Pillar Changes Channels to CBS

In a move to play catch-up among the big three networks, CBS has lured veteran Internet executive Russ Pillar to become the CEO and president of CBS Internet Group, the company's recently formed new-media division.

Pillar, 34, is the former Prodigy CEO who helped maneuver the online service's turnaround and its successful transition onto the Internet. He left Virgin Entertainment, where he oversaw Richard Branson's global interests.

"The Internet will play an integral role in the future success of CBS," said Mel Karmazin, CBS's chief executive. "That's why we have searched for a world-class CEO to manage our in-house online effort and our growing collection of Internet assets."

The Tiffany Network's most recent investment in December is in star-studded sporting goods retailer MVP.com, formed by John Elway, Michael Jordan and Wayne Gretzky. CBS will trade $85 million in promotional dollars for an undisclosed equity stake.

Pillar may have been tapped to run the company for his experience at Virgin, which will come into play when the $36 billion merger between CBS and Viacom is complete. He could soon oversee Viacom's Internet division, which includes MTV Online.

"It's premature to talk about that transaction," says Pillar, declining to speculate further pending shareholder and regulatory approval of the merger.

"We're focused on the Internet assets, and (we) will focus on the larger companies when that comes to pass."

To date, CBS has remained somewhat elusive on its strategy while shrewdly investing in a number of Internet companies, including publicly traded CBS MarketWatch.com and CBS SportsLine.com, in addition to more than a dozen other companies. MVP.com will operate Sportsline's online sales division. Recently, CBS swapped $70 million in promotional air time and an initial $30 million outlay for a majority stake in iWon.com, a site that gives out cash to visitors.

Albeit ambitious, CBS was widely criticized for investing in iWon, which pointed to a megaportal strategy its competitors have been grappling with. As iWon visitors rack up points for the amount of banner ads and content elements they clicked on, industry observers claim that, while traffic may surge, the quality of traffic - an important measure of consumer loyalty - will surely suffer.

Pillar says the strategy at the moment remains "fungible," but plans to clarify both his role and the company's direction in the coming weeks, after he moves into the network's New York headquarters.

"The beauty of the Internet is personalization," Pillar says. "We want to continue to flex the CBS brand to drive personalization to consumers who will count on us for market-leading information and entertainment content."

In previous announcements, CBS was committed to spinning off the Internet division later this year.

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