"The time is right to create a focused strategy that brings together the knowledge and expertise of both divisions," said Quincy Smith, CEO of CBS Interactive. "CBS Radio and CBS Interactive have been moving down parallel paths."

At launch, the combined assets of the newly formed CBS Interactive Music Group reach approximately 40 million unique monthly users worldwide, according to CBS.

David Goodman has been named president of the CBS Interactive Music Group. A veteran of CBS Radio since 2002, Goodman has served as president of digital media and integrated marketing for the division since December 2007.

For marketers, the new structure offers "deeper targeted advertising opportunities driven by experts in local and national sales," according to Goodman.

Based in New York, Goodman will report to CBS Interactive president Neil Ashe, while continuing to work closely with Dan Mason, president and chief executive of CBS Radio, to implement and monetize the division's digital initiatives.

The CBS Interactive Music Group is also designed to complement CBS Interactive's four additional business units primarily focused on technology and news, business, sports and games, and entertainment and lifestyle.

In March, CBS Radio logged roughly 6.5 million unique listeners who streamed in excess of 83 million total listening hours, according to the company.

Last.fm has been working with CBS Radio since last April when it reached a deal to stream audio from CBS radio station broadcasts live, while giving listeners from the CBS Radio Internet Network access to Last.fm's library of free online music. For Last.fm, the deal represented a substantial increase in the number of broadcast partners and breadth of content it could offer -- adding CBS Radio's 140 stations to its existing partnerships with Universal, EMI, Warner Music Group and Sony BMG, as well as about 150,000 independent artists and studios.

CBS, meanwhile, was be able to increase its online advertising reach through Last.fm's promotional and distribution platforms -- as well as entice more listeners to its own proprietary Web sites with the promise of access to millions of free songs offered on demand by the Last.fm library.