CBS acquires CNET Networks for major Web play

CBS has agreed to pay $1.8 billion in cash for CNET Networks, the online media company founded in 1992 whose brands include CNET, GameSpot,, BNET, CHOW, ZDNet and TechRepublic.

The deal, which offers CBS a slightly younger, tech-savvy audience in the Silicon Valley, will make CBS one of the 10 largest Internet companies in the nation.

The acquisition will increase the total of unique monthly visitors to CBS Web sites to around 200 million worldwide, CBS said. “There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNET Networks,” said CBS chief executive Leslie Moonves. “Together, CBS and CNET Networks will have significant additional exposure to the fastest-growing advertising sector and can accelerate our growth through a number of new content, promotion and advertising initiatives.”

CNET was the target of a hostile bid from investment fund Jana Partners in January. CBS said it would pay $11.50 for each CNET share, a substantial 45 percent premium to where the stock closed the middle of last week. During the dot-com boom, shares of CNET reached nearly $80, but the company’s fortunes have fallen since then, and it recently announced layoffs.

Less than two years ago, Moonves rejected paying $1.6 billion for YouTube, saying CBS was looking for lower cost rising properties for investment. That appears to have changed with the CNET purchase, which is the company’s largest Internet purchase to date.

CBS expects to close the deal in the third quarter. The company is expected to remain headquartered in San Francisco and will retain its current management team.