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On Neopets’ candy-colored, youth-oriented web site, kids create virtual pets and send them cruising the streets of the online land Neopia. They play games, shop, or make artwork for the site’s online galleries, which all sounds like harmless, creative fun.

But the company’s business model is more than just pure play. Big-name brands like McDonalds General Mills, and Disney have staked claims throughout the site in what the company has termed and trademarked “Immersive Advertising.” The idea is to blur the ads with content, rendering the pitch easier to swallow.

Insidious, brilliant, or both, the site’s 25 million-plus visitors have turned Neopets into one of the stickiest sites on the web, according to comScore Media Metrix. Avid fans send in more than 11,000 pet stories and 30,000 pictures per month, and the site has been translated into 10 languages, including Chinese, Dutch, French, German, Italian, Japanese, Korean and Spanish. More importantly, the company’s ability to generate more than $10 million in ad revenue last year recently prompted a $160-million buyout by Viacom’s MTV Networks.

Read (short) interview with Neopets CEO Doug Doughring