CBS Buys CNET
$1.8B Deal for CNET's Web Properties to Provide More Circulation for CBS Content
By Robert Marich -- Broadcasting & Cable, 5/15/2008 8:06:00 AM MT
CBS agreed to buy the tech-focused CNET Web site for $1.8 billion, saying that its acquisition’s properties -- including CNET, ZDNet, GameSpot, TV.com, MP3.com, UrbanBaby and CNET news.com -- will provide more circulation for CBS content.
"The acquisition will make CBS 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 said.
"CNET Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience," CBS president and CEO Leslie Moonves said in a statement. "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."
Based in San Francisco, CNET will join other CBS digital-media businesses that include CBS.com, CBSSports.com, MaxPreps, CBSNews.com, Last.fm, Wallstrip and MobLogic.tv. CBS signaled a desire to acquire businesses in new media by naming a onetime deal-making investment banker, Quincy Smith, as president of CBS Interactive.
“The strategic rationale for the acquisition is pretty straightforward, as it allows CBS to add scale to its interactive business,” investment house Merrill Lynch said in a note to investors. “As of April, CNET had more than 32 million unique monthly users in the United States, generating 437 million page views. Prior to the transaction, ComScore reported CBS as having 25 million monthly unique visitors generating 711 million page views.”
Merrill Lynch added that CNET will provide CBS with entrée to new digital advertisers and that sharing back-office overhead will achieve operating-cost reductions at CNET.
Publicly traded CNET is a rare Web property with a weak share price, and it battled investor Jana Partners, which owns 10% of CNET, over the direction of the company.
