• by Erik Sass  @eriksass1, June 11, 2008

CBS Radio's online business has effectively merged with AOL Radio, the companies announced yesterday, making programming from all 150 CBS stations and all 200 AOL stations available to users of either service. The new AOL player is powered by CBS Radio, which recently introduced an interactive console that allows users to skip songs and share music with their friends. CBS is also assuming full responsibility for ad sales at AOL.

The updated player will include easy navigation to popular CBS stations like WFAN-AM, 1010 WINS in New York and KROQ in Los Angeles.

Listeners will be able to toggle between stations, view song and album information, follow links to relevant Web sites, create "favorite" settings, share songs with other users, and purchase songs, albums and concert tickets.

In March, AOL Radio decided to turn over much of its business, including ad sales, to CBS Radio after struggling to break even for a years. It's counting on CBS' advertiser relationships and sales force to boost revenues. For its part, CBS Radio will gain access to a much broader audience--more than doubling its current 1 million listeners a week with the addition of AOL's 1.36 million.

However, CBS also received a setback this week. Warner Music Group has reportedly yanked its songs from the on-demand service Last.fm, purchased by CBS Radio in 2007, due to a royalty dispute. The songs can continue to play on Last.fm's streaming radio channels, but they are no longer available for listeners to play when they want. CBS says it's negotiating with Warner to bring the songs back to the on-demand service.