Tipping its hat to the power of the Internet, Deseret Management Corp. is creating a new business unit to manage the Web sites and other operations of digital-media properties owned by the LDS Church, including DeseretNews.com.

Deseret Digital Media will take over the online sites of Deseret Book, Deseret News , KSL television and KSL NewsRadio. The sites are deseretbook.com, deseretnews.com, ldschurchnews.com, mormontimes.com and ksl.com.

The creation of Deseret Digital Media "is driven by a belief that we can be more effective in growing our Internet businesses if we set them up in a separate division," Mark Willes, president and CEO of Deseret Management Corp., said Thursday.

Willes also announced the formation of the KSL Broadcast Division, which will be created from Bonneville International Corp. Bonneville had owned and operated KSL-TV and KSL NewsRadio, as well as 28 radio stations in eight U.S. markets.

The broadcast division will focus only on KSL-TV and KSL News Radio; Bonneville will continue to manage the other radio stations in markets outside Utah.

Willes is a former publisher of the Los Angeles Times and former CEO of its parent company, Times Mirror Co. In February, the LDS Church First Presidency asked Willes to take over leadership of Deseret Management, the for-profit company that oversees commercial businesses attached to the church, including the Deseret News and KSL.

Within a month, Willes launched a sweeping shake-up of Deseret Management to cope with worsening economic conditions. At the time, he said the First Presidency wanted Deseret Management run as an operating company instead of a holding company.

The difference was significant. As a holding company, Deseret Management's role was largely passive, limited mostly to offering advice and council to its subsidiaries. Under the new structure, Deseret Management is directly involved in running the subsidiaries.

Willes's next action was to halt sales of life insurance policies and annuities by Beneficial Financial Group, a century-old insurance company and subsidiary of Deseret Management. Agents stopped selling policies in August.

On Thursday, Willes said setting up the new digital and broadcast divisions will permit their managers to pursue growth strategies that make the most sense for each business.

"That's a matter of having organization follow strategy," Willes said, referring to the bifurcation of Bonneville International into two divisions: Bonneville and KSL Broadcasting.

"The strategy that you would use to grow a national radio business is likely quite different from the strategy you would use to grow a collection of local media businesses [like KSL television and radio]," Willes said.

He said the same notion holds true for gathering deseretnews.com and the other church-owned commercial web operations under one umbrella.

Deseret Digital Media will be led by Clark Gilbert, who currently is an associate academic vice president at Brigham Young University-Idaho, where he is in charge of growing the school's online activities.

Gilbert said Deseret Management will use the new digital division to develop a revenue stream to support additional Web products and services it will aim at U.S. and foreign Internet users. At the outset, however, most of its products will come from the deseretnews.com, ksl.com and other local Web sites that collectively have nearly 4 million users a month, he said.

"We will see content enhancements around the existing properties [such as deseretnews.com]. We will also see growth in the number of properties and we will see a continued expansion of our audience and our reach," he said.

A few media companies -- notably The New York Times , the Dallas Morning News and the San Diego Union-Tribune -- have developed similar online divisions. But there is no consensus about whether they create new audiences and more advertising revenue, said Rick Edmonds, media-business analyst at the nonprofit Poynter Institute in Florida.

"Boston.com [established by The Boston Globe] and nytimes.com are good models in the sense that they have been run fairly independently. They have developed audiences quite successfully, and I think that has something to do with being managed separately from their newsrooms," Edmonds said.

But on the other hand The Washington Post has returned its stand-alone washingtonpost.com operations from Virginia back to its newsroom.

"They decided at a certain point that wasn't working well for them, and it needed to be brought back into the main organization," Edmonds said. "I don't think there's really a consensus about the best way to do it."

Deseret News Editor Joe Cannon said his reporters and editors will provide content to Deseret Digital, but will operate independently from the new division.

"It will be fascinating to see what emerges out of Deseret Digital Media," Cannon said. "It starts out with assets connected to the Deseret News , KSL and Deseret Book. But that's just the beginning."

pbeebe@sltrib.com