on a three-week vacation, Jessie and Niki had the difficult choice of having their pets stay in a one-to-two-star "Economy" hotel, a three-to-four-star "Luxury" hotel or a five-star "Deluxe" hotel.

Jessie chose a four-star hotel because she wanted her pets to be well-taken care of while she was gone.

This summer, the girls will once again have to decide whether to put their Neopets in a luxury hotel or more of a youth-hostel-like setting.

Neopets Deluxe Hotel

Jessie is considering upgrading her pets to five-star lodging because she says she feels like she can afford it. If she has them stay in "The Presidential Palace" it will cost her 200 NPs per night per pet. For 5 NPs each she can add extra luxuries such a spa treatments, maid service, tennis, grooming and en-suite bathroom. "It's costly," she says, "but I think it's worth it."

Niki does not have enough Neopoints to indulge her pet in such extravagant accommodations. She refuses to have them stay in the Cock Roach Towers for 5 NPs a night or the Fleapit Motel for 10 NPs a night. She will have to choose between the "Mountain Lodge", "Hotel Opera" or the "Ye "Olde Ship Inn" -- all Luxury accommodations that will run her between 30 and 50 Neopoints per night. "Fortunately," she says, "I have only one Neopet to look after where Jessie has two."

Frankly, this is a Catch 22, i.e., simply proof that Jessie has spent considerably more time on Neopets.com than Niki. Not that we want to encourage more than thirty minutes a day.

The Neopet Adventure Begins

NeoPets.com started in 2000.

The site has grown via virtual marketing (i.e., word-of-mouth) and virtually no media marketing.

Neopia publishes its own weekly newspaper called the Neopian Times featuring ongoing stories about the virtual animals and why they are so cute. The virtual paper often includes comic strips.

Each member has the opportunity to set up a bank account as a way of saving his or her Neopoints. These accounts are even interest-bearing. For instance, Jessie has saved up 30,000 "Neopoints" -- whereas Niki has only saved 1,000 NPs.

Kids are given incentives to save Neopoints. Those that save the most can go from being a "Junior Saver" to a "Mega Billionaire."

Jessie, who has a shop called "The Cutie Shop," offers twenty items for sale to other Neopet owners.

She has gotten her friends at school and church to become members of Neopia. These friends and other members online purchase products from her shop. Currently in her shop are grooming supplies, plushies (stuffed animals), school supplies and even a cool Jazzmosis hat. This is just one way she can earn Neopoints.

Recently, Jessie purchased Sky Blue eye shadow to sell in her store. She used the Shop Wizard to make her purchase. She says she was only willing to pay another merchant 100 Neopoints for the eye shadow.

Niki, who also owns a store, offers food, make-up, school supplies and books to her shoppers. Her store is called "The Poodle Shop."

Recently, Jessie bought a virtual Blue Ixi Plushie from Niki's store. She paid 75 Neopoints for it and will now sell it in her store rather than give it to green_cutie1_616 or blue_cutie1_616.