When we went to TV.com and selected the March Madness link, it went to the CBS-hosted link mentioned above. It appears, at least in this case, that YouTube has perhaps a slightly tighter integration over CBS' own streaming video site offering. But there are a couple of perks that are also available no matter which path you choose. Going the YouTube route gives you quick access to CBSNCAATourney video clips. Choosing the CBS site offers a live Facebook status update stream similar to what CNN did during the presidential debates. So, either way, everybody wins.

We think it's CBS Radio and not Clear Channel which has made the biggest strides. CBS' partnerships with AOL and Yahoo!, along with its ownership of trendy online radio app last.fm, have effectively made CBS Radio the most powerful force in Internet radio in 2008.

Kevin Conroy, executive vice president of AOL, recently wrote in a guest blog post at Radio Business Report about the evolution of AOL Radio. Conroy wrote that the partnership with CBS Radio allowed AOL to tap into the "core competency in traditional radio" that CBS had. At the same time CBS got access to "AOL's substantial online listener base, and allowed it to connect with the AOL Network, which reaches more than 110 million unique visitors a month", wrote Conroy. He also noted that AOL got "an improved player, built by CBS Radio" that works on both PCs and Macs.

At the end of August we published data from comScore about the Internet Radio industry. It showed that the big Internet companies still dominate, specifically AOL Radio and Yahoo Music. At that point AOL Radio had been showing excellent annual growth, with a 56% increase over the past year. However Yahoo Music had decreased 19% annually since July 07. According to Reuters, in October comScore data had AOL at 3.99 million unique visitors, while CBS Web properties had 3.95 million unique visitors and Yahoo! Launchcast had 2.87 million. When you look at who powers both AOL and Yahoo now, it's clear that CBS has significantly increased its market presence since mid-08.

At ReadWriteWeb we've tended to focus on the innovative Web native apps that have risen independently of the big radio stations. According to comScore Pandora rose 89% from July 07 - July 08, while last.fm had 62% annual growth. But both the traditional radio broadcasting and Internet bigcos have been steadily increasing their influence - none moreso than CBS, which in addition to the AOL/Yahoo! partnerships this year also acquired last.fm in May 2007.

And then there's mobile. As Reuters pointed out, the iPhone has had a big influence on radio for mobile devices this year (see our post Top 5 Streaming Music Apps for the iPhone for examples). Other mobile devices, such as Blackberry and the Internet phones from Nokia, are also ramping up.

What other trends have you noticed in 2008 from Internet radio? What do you expect to see happen in 2009?

That's 10% more than Google paid for YouTube, and that deal was all for stocks. CBS paid a 45% premium over CNet's closing stock price and it paid it mostly in cash. CBS buying CNet is a big, complicated deal with a lot of possible take aways, but below are ours.

Founded in 1993, CNet is the granddaddy of all the blog networks on the web. It's had a good long time to marinate, has major internal problems like suit-happy shareholders and arguably fluctuating traffic, but CNet is as stable an online collection of brands as anyone out there.

What gets validated here is this: great online ad sales, high production value, serious talent, company maturity and breadth in both content and distribution. While all of those have always been important business traits, upstart content networks on the web have tended to focus far more on marquee personalities. Perhaps that's only a short term strategy until some of us can hope to build out networks with more fundamental business strengths.

CNet's content producers may not be flashy web 2.0 names but they've got rock stars of their own over there. Larry Dignan is an enterprise dark horse that our readers may or may not know about but who regularly rocks Techmeme more than anyone but TechCrunch. Declan McCullagh may be the best political tech blogger there is. Caroline McCarthy combines scoops, research and professionalism in a way that anyone would do well to learn from. WebWare may not get talked about in some Web 2.0 circles, but it's one of the very biggest blogs in that market and is written by people like Rafe Needleman and Josh Lowensohn - both of whom would be great on TV. I'd embed a CNet video here to demonstrate its production value, but few of the company's video properties allow embedding. So much for web 2.0, eh?

The above are just the Web 2.0 type names at CNet, we're less familiar with the company's powerhouse properties in gaming, consumer electronics and autos.

The importance of a strong ad sales team can't be understated. While most blog networks in this nascent medium end up selling ads with one side of the brain and writing content with the other, maybe teaming up with an ad network that pays the bills but doesn't power growth, CNet is lauded for their in-house ad sales team. If hiring top talent, doing in-depth research and offering high production value are important, then there are few aspects of content online more key than strong ad sales. Strong ad salespeople are hard to come by.

Finally, CNet's distribution of content (including some RWW articles) in China and Japan is more serious than any upstart blog network has been able to accomplish. What markets could be more important, other than India?

CNet is a mature, accomplished and broad network. While it may be more fun for some of us to read other, smaller, edgier blogs (RWW included, we hope), CNet properties are far closer to being household names than any one else in our market. Now they're part of CBS.

What Will CNet Look Like at CBS?

