"I've love to work something out with them," says Quincy Smith, president of CBS Interactive, "especially if the destination starts to work. We were honored to be considered in the initial conversations. But a big piece of that is building a big destination site--which we don't think there is use for."

CBS backed out of preliminary talks because of its firm belief that already established video sites--with strong unique user bases--would be duplicating efforts. Starting a new Internet site would require big start-up costs--something CBS is opposed to.

"You have to syndicate your content," says Smith. "You don't always have to go to CBS.com." Smith adds, jokingly: "CBS is about open, non-exclusive sponsorships--sort of like [the new CBS show] 'Swingtown.'"

CBS has grown from 13% reach of unique Internet users to 90%, hitting some 134 million unique monthly users. It has struck deals with a number of major video sites--MSN, AOL, Google, YouTube, Veoh, Joost, and cnettv.com, among others. "You can expect to see another 400 more in the fall," says Smith.

All of CBS Interactive's video deals are based on a 90-10 revenue-sharing split, according to executives, where CBS keeps 90% of the revenue, giving its Internet partners 10%. CBS sells the advertising on the Internet, especially for all its current shows. But when it comes to older, niche or library programming, that's when the individual sites' sales efforts might take over.

"There's a lot of monetizing [of CBS content] in the background," says Smith.

The CBS Audience Network was structured to give major advertisers mass Internet reach, rather than making hundreds of tiny Internet video deals. In regard to the recent TV upfront advertising market--of which CBS Audience Network was a part--Smith didn't reveal much. "It's going great. It's a proposition that a lot of the advertisers wanted."

Come this fall, virtually all CBS shows will be available on most, if not all, of its previously announced Internet video distribution partners. CBS' own innertube.com site will still be a place where CBS viewers can go. Says Smith: "You want to build community around the site--you don't just go there for regurgitated TV."

Smith says the future of video content may not necessarily be about putting half-hour or hour-long TV shows online. New entertainment clips, like the series of seven-minute clips of "The Sopranos," which takes each season and condenses it down to seven-minute trailers, are engaging viewers. He asks: "Why not do that for shows like 'Jericho?'"

CBS Interactive says its mobile strategy continues to be strong. It has deals with three of the major wireless companies: Sprint, AT&T, and Verizon's V Cast.

Regarding the question of whether these interactive activities will help traditional TV grow, Patrick Keane, executive vice president and chief marketing officer at CBS Interactive, says: "I've been here for five months, and I'll be working with David Poltrack [chief research officer of CBS Corp.] to see whether we can lift TV from exposure online."

What about other video competitors? Competition isn't necessarily coming from other big video players, such as the News Corp.-NBC online video venture. Says Smith: "We are not competing with 'American Idol' as much as 'LonelyGirl,' which is being downloaded everywhere."

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