CBS to Buy Web Publisher CNET for $1.8B
In combination with CBS's own portfolio of sites, such as CBSSports.com and CBSNews.com, the deal would create new Internet destinations.NEW YORK (Reuters) - CBS said on Thursday it would buy web media company CNET Networks for about $1.8 billion to boost the television broadcaster's reach across the Internet. The deal could also put to rest a brewing fight between CNET and an activist investor group led by hedge fund Jana Partners, which wants to shake up the Web company.
Once the purchase is completed, expected in the third quarter, CBS's digital properties will be home to 54 million unique monthly users in the United States and about 200 million users worldwide, the companies said.
A New Internet DestinationCBