CBS Hires Quincy Smith To Find The Next YouTube

The "Who's News" section of Today's Wall Street Journal carried a prominent piece about CBS hiring one Quincy Smith, formerly of Allen & Co., the media investment banking firm.

Smith has admittedly great credentials for a 35 year old guy. He's apparently well-entrenched with the Google leadership troika, having been involved in Netscape some years earlier.

Now, a little background on this hire. Les Moonves, CEO of CBS, the spun off dreck of Sumner Redstone's mistakenly integrated Viacom, watched his boss fire Viacom's CEO, Tom Freston for, among other sins, not moving into internet businesses sufficiently quickly. Moonves is even quotes as saying,

"This shows how serious we are about new media.....We're looking to buy the YouTube that nobody has heard of yet. Quincy is the right person to help us place those bets."

Interesting. Here, Freston was being careful about selecting his entry point in a difficult situation, and Moonves, seeing that approach fail, simply ladles out cash to a new media business star, letting Smith take the ax, should things go awry.

And that's why I wanted to write this post. I think they probably will go awry. Not because Smith isn't good- he probably is.

It's that he is at CBS now. Being a highly-paid pawn, knight, or maybe even rook, on the CBS chessboard. And if I recall correctly from a fragment of a Michael Eisner interview with Redstone just last month, the latter decried anyone paying up for YouTube. Meanwhile, as I have written here, I think those who seek the "next" YouTube have the wrong concept of what's now happening in online media. Verizon's desire to be a "destination" on the internet is probably wishful thinking now.

So, we have Les Moonves charging Quincy Smith to find the next YouTube, while Sumner Redstone is already wary of paying up for new media outlets. Sounds like a recipe for frustration and disaster. And if all Smith does is broker some deal with Yahoo or AOL, how much did CBS really need to pay to do that? It would seem Smith's value is in finding precisely the kind of diamond in the rough away from which Redstone shies.

Why didn't Moonves just retain Allen & Co, with some equity sharing arrangement to incent the latter, to do the same thing for CBS, with less risk?

I don't see the Quincy Smith hire as leading to CBS demonstrating consistently superior returns for shareholders over the coming years. So the CBS/Quincy Smith saga should make for some entertaining business news over the next 12-18 months.