In a move to greatly expand its Internet footprint, CBS Corp. is acquiring technical news powerhouse CNet Networks Inc. for $1.8 billion.
CNet’s assets include to potentially huge Internet domains news.com, search.com, TV.com and mp3.com, as well as ZDNet, GameSpot.com, CNET news.com, UrbanBaby, CHOW, BNET, MySimon and TechRepublic.
“There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNet Networks,” said CBS President and CEO Leslie Moonves. “CBS stands for premium content and unparalleled reach, and CNet Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience. 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.”
Not all are impressed with the synergy strategy.
“NBC’s struggle to get value out of iVillage show that the synergies between TV and online content are elusive at best,” blogged Saul Hansell of The New York Times. “Remember that CNet itself was started to be a multi-platform company, the first to combine television and the Internet. But video never became an important part of CNet.”
CBS will offer $11.50 per share for CNet Networks—45 percent above CNet’s value at the end of trading May 14 of $7.95.
San Francisco-based CNet lost $6.1 million in the first quarter of 2008 on revenue of $91.4 million
CBS said the deal will make it one of the 10 most popular Internet companies in the United States, with a combined 54 million unique users per month, and approximately 200 million users worldwide.
CBS has been active on the Internet front already, with initiatives such as even as it haslaid off scores of staffers in its traditional broadcasting business.
The transaction is subject to conditions and is expected to be completed in the third quarter of this year.