It appears that CNet will maintain a high degree of independence at CBS, but we can assume that some of its energy and brains will focus on bringing CBS into the next era online. Along with recent, much smaller, purchases of the recommendation technology behind Last.fm and the brains of Wall Strip, CNet should help CBS put more than just its toe into the waters of the web.

Will CBS TV content become available online more quickly? Will CBS TV content get better with an infusion of creative talent from the web? Will CBS create a show called "Everybody Loves Redmond," as one joker in our community of readers offered? Will all talent get diffused and leave innovation lovers wondering what happened to CNet in just a few short years?

It's hard to say for sure, but if nothing else - CNet offers one vision of what it takes for an online content network to cash out big time.

Last month we reported that web-to-TV drama "Quarterlife" had a less than stellar network TV debut. After the first episode drew disappointing Nielsen numbers, NBC canceled the show and moved the remaining episodes to cable channel Bravo.

So why doesn't a lage online following mean success offline? I can think of two reason. First, many media consumers on the Internet are just that, media consumers on the Internet. Yeah, they want more episodes of their favorite shows, but they want to keep consuming that content their way: via the web on sites like YouTube or BitTorrent. Which until online video monetization is figured out, may not really be feasible (a single episode of a scripted drama like "Jericho" can cost in the millions of dollars to produce).

Second, and perhaps more significantly, social networking tools have provided a means for people to organize more quickly and effectively around a shared passion than we've seen in the past. We noted last month that Facebook has been used to organize large political rallies and successful online fund drives, and we saw the same phenomenon in this year's US presidential elections. Specifically, Ron Paul supporters were able to use the web to effectively organize around their candidate and dominate coverage on online social media sites like Digg and YouTube, as well as raise a ton of money. But just like with the TV shows, that online movement didn't translate to offline support.

Simply, online tools have provided a way for a small group of impassioned people to make a lot of noise.

What do you think? Are there any other reasons why strong online numbers haven't translated well to the TV? Do you think Internet fandom will ever be ready for primetime? Share your thoughts in the comments.

But there are plenty of potential hangups. Take the deal that CBS announced this morning with mobile social network Loopt. CBS plans to use Loopt's GPS technology to deliver location based ads to CBS mobile users. These aren't exactly like the scenario I announced above, since CBS will be displaying location-aware ads on top of mobile content rather than deliver them via text message. That actually highlights the first problem with location based advertising.

It would take a perfect confluence of events in order for many ads to make sense. Not only do you have to be near the thing that is being advertised, but you also need to be viewing the CBS mobile site. For entities like Starbucks that exist on every street corner, that might not be an issue, but in practice how often do you think you'll be in the proximity of one of CBS' advertisers while you're viewing the site? It'll happen, sure, but it drastically cuts down on the number of opportunities to deliver location aware mobile ads when you have to be viewing a specific mobile web page at just the right time to receive an ad.

CBS can, of course, deliver more general ads fixed to your location -- but is that really taking advantage of the GPS capabilities that Loopt offers? Yeah, it's neat to see ads for things in the city I am traveling in, but not as neat as seeing ads for the businesses on the street I'm walking down.

The fix for that, of course, is to deliver the ads by text message, triggered by proximity to the advertiser's storefront. We questioned in December whether mobile ad startup Fluc would be able to fill inventory for a similar type of ad scheme (though is isn't clear if Fluc is actually targeting ads by GPS or if they're just asking users where they are located). "If the GAP knows you're near a mall where they have an anchor store, and they know from your Fluc account that you fit their consumer profile, then they might pay to send you an ad," we wrote. "That's a lot of 'ifs,' though."

Further, ads like this have to be opt-in. Not only is there a privacy issue involved, but text message ads are also the least likely to be trusted by consumers, according to a Nielsen Internet survey. The CBS-Loopt ads are opt-in.

Another hangup with the idea of location-based ads is reach. Right now the CBS ads are only available to customers using a GPS-enabled phone on a network that Loopt has a partnership with -- so far that means just people on Sprint Nextel or Boost Mobile. Loopt's CEO predicts that by the end of 2008 there could be 50 million mobile phones in the United States equipped to receive this type of advertising, but for now the audience remains relatively small.

Even so, location based advertising is a tantalizing vision for the industry. Google CEO Eric Schmidt said last week that location based ads are the future and will lead a revolution in mobile advertising. Last year Google launched a mobile version of AdSense and their own mobile OS. I think we can expect location aware ads from them in the near future. And whatever Google does in the world of advertising, you can bet others will follow suit.

The ad scenario I described above is possible (and it can get even spookier and more finely targeted when mashed up with other data -- say, your social networking profiles), but it's probably not quite here yet. At least, I haven't seen it. The question is -- do we even want that? Should we potentially trade more of our privacy for more relevant advertising? What does a dollar off a latte mean to you?

In the following post syndicated from last100, our network blog about digital lifestyles, Daniel Langendorf analyzes how last.fm is much more than a streaming service - it is aiming to create "communities around content".

