Quincy Smith, the high-profile CEO of CBS Interactive, is planning on leaving his job at the media giant in January to start an advisory firm in Silicon Valley, according to several sources.

But, in an interesting twist, Smith (pictured here) will remain an adviser to CBS (CBS) under a multiyear contract, sources added, making it his first client.

UPDATE: CBS confirmed the move BoomTown earlier reported, in a press release below.

Apparently, Smith will focus intently on video monetization, authentication and other digital issues for the company. CBS is calling it a “transition to a new role,” in its official statement.

CBS Interactive President Neil Ashe will take over Smith’s duties, but without the CEO title, which was a relatively new one for Smith.

CBS is television’s most popular network again this season and its interactive properties are among the top ten in aggregate in both traffic and video.

“I’m very pleased to extend our relationship with Quincy, who is one of the finest minds working in Interactive media today,” said Leslie Moonves, president and CEO of CBS Corporation, in a statement. “Quincy helped put CBS Interactive on the map and we are now a Top 10 presence in premium content.”

Said Smith: “It’s a huge honor to count CBS as my first client. In three years, this company has grown its Interactive profile immeasurably, and yet there is so much more to be done. I love CBS and its people and I look forward to working closely with them to help CBS become the premier video content company, regardless of platform or screen.”

MediaMemo’s Peter Kafka wrote in May about the possibility of Smith departing CBS, where he has worked since late 2006.

As Kafka wrote, Smith has long wanted to start a new media consultancy and has also wanted to return to Silicon Valley.

In fact, the man BoomTown has dubbed the “Energizer Bunny of the Web” was an early employee at Netscape Communications in the Web 1.0 heyday, tried his hand at venture capital and worked on tech deals for media banking firm Allen & Co.

At CBS during the Web 2.0 era, Smith has been aggressively guiding the company into a series of transactions, including the $280 million acquisition of Last.fm in 2007 and the $1.8 billion purchase of CNET last year.

Smith has also been involved with digital issues related to CBS’s strong television assets. He has championed–unlike other media giants–widely distributing CBS content online and keeping control of its advertising sales.

People close to Smith say he often talks of trying to emulate Dan Case, the late brother of AOL founder Steve Case and the former CEO of Hambrecht & Quist, one of the more influential among Silicon Valley investment banks during the first Web boom.

Sources said that the time has now come and that the move is expected to be announced very soon.

It is also likely that Smith’s top business development exec at CBS, Mike Marquez, will also leave to join him at the still unnamed firm.

BoomTown suggestion for a name: Q 3.0.

Here’s Smith in a cameo for a video spoof after he paid $5 million for Wallstrip, the funny business video site which has since been severely sidelined:

QUINCY SMITH SIGNS MULTI-YEAR ADVISORY AGREEMENT WITH CBS CORPORATION

CEO of CBS Interactive to Depart in January 2010 but Will Continue Working with Company on Video Content Monetization, Among Other Projects

CBS Corporation announced today that Quincy Smith, Chief Executive Officer of its CBS Interactive division, will transition to a new role with the company beginning January 2010 as he starts an independent advisory business. In this new role, Smith will advise CBS on strategies and opportunities for growth across the Company’s interactive businesses. Smith, who had led CBS Interactive since November 2006, will remain with CBS Corporation as the division’s CEO through the end of 2009. Neil Ashe will continue as President of the division.

Smith will continue to be closely involved in CBS’s initiatives related to next-generation monetization of video, including oversight of the Company’s effort to explore authentication as a new, additive method of distribution. He will also advise on partnering with technology companies to expand CBS’s interactive presence, as well as explore new growth opportunities related to content, services and applications.

“I’m very pleased to extend our relationship with Quincy, who is one of the finest minds working in Interactive media today,” said Leslie Moonves, President and CEO of CBS Corporation. “Quincy helped put CBS Interactive on the map and we are now a Top 10 presence in premium content. His entrepreneurial spirit and his passion for the business have helped this Company attract some of the most creative minds working in digital media. I know he will continue to be successful in all he’s yet to do, and we’re very happy to have Quincy working with us in this new role at CBS.”

“It’s a huge honor to count CBS as my first client,” said Smith. “In three years, this company has grown its Interactive profile immeasurably, and yet there is so much more to be done. I love CBS and its people and I look forward to working closely with them to help CBS become the premier video content company, regardless of platform or screen. I especially want to thank Leslie for his leadership and counsel, and for giving me this opportunity to continue working with CBS.”

Smith came to CBS Interactive in 2006, and in three years helped build a division that has become a top ten property in terms of worldwide visitors and video views. CBS’s acquisition of CNET in 2008 added industry-leading Web sites like CNET.com, GameSpot, TV.com, chow.com and BNET.com to a portfolio that had already included top ranking properties like cbs.com, cbssports.com and last.fm. Today, CBS Interactive sites span nearly every category of premium content on the Web, across news, sports and entertainment.

Previously, Smith was an executive with Allen & Company, where he was involved with multiple transactions and advised companies such as Comcast, Google and CBS. Prior to Allen & Company, Smith was a Founding Partner of The Barksdale Group, a venture capital firm. Previously, Smith spent five years at Netscape where he ran Investor Relations and Corporate Development and played a role in over 20 joint ventures, investments and acquisitions including Netscape’s ultimate sale to AOL. Prior to that, Smith was an investment banker for Morgan Stanley.

When it reports its first-quarter earnings this afternoon, CNET Networks (CNET) will also announce a much expanded editorial and advertising relationship with Yahoo (YHOO) that will give the tech news site broad distribution on the highly trafficked Internet portal.

CNET and Yahoo have had content licensing deals in the past, in which some CNET content has been featured in the tech areas of Yahoo.

But in 2006, Yahoo launched a more robust tech section, which includes original blogs and reviews, and which many saw as a direct competitor to sites like CNET.

Yahoo more recently launched a Tech Ticker site, a blog-like site aimed at tech investors with original material and a lot of videos, along with content from partners (including AllThingsD.com).

Under the new deal, sources at both companies said a large swath of CNET tech news and also reviews will be carried on Yahoo, making it the major supplier of tech news content to the site. Rather than just focusing on its owned-and-operated properties, Yahoo’s more recent strategy has been to partner with media companies.

In addition, under the terms of the deal, Yahoo will sell some of CNET’s remnant inventory and also allow CNET ad sales staff to sell into some areas of Yahoo.

This deal is likely to be touted as a big win for CNET’s current management, including CEO Neil Ashe, who has been under siege from a group of dissident shareholders who are unhappy with the company’s lackluster performance and have called for a variety of significant changes.

Unfortunately, for CNET (CNET) Networks, it’s not an April Fool’s joke, but more lump of coal to the tech news and review site’s management and board.

Today, a group of very obviously stubborn activist investors, who have been seeking to gain CNET board seats and make other major changes at the company to boost its moribund stock price, will release their own assessment of the situation at the company called, “CNET: Value-Unlocking Change For All Shareholders.”

And their conclusion is no surprise: CNET has failed to deliver for shareholders and its whole operation, along with the board and executive suite, need a complete overhaul.

Since CNET’s major shareholders have been relatively passive and complacent, despite recent declines in the company’s stock price, it is not clear exactly how effective such tactics will be.

And last week, CNET kind of beat the disgruntled group to the punch by throttling itself and announcing that it was conducting layoffs and also making a variety of key changes, as part of a task force to improve the company’s performance.

As BoomTown wrote in a post about the situation:

Thus, to assuage Wall Street, the courts and, well, to look like it was getting busy, CNET laid off 10 percent of its U.S. workforce, or 120 employees, as well as saying it would be fixing a range of other things gone wrong at the company.

That included cutting costs, upgrading technology, rejiggering content offerings, fixing the sales process and “implementing business unit changes to realign resources to support the company’s strategic priorities and promote efficiencies.”

Well, at least the bathrooms are in good working order! But otherwise, that would be everything, right?

Interestingly, the 38-page report–prepared by an activist group led by Jana Partners, and includes Alex Interactive Media, Sandell Asset Management, Spark Capital Management and Velocity Interactive Management–agrees, except that it wants to shove aside the current crew at CNET and be the ones to make the needed changes.

As the group notes in the report’s executive summary not-so-subtly titled “CNET’s Destruction of Shareholder Value”:

The current leadership of CNET Networks Inc. (”CNET” or the “Company”) has presided over massive value destruction, with CNET’s shares declining (25)%, (52)% and (21)% in the one, two and three year periods ended March 28, 2008, respectively, compared to 39%, 6% and (1)% changes, respectively, for its stated benchmark peer index, as set forth herein. Also as set forth herein, CNET has also consistently underperformed peers in profitability and growth, ranking last among these peers in key metrics. This underperformance comes despite CNET’s premiere assets, including the tenth largest collection of Internet sites in the world and strong brands and content.

CNET’s current leadership now claims it can reverse course and begin creating shareholder value, but we believe they have offered no evidence that they can do so. Despite years of shareholder value destruction, CNET’s leadership during this time failed to act on the urgent need to make fundamental strategic and operational change, instead pursuing a failed expansion strategy even as CNET fell further behind. CNET’s leadership did not even start examining the basics of improving performance until we called for change, both publicly and directly with CNET’s Board of Directors.

In addition, we believe CNET’s Board and senior management lack the industry-specific experience and expertise to stop this shareholder value destruction. CNET’s Board of Directors’ backgrounds in our opinion are primarily in traditional media or early-stage technology rather than today’s digital media landscape, while its senior management team consists primarily of first time senior public company executives without significant operational experience at large Internet companies other than CNET.

Also, they take candy from babies!

Okay, maybe not that, but the group, which admits in the report that it is only an external review, posits that CNET needs a new board, made up–natch!–of its selected members.

That includes former AOL head Jon Miller, CAA exec Brian Weinstein and other Web execs from IAC and Overture, as well as reps from Spark and Jana.

The report also insults CNET’s expansion into verticals, such as shopping service MySimon, and calls its transition to Web 2.0 technology cloddish.

As for recommendations, the report says CNET must improve things like its monetization infrastructure, build a vertical ad network, make third-party ad deals, turbocharge its SEO techniques, add in more social media doodads, fix its publishing and content management system and, of course, cut costs.

The report also denies that the activist group is seeking to control the company, in order to essentially buy it without paying a premium, as CNET has contended.

And, finally, it outlines the grim road to the current tensions between CNET and the Jana group, including failed settlement talks, corporate moves and countermoves and, inevitably, the legal action.

For now, CNET’s board and management do not seem inclined to change their stance on its mano-a-mano with Jana, which recently won in court over being allowed to nominate directors to the board of the company. CNET has said it would appeal that ruling.

Clearly, CNET is taking a hard line, despite the fact that it has a somewhat weak position in regards to its glaringly obvious performance issues.

Thus the report from Jana, which is, basically, a we’ll-see-about-that! response.

In fact, as the report notes at the end:

CEO Neil Ashe has referred to this contest as a ‘chess game,’ which we believe perfectly encapsulates CNET’s misunderstanding of the situation. This should not be a game of legal tactics but a debate about the future of CNET and who is best qualified to guide the strategic direction of the Company and create maximum shareholder value.

No checkmate yet, of course, but now it is clearly CNET’s move.