The BBC will cut around 360 jobs and close hundreds of websites as part of "a more streamlined" approach to its online service which was announced today.
The corporation is cutting its online budget by 25% from 137 million to 103 million by 2013/14.
Director-general Mark Thompson acknowledged the changes would be "painful" but insisted BBC Online "lies at the heart" of the corporation's digital future.
He said: "BBC Online is a huge success but our vast portfolio of websites means we sometimes fall short of expectation. A refocusing on our editorial priorities, a commitment to the highest quality standards and a more streamlined and collegiate way of working will help us transform BBC Online for the future."
Mr Thompson said the online service had grown "organically" and there needed to be a reduction in its "scope and scale".
The new service will be divided into 10 different products including news, sport, CBeebies, TV and iPlayer and Weather.
BBC executive Roly Keating said it aimed to close around half of the 400 stand alone websites and webpages set up previously.
He said: "We just don't need them."
Among the services that will disappear are the youth-orientated BBC Switch, Video Nation and a number of forums, blogs and message boards currently being run by the corporation including the 606 community football site.
There will also be a reduction in the amount of sports news.
The job losses include 70 journalism positions, 24 in sport and around 90 in BBC Vision.
The corporation also said it wanted to double the number of referrals to external websites to 22 million each month by 2013/14.
It also promised to take a more upmarket approach to entertainment news with more culture and arts coverage replacing showbusiness news.
The BBC also published a list of things it will not do. These commitments include not to launch a social networking site, publish local listings, run online-only music sessions or pay for exclusive
online sports rights.
The corporation has previously come under fire for the wide-ranging nature of its output.
In 2009, James Murdoch accused it of a "land grab" in a struggling media market and said its news operation was "throttling" competition.
Mr Thompson denied the cuts had been forced on the BBC but said it had taken on "points made to us by the industry about the BBC's market impact".
Around 20 million people a week use BBC Online, according to the corporation's own figures.
A review of the planned changes, published today by the BBC Trust, forecast the amount of online adults who access the service to rise from 55% to 65% in 2013/14.
It also expects user appreciation rates to rise.
Jeremy Dear, general secretary of the National Union of Journalists (NUJ), said the plans showed "contempt" for staff.
He said: "It makes no sense to cut back the BBC website as increasing numbers of people rely on the internet. The NUJ will not stand by idly if members are forced out of their jobs.
"Mark Thompson has turned logic on its head by announcing the cuts with a declaration that BBC Online has been a brilliant success.
"The cuts in jobs and online content will seriously damage a service which has won widespread public support and is the envy of commercial competitors. The BBC proposals fly in the face of public support for the online service. The BBC's own public consultation showed 46% of people supported the online services and there was strong public opposition to a reduction in service.
"The BBC Online Review which has resulted in the cuts proposals was not subject to any public consultation and seriously damages the BBC's reputation for quality."