UPDATE 2-Google signs CBS, in talks with others on web TV -sources

(Adds details about discussions, context around competition, share prices)

By Jessica Toonkel

Oct 19 (Reuters) - Alphabet Inc unit Google has reached an agreement with CBS Corp to carry the network on its planned web TV service and is in advanced talks with 21st Century Fox and Viacom Inc to distribute its channels, three sources told Reuters on Wednesday.

The service, which will be part of Google's YouTube Platform, is expected to launch in the first quarter and will include all of CBS' content, including live NFL games, one of the sources said.

Google's so-called "skinny bundle," with fewer channels than a typical cable subscription, will cost $30 to $40 a month, the source said. It was unclear which Fox and Viacom networks would be part of the Google service, two of the sources said.

The sources requested anonymity because the discussions are confidential. A spokesperson for YouTube declined to comment.

Google will be launching into an increasingly crowded market. Dish Network Corp and Sony Corp, which in the past year have launched skinny bundles to appeal to younger viewers who do not want to pay for cable.

And both AT&T Inc and Hulu, the online video service owned by Disney, Fox, Comcast Corp and Time Warner Inc , have streaming television offerings that are expected to go live in the next few months.

The Wall Street Journal, which first reported the news, said Google was also in advanced talks with Walt Disney Co. (http://on.wsj.com/2eShhLp)

A representative at Disney was not immediately available for comment. CBS, Viacom and Fox declined to comment.

Google has been talking to media companies about its web TV for years, but its plans have just ramped up over the past few months, one of the sources said. Apple Inc had looked at a similar service but has shelved that plan for the time being, sources had previously told Reuters.

Shares of CBS, Viacom and Fox rose to fresh session highs on the latest news before they pared gains. Shares of Twenty-First Century Fox ended up 16 cents at $25.12, Viacom rose 23 cents to $36.37, and CBS closed up 0.8 percent at $55.53. (Reporting by Jessica Toonkel in New York and Anya George Tharakan in Bengaluru; Editing by Don Sebastian and Richard Chang)

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