CBS Takes First Majority Stake In Web Portal

Media giant CBS Corp. has agreed to provide iWon.com with $70 million (US$) in advertising time and $30 million in cash in exchange for a majority stake in the closely-held Web portal.

The Irvington, New York-based iWon.com offers links to other popular Web sites, a search service, news, entertainment and chat rooms. In an effort to drive visitors to the site, the portal has also entered into strategic partnerships with other Internet heavy hitters, including CBS’s MarketWatch.com, SportsLine.com and Travelocity.com.

“iWon is a unique product unlike any on the Web,” said CBS CEO Mel Karmazin. “We believe it has the opportunity to build a powerful and successful destination portal for all types of Web users that is both useful and fun.”

Pay People To Come

In an effort to put iWon on the cybermap, CBS officials unveiled a sweepstakes Tuesday that will give away a total of $25 million in cash prizes over the first year. Visitors will have a chance to win $10,000 a day, $1 million a month and $10 million on tax day in April of 2000.

After registering with iWon.com, users can accumulate up to 100 points each day by clicking on Web links that are each assigned different point values.

Winners will be randomly selected, but their chances improve as their point totals grow.

iWon.com is CBS’s first majority stake in a Web site, marking an aggressive but late foray into cyberspace. Despite the fact that it holds minority stakes in 11 Web sites, it previously had no portal to help drive users to its various Internet properties.

Competition Driven

Industry observers feel that CBS is being prodded into a stronger Internet presence by the activities of rival networks. NBC has Web portal Snap.com, while ABC created Go.com to organize links to its other Web holdings.

Some analysts believe that giving away millions in sweepstakes – however extreme — is a clever way for CBS to cash in on consumer passion for Internet freebies. Nonetheless, this factor alone is not expected to guarantee the new site’s success. Some experts note that richness of content will be the long-term factor in determining the portal’s “stickiness.”

NFL CEO Joins iWon.com

CBS also announced yesterday that NFL CEO Neil Austrian will serve as iWon.com’s new chairman, although he will retain his position as NFL president and CEO. Austrian is known to be an able negotiator, as he helped iron out the NFL’s eight-year, $18 billion television contract with ABC, ESPN, Fox and CBS.

The NFL said Austrian’s arrangement would not pose a conflict of interest.