CBS and Big Entertainment today announced that they have signed an agreement in principle for CBS to receive a 35 percent stake in Hollywood.com, an online movie service devoted to movie information and news. In exchange, Hollywood.com will receive $100 million of CBS promotion and content across the full range of CBS properties.
Big Entertainment will own 65 percent of the joint venture. CBS will also have the option to increase its ownership by 5 percent for additional promotion or cash.
In a separate deal, CBS will receive 50 percent equity of StoreRunner.com, an interactive online shopping comparison service, in exchange for about $100 million of promotion and branding support on all CBS media over a six-year time period. The transaction is subject to completion of a definitive agreement.
CBS's Internet properties already include stakes in financial news site MarketWatch.com and CBS SportsLine. Just last month, CBS chief executive Mel Karmazin said the company will use its high-profile name to help expand on the Internet. The broadcaster has also been repeatedly rumored to be a takeover target of online giant America Online with which it already has a cross-promotional relationship.
"We're still at the beginning of our Internet strategy," Karmazin said in a statement today. "Our goal is to be as strong a player in new media as we are in the established media of television, radio, and outdoor."
"The world of e-commerce is growing exponentially,'' said Karmazin, adding that giving consumers the ability to comparison-shop quickly and effectively on the Net is vital. "StoreRunner.com does just exactly that by putting big brands under one tent where customers can purchase them online."
The company's "runners" visit thousands of Web sites, judging products for inclusion in one of StoreRunner's 180 categories and more than 400 retail brands. A proprietary "jump'' feature allows consumers to move seamlessly across merchant sites.
CBS also hopes to use StoreRunner.com to tap both national and local marketing.
"This mirrors our own mix of national and local audiences and advertisers and represents yet another area in which our partnership can add value," said Karmazin.
Hollywood.com is a Web site for movies and the motion picture industry, offering visitors current movie, video, DVD, and soundtrack information, as well as local movie theater show times. The site also features daily Hollywood news, celebrity interviews, listings of movies on TV, along with other information.
"Success on the Web--as in other media--is all about the development of strong, branded franchises. Hollywood.com is already on its way to becoming just such a franchise which is why we're excited to join them with our strong branding, promotion, marketing, and content," said Karmazin. "We believe our partnership can help Hollywood.com become the hottest entertainment site on the Internet."