AOL, CBS in online news deal

America Online, the world's largest online service, today said CBS will be the exclusive provider of broadcast news on both AOL's proprietary online service and CompuServe, and will be a featured news provider on the AOL.com portal site.

Beginning next week, CBS programming will supplant ABC News, which has been providing content to AOL since about 1995. Although AOL would not discuss contract negotiations, the company said that ABC's contract had expired and that it decided to go with CBS rather than renew with ABC. AOL already had a relationship with CBS promoting the network's fall lineup.

"We saw this as a logical extension of that partnership, especially given CBS News's great programming at a variety of times and with different shows," said an AOL spokeswoman.

The deal marks a significant Internet move for CBS, which until now has been less aggressive than its TV network competitors in seeking high-profile deals online.

NBC, for example, has taken equity stakes in women's site iVillage and News.com publisher CNET: The Computer Network. NBC's deal with CNET includes a joint venture in portal Snap.

The currency in the CBS-AOL alliance is "on-air promotion" for AOL, in exchange for the showcasing of CBS news talents on AOL. The companies have agreed to share advertising revenue generated from AOL brands that incorporate CBS News programming.

Under the terms of the agreement with CBS New Media, CBS News will be guaranteed a major presence throughout AOL, CompuServe, and AOL.com. America Online also has committed to featuring CBS News correspondents, producers, and editors throughout its brand.

It is significant that CBS is looking to broaden its exposure online via AOL; the online giant is a major "network" player on the Internet much in the same way CBS, NBC, Fox, and ABC are on television. As TV and digital technologies converge, the networks within the different media could find themselves competing more directly. And in that case, the alliances being struck now may strongly influence the backbone of information and entertainment creation and delivery.

As part of the alliance announced today, CBS will promote AOL during each of its news broadcasts, including the CBS Evening News with Dan Rather, 60 Minutes, Face the Nation, 48 Hours, and CBS Morning News.

Other programs in which AOL will receive promotion include CBS This Morning, CBS News Saturday Morning, CBS News Sunday Morning, CBS Saturday Evening News, CBS Sunday Evening News, 60 Minutes II, and Up to the Minute.

In addition, CBS News will commit personnel resources to the development, production, and promotion of AOL Live chat events.

Although other networks have promised on-air promotion as part of online deals, the sheer number of shows on which CBS is saying it will promote AOL represents a sea change for such deals.

"Over the next 12 months, AOL members will view millions of pages with the CBS News logo framing our editorial content. That's a tremendous number of impressions, in a medium that augments our more traditional television and radio audience," CBS chief executive Mel Karmazin said in a statement. "In forming this partnership with AOL, we are also developing an important new audience and new revenue streams for CBS News."

The alliance with AOL will allow CBS to immediately reach an audience of news consumers larger than the circulation of the nation's top three daily newspapers combined, and twice the size of the next-largest news sites on the Web, according to Web ratings firm Media Metrix. AOL announced last week that its membership had reached 15 million.

NBC is an investor in CNET: The Computer Network, publisher of News.com.