Viacom Strikes Out on Its Own

It's a done deal. Starting today, Viacom (NYSE:VIA) now comes in two distinct flavors. Investors can buy the namesake media giant or CBS (NYSE:CBS). Or, of course, they can buy both and duplicate last year's Viacom.

Viacom first initiated the move to split into two companies back in June. The entertainment giant was hoping to unlock shareholder value, but it went about as well as when Geraldo Rivera unlocked Al Capone's vault in 1986. Viacom stock shed 11% of its value in 2005.

This year should go much better for the sum of Viacom's parts. Both companies are still pretty massive media conglomerates. CBS will naturally include the popular broadcasting network that bears its name and has worked its way to the top of the ratings heap thanks to hit shows like CSI, Without a Trace, and Survivor. The new CBS shares will also include UPN, Showtime, King World, CBS Radio, Viacom's billboard advertising business, Simon & Schuster, and the Paramount amusement park business. The last two subsidiaries are apparently on the block if the price is right.

Viacom will keep its more dynamic cable properties like MTV, VH1, Nickelodeon, and Comedy Central, as well the Paramount movie studio.

For a company hell bent on slimming down in 2006, it certainly went on an unlikely buying binge as 2005 came to a close. The company gobbled up college sports hub CSTV, soon to be part of CBS. It is also feeding recent iFilm.com and Dreamworks SKG impulse item purchases into its Viacom half.

Viacom was never a broken company. In fact, one thing it always seemed to understand was integrating its new media properties into its old media stronghold. Unlike Disney (NYSE:DIS) and General Electric (NYSE:GE), which at one time had tracking stocks for its broadcasting websites, Viacom made the synergy work. Tune into CBS on a football weekend and just see how many times its Sportsline.com site is given props. It was just a few months ago that a deal was brokered for iFilm.com, and Viacom will now be airing Web Junk 20, showcasing clips from the site, on VH1.

With Google (NASDAQ:GOOG), Time Warner's (NYSE:TWX) AOL, and Yahoo! (NASDAQ:YHOO) all rolling out video search engines in 2005, VH1 may have another hit on its hands as it chronicles the wide open space of dot-com broadcasting.

Viacom seemed like a compelling value as 2005 came to a close, so it seems likely that one, if not both, of the new trading entities will work their way into investing fancy this year. However, the split isn't likely what will ultimately lock that value. It will be common sense, derived from a quality conglomerate that just happened to find its share price fetching half of what it used to command nearly six years ago.

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Longtime Fool contributor Rick Munarriz doesn't know if he still wants his MTV, but he knows that Viacom's shareholders wouldn't mind money for nothing. He does own shares in Disney, and Time Warner is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy . Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.