Viacom And CBS To Merge And Combine Web Strategies

In the biggest media deal in history, Viacom Inc. and CBS Corp. on Tuesday announced plans to merge in a transaction estimated to be worth $80 billion. Viacom chairman and CEO Sumner Redstone will lead the newly combined company, which will be known as Viacom. CBS President and CEO Mel Karmazin will become president and chief operating officer of the merged giant, with all operating units reporting to him. Today's acquisition by Viacom of media giant CBS certainly has more than the Internet in mind. But the combination of the two companies creates a potentially cohesive Web strategy for a pair of industry titans that previously had seemed to be wandering aimlessly in the online space. CBS had spent the past six months in a seemingly random series of Web deals, exchanging hundreds of millions of dollars in on-air promotion for sometimes obscure, category-specific sites such as Hollywood.com, Jobs.com, health information provider Medscape and automotive parts supplier Wrenchead.com. The acquisitions complement CBS' existing stakes in the sports and finance categories online through its stakes in SportsLine USA and CBS Marketwatch. Viacom, meanwhile, has spent the summer pumping up its laggard Web strategy, launching a revamped version of its Nickelodeon Channel Web site aimed at children and fine-tuning its Web music initiative by building an online music service centered on its MTV brand. With little overlap in their Internet activities, it almost appears that CBS and Viacom have been coordinating their Web investment strategies even before announcing the merger deal today. The combined company holds Internet stakes in companies addressing virtually every meaningful content category on the Web: finance, sports, music, children's programming, health care,automotive and jobs. In so doing, the company appears to be taking an approach comparable to media rival Time Warner, which has spent much of 1999 dismantling its umbrella Pathfinder service to focus on the development of a handful of category-specific sites, such as its entertainment-oriented Entertaindom service.Source: Steven Vonder Haar, Inter@ctive Week