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CBS beats portal envy, turns on interactive TV

CEO Leslie Moonves says current Internet woes are a vindication of his online strategy, which sidestepped portals in favor of on-air promos.

NEW YORK--CBS chief executive Leslie Moonves on Friday said current Internet woes are a vindication of his online strategy, which steered the company clear of costly entanglements that ran up huge losses at rivals such as Walt Disney and NBC.

"You don't have to own a portal to get people to the destinations they want to visit," Moonves said. "And with all the power of network television, we can drive them to wherever we want them to go, and we can drive them in record numbers, too."

The CEO of Viacom's CBS division didn't pat himself on the back Friday during his keynote at the Jupiter Media Forum. But Moonves applauded the company for keeping its cool during the height of portal mania by investing carefully in the online industry and closely tying its Internet assets with its core TV business.

Moonves also named interactive TV as one area the company is pursuing aggressively. He said CBS will have nearly 100 hours of interactive programming by the end of this summer. And in March, CBS will create interactive features for the NCAA basketball tournament. This interactive programming is available on Microsoft's WebTV as part of a deal inked last summer.

Moonves said CBS' Internet and interactive TV divisions could become profitable this year but did not elaborate on how that would happen.

He also said CBS will not rely on portals to drive traffic but will continue to link its TV programming closely with its Internet division. Two weeks ago, CBS announced a restructuring that would bring the daily operations of CBS.com and CBSNews.com under control of its TV division. Previously the sites were managed by Viacom Interactive Ventures, which oversees the company's online relationships.

As an example of these tie-ins between the Web and television, Moonves cited several figures that demonstrate how effectively TV events can drive Internet traffic.

On Super Bowl Sunday, the accompanying Super Bowl site hit 11.5 million page views. In addition, the Web site for CBS' hit reality series "Survivor II" has already logged 60 million pages viewed and 350,000 chat room log-ins since the show began in January. That has helped CBS.com increase its traffic by 500 percent, Moonves said.

CBS stood aside as its two biggest competitors in broadcast TV made enormous investments in Web portals to aggressively boost their Internet strategies. The company instead traded on-air promotion for equity in a spate of Web content companies including MarketWatch.com, SportsLine.com and iWon.

"It was like being out in the Hamptons without a Beemer (BMW)," he said. "It got so that I had a very bad case of portal envy."

But Moonves pointed to the lumps that other broadcast networks have taken with their Internet plays as a sound argument for why the cautious route is sometimes the wise route.

CBS has watched General Electric's NBC and Disney, ABC's parent company, lick their wounds from supporting cash-bleeding Web portals NBCi Internet and Go.com, respectively. Disney said it would take a $800 million charge for its decision to fold Go.com. NBCi remains in limbo as the company continues to lower revenue estimates and lay off employees.

Moonves' motto: Stick to what you know.

"As new and untested as this brave new digital world might seem, the core of that business remains the same for us. It's broadcasting," he said.