For CBS the Web, not Imus, is the news

CBS continues to have the largest audience of any TV network. Its prime-time viewership is up 1% for the season in part because of the popularity of the biggest TV event of the year, the Super Bowl, which CBS broadcast in February. But with sports out of the mix, CBS is down 4% in total prime-time viewers this season from last year, and has dropped 8% among 18- to 49-year-old viewers, the group most sought by advertisers.

CBS has seen its ratings fall on Thursday night, TV's most lucrative. Advertisers, primarily Hollywood movie studios, car companies and retailers, pay a premium to try to influence weekend spending.

CBS was hurt this season when rival ABC moved its hot hospital drama, "Grey's Anatomy," to Thursday night, putting it head to head with CBS' juggernaut "CSI: Crime Scene Investigation." Meanwhile, ratings for another CBS star, "Survivor," have softened, and shifting "Without a Trace" from Thursday to Sunday has also hurt. Its time-period replacement, "Shark," hasn't pulled in as many young viewers.

"The network's ratings have not been great," Reif Cohen said.

This has been Moonves' challenge since 1995, when he took the helm at what was then a moribund network with older-skewing shows such as "Murder, She Wrote" and "Touched by an Angel." Over the last decade, Moonves has steadily rebuilt CBS, bringing in younger viewers with shows such as "Survivor," the "CSI" franchise and "Two and a Half Men."

Reif Cohen believes that CBS has the opportunity to transform itself into a new-media company because of its strong balance sheet, its shows and the determination of Moonves.

There are some silver linings. The company's outdoor advertising division and its premium cable TV channel, Showtime, are performing well, as is its TV syndication arm, which distributes "Entertainment Tonight," "Oprah" and reruns of "Everybody Loves Raymond."

CBS also has taken steps to diversify its portfolio and revenue, first buying the digital cable channel College Sports Television Networks a year ago and, in recent months, announcing plans to start a small feature film unit and a music label. Moonves also hired Smith, a former investment banker with Allen & Co., to lead the company's charge into the digital frontier.

CBS' announcement Thursday that it would create an advertiser-supported programming service for the Web was aimed at demonstrating the company's ability to adapt to changing times. It was meant to show that its programming was strong enough to survive independently from an online video joint venture formed in March by rivals News Corp., owner of the Fox TV network, and NBC Universal.