Viacom sees ad growth slowing in 2nd quarter

NEW YORK Wed May 28, 2008 3:38pm EDT

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NEW YORK (Reuters) - Viacom Inc VIAb.N expects a slower rate of U.S. advertising growth in the second quarter than in the first quarter, Chief Executive Philippe Dauman said on Wednesday.

The company's second-quarter domestic advertising revenue is expected to grow 3 percent to 4 percent, he said. Viacom's domestic ad revenue rose 7 percent in the first quarter.

"Right now, we're in an economically uncertain environment," Dauman said at the Bernstein Strategic Decisions conference. "We're preparing for that."

Dauman said the lower rate of growth is not due to pricing issues or signs of a broader weakness in advertising. But rather, it is due to weak spot market -- or short-term -- demand in specific categories, such as automotive advertising.

He also said he is pleased with the current discussions with advertisers following the annual upfront presentations, when cable and broadcast networks preview next season's television schedule and book ad sales.

"We feel very good momentum as we go forward," Dauman said.

(Reporting by Kenneth Li; editing by John Wallace and Gerald E. McCormick)

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