CBS CEO Les Moonves

CBS Buys CNet To Expand Online Reach

May 15, 2008 05:41 PM
by findingDulcinea Staff
The television network announced Thursday that it is acquiring the troubled online news and information firm for $1.8 billion. Analysts debate whether the marriage will click.

30-Second Summary

The two companies agreed on a buyout price of $11.50 per share—45 percent higher than CNet’s price at the close of trading on Wednesday evening.

CNet’s shares went up $3.49 during Thursday morning trading to $11.43, something that “should make even CNet’s dissidents happy,” writes Fortune magazine.

The deal will also likely resolve an impending proxy battle between CNet and a group of disgruntled investors led by hedge fund Jana Partners LLC.

CNet CEO Neil Ashe
communicated his satisfaction with the deal in a staff email: “Together CBS and CNet Networks represent an unbeatable combination of premium content online, premium content on air and premium audiences.”

Among CNET's assets are two of the most valuable, yet under-utilized, Internet domain names: and

The move marks yet another step by CBS to expand the audience reach of its Internet properties to appeal to the mass advertisers that already buy on CBS Television.  All of the Internet properties owned by CBS and CNET combined reach 54 million Internet users in a full month;  by contrast, CBS Television reaches more users over five episodes of 60 Minutes.

And although CBS CEO Les Moonves said the online company “will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience,” investors appeared unimpressed as CBS shares fell 3.6 percent to $23.93.

Information Week writer Alexander Wolfe is equally skeptical, arguing that it is unclear whether users still want text-based news and reviews with the proliferation of social-networking sites.

“It’s no longer evident that online media companies can support the high costs of creating content (i.e., stories) for the Web,” Wolfe writes.

Nonetheless, CBS isn’t the only television network turning to the Internet. In 2006, NBC purchased the popular women’s Web site iVillage for $600 million. “From this platform, NBC Universal will chart the next generation of digital content development and enhance user experience,” NBC said in a statement.

Headline Links: CBS Buys CNet

Video: ‘CBS Looking for Clicks in All the Wrong Places’

Background: ‘Supreme Court of Delaware Upholds JANA Partners’ Right to Nominate Directors’

Key Players: CNet CEO Neil Ashe and CBS CEO Leslie Moonves

Opinion & Analysis: Will CBS benefit from the deal?

Related Topics: CNet shares rise, CBS shares fall; NBC’s iVillage purchase

Reference: CNet Networks


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