Interesting. What does this mean?

But first, here’s the deal: CBS and Last.fm, the London-based online music streaming site CBS bought for $280 million last May, have built a site where music fans can stream any song they want for free. Well, almost for free. The site is supported by advertising.

What makes the CBS/Last.fm site so compelling — it’s being dubbed as the “world’s largest jukebox” — is that all four major record labels and 150,000 independents are participating, contributing songs and entire albums. This adds up to 3.5 million tracks from Universal Music Group, Sony BMG, Warner, and EMI, all of whom will be paid (through separate agreements) from ad revenue.

The site is also open to unsigned bands, who will share the ad revenue associated with their songs.

The process is almost too good to be true: Music fans simply go to Last.fm, which has an active community of 15 million active users in more than 200 countries. It’s best known for the song recommendation engine that tracks the music-listening habits and links them to other fans with similar tastes. Search for an artist, listen to a song, and see a small “billboard” ad on the screen while the tune plays. People don’t even need to register with the site, if they don’t want to.

Fans can listen to any song three times before they are directed to one of Last.fm’s partners, including iTunes, Amazon, and 7Digital, where they can purchase the track. And just so we’re clear here, tracks on Last.fm are not downloadable, so people cannot put streamed music on a digital music player.

The CBS/Last.fm approach is not completely new. RealNetworks launched a service nearly three years ago that lets users stream 25 songs per month for free. Napster, launched in 2006, lets fans stream five songs for free before they are asked to ante up the credit card. Spiral Frog, the Peter Gabriel-supported We7, imeem, and others, offer similar services.

Streaming business models, however, have had limited success.

So back to community. What’s the big deal with the CBS/Last.fm almost-free, ad-supported streaming service besides the big media-name backing and the involvement of the major record labels and a slew of indies?

As Moonves said, “Community is clearly the future.”

In existing CBS “content communities” are TV shows from CBS, The CW, and Showtime, movies from Paramount, other TV stations, CBS Radio, CBS Interactive, even the Simon & Schuster book-publishing business. And let’s not forget: CBS is the network broadcasting next month’s Grammy Awards, the music industry’s equivalent to the Oscar’s.

So we can imagine every song, every artist played or featured on a CBS property most likely will be referenced, cross-referenced, and made available through Last.fm, giving CBS another way to reach like-minded consumers who want to share their interests with others.

The more people go to Last.fm to hear what song was just played on “CSI:NY”, the more money CBS and Last.fm make off advertising and residual sales. Imagine at the end of the show a text crawl noting that the music tonight can be heard at Last.fm. On the Last.fm side of the equation, there can be season-long playlists from CBS properties, conveniently cross-referenced, tagged, and shared.

“This is promising, not only for the consumers but for the majors themselves,” IDC consumer audio analyst Susan Kevorkian told Wired. “Digital technology holds a great deal of promise . . . artist and labels can sustain relationships with consumers well past the point that they have historically sustained them.”

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"We're excited about these partnerships -- they allow our users to find and listen to a much broader range of music," said Songza founder Aza Raskin. "Being able to listen to entire songs -- not just 30-second clips -- is a great thing for music fans. It will lead to more informed purchases of music, and more purchases overall."

Songza also announced a promotional program in collaboration with Creative Commons where independent artists can have their tracks featured on the site's recommended page for 24 hours for 99 cents. According to Songza, the recommended page receives 40,000 unique visitors each day.

Last.fm announced on their blog that beginning today users would be able to stream full-length tracks. People from EMI, Sony BMG, Universal and Warner are all on board, as well as "thousands of independent artists and labels." The service is available immediately in the US, UK, and Germany.

The CBS-owned site already has deals in place with various royalty collection agencies, but under their new program, unsigned artists can upload music and be paid directly for every stream.

In a bit of Facebook-esque hyperbole, Last.fm co-founder Richard Jones proclaimed on the company's blog that Last.fm was "redesigning the music economy."

Last.fm claims that their service is "the biggest legal collection of music available to play online for free." However, with Songza's 28 million songs, it may not be the biggest collection of music available for streaming (the legality of Songza's music might not always be clear since the site is a music search engine, rather than a host like Last.fm). So how do they stack up?

I first tried a search for a relatively obscure artist -- Lemon Jelly -- in Songza. 45 results. In Last.fm: "Lemon Jelly isn’t yet available to play on Last.fm." Next a more popular artist -- Radiohead. Songza yielded about 35 results with a lot of duplicates. Last.fm had 4 tracks, but only one was full-length. How about contemporary rap artist T.I.? 45 results on Songza, a handful of 30 second clips on Last.fm.

I'll leave you to do your own tests and draw your own conclusions.

Update: According to paidContent Last.fm's service will only allow tracks to be streamed 3 times under the current structure of the deal with the record labels. Also, see the comments for info on why my math above a little wonky.