Quincy Smith, president of CBS Interactive (NYSE: CBS), took the time this afternoon to explain today's restructuring and to talk abut what's ahead. Some excerpts:
Corporate firepower & acquisitions: As part of the changes, Bryon Rubin is moving from CBS corporate to CBS Interactive as EVP and CFO. From the outside, it looks like CBS corporate is putting someone in place to make sure the unit is operating at the highest level. Smith: "The quick answer simply is more CBS corporate firepower focused on interactive, yes. You can always take more of it than less--of that kind of attention. Bryon ran the M&A group so if you're getting knocked all day long for saying we need to do a major acquisition (a reference to a post Rafat wrote earlier this week) ... Ok, I get it, we do have to do more significant investment. What can I say but CBS corporation is putting its gun entirely in the interactive group and work on it?" Smith estimates he and Michael Marquez have looked at 380-plus companies: "Don't think Marquez and I aren't looking at every single one out there...Here's the trade off: do you buy the company with revenue that has 'the legacy old new media platform' ... or do you buy the new upstart that has no revenue and grow revenue into it?" Lastfm.com was the latter.
Last.fm: It's almost a year since CBS plunked down $280 million for the UK music recommendation start-up and Smith knows he needs to deliver on all that promise. Last.fm has been growing rapidly on its own and has been given start-up like breathing room but it's time to bring it more into the fold. As we've written here before, Last.fm also needs more U.S. traction. Yes, Smith said, they bought Last.fm in part because of its strong international appeal. "But it's our job, frankly, as a corporation, to make them more valid in the United States." To that end, CBS will ramp up on-air promos with "a lot more call outs" starting in May and, very soon, Last.fm will get its own CMO "charged with plugging them more into the CBS mainstream." In late May, CBS will start sending viewers of certain shows to the show's music on Last.fm. "The downside of Last.fm right now, from my perspective, has nothing to do with the service itself ... the question is how do you blow it up and make it a major media brand in the United State?" Last.fm is working with CBS Interactive's Entertainment unit. As Smith put it, "CBS has done much less of a job with Last.fm than Last.fm has done with Last.fm."
Competition from MySpace Music?: Smith raised the question and answered it: "Does that make us nervous? I mean, MySpace is huge, it's a force. What it does is it validates the business model and it's also tells the tale of a big media games, ie CBS and Fox going at it to help monetize and bring alternative paths of revenue to the music labels and less the Pandoras and Imeems of the world ... I think the market validation's there, I think it's an interesting form of revenue so we'll get there. But it really does need to be managed by people who can help it do more than just basic online services for music labels."
I wrote earlier today that CBS Interactive reorganized under pressure to deliver results; it's been suggested to me that implies force or failure. It means exactly what it says: CBS and CBS Interactive are both under continued pressurethe parent to show that it can overcome being old media and the unit to show that it can replace the old with meaningful revenue. Smith had a year to spin what was then CBS Digital into a unit with his own imprint. CBS has more aquisitions to make but, just as News Corp (NYSE: NWS) learned with Fox Interactive Media, it also has a lot of integrating to do within interactive and across the companyand the legacy sites to evolve.
By Staci D. Kramer