CBS reins in its Web sites

Viacom's CBS Television Network has become the latest media company to pull control of its Internet businesses from a separate online division and fold them back into its primary operations.

The restructuring, confirmed by the company Friday, calls for CBS to take over responsibility for Web sites formerly run by Viacom Internet Ventures, a division that manages Viacom's online investments and other Internet properties.

A CBS representative said the company will not lay off any of its online employees as part of the restructuring.

"In the new organization structure, CBS Entertainment and CBS News will assume a more focused, active role in the daily development and management of the online sites associated with their programming," Leslie Moonves, chief executive of the CBS Television Network, wrote in a memo to employees that was forwarded to News.com by a company representative. "This will ensure that our company's online efforts compellingly complement our broadcasts with this growing, exciting medium."

Under the new CBS management structure, CBS.com Web sites will report to Nancy Tellem, president of CBS Entertainment. David Katz, vice president of interactive ventures, will conduct day-to-day management of online activities.

CBSNews.com will be managed under Andrew Heyward, president of CBS News. John Frazee, vice president of news services, and Betsy Morgan, vice president of business development, will oversee the day-to-day operations of the site.

Russ Pillar will continue to head Viacom Internet Ventures, which owns stakes in financial Web site CBSMarketWatch.com, Sportsline.com and sweepstakes site iWon.com, among others.

CBS' maneuvers mirror similar moves by its counterparts in the media world to run its online divisions as a close extension of television. On Thursday, financial news cable station CNBC cut 26 percent of its online work force and folded its online division into a single management structure. Other media companies that have made similar moves include News Corp., which closed its Digital Media Division; NBC Internet, which recently cut 30 percent of its staff; and CNN, which cut 400 jobs as part of overall cost-cutting at AOL Time Warner.

CBS's decision underscores how media companies are increasingly viewing the Internet as an extension of their programming rather than a separate operating entity. Now more than ever, TV networks are trying to channel their TV audiences into their Web sites to create more interactivity and hype about their shows.

CBS has been successful at this given its ratings gem "Survivor." The show's Web site has blown away traffic expectations. During the first week that "Survivor 2" aired, the accompanying Web site soared to 2.14 million unique visitors that week.

Media companies have always viewed the Internet as a way to drive popularity to their core TV and filmed entertainment assets. However, many companies have tried to stick their necks out farther by trying to use their traditional media properties to lure audiences from established Internet giants such as Yahoo and AOL Time Warner's America Online.

Sky-high Internet stock valuations whet enough appetites for many media giants to attempt tapping the same wealth. Players such as NBC and Walt Disney acquired search engines, tied in their existing Web divisions, and then spun the package out into the public market.

These ventures, however, have been battered by souring interest in Internet companies and a weak advertising market. Disney in January announced it would scrap its Go.com portal and pull it out of the public market. NBCi is trading under $3 a share and has endured layoffs and reduced revenue estimates.

Meanwhile, CBS's parent company, Viacom, took its own stab at juicing Internet valuation with MTVi. Viacom turned MTVi into a separate operating division that encompassed Sonicnet.com, MTV.com and VH1.com. But in September, Viacom decided to shelve an initial public offering for MTVi and cut the division's staff by 25 percent.