Continuing its efforts to build youth-oriented internet businesses, MTV Networks parent Viacom has acquired Xfire, a privately held Silicon Valley firm that makes an ad-supported instant message system used by videogame players, reports the New York Times. Viacom will pay $102 million in cash for Xfire. The IM product allows users to see which games their friends are playing and lets them join in the games online.

Xfire also has some commonalities with social networking sites such as Facebook and MySpace, and it sells advertising on its software and website - to videogame makers as well as mass market marketers, including Dodge, Pepsi and Unilever.

"We want to be where our audience is," Viacom's chief executive, Tom Freston, is quoted as saying. "And we know that video games are a dominant form of media for young males."

Xfire will reside within the MTV Network family of internet holdings, which includes Neopets, GoCityKids.com, iFilm, GameTrailers.com, MTV's Overdrive and Comedy Central's MotherLoad, writes ClickZ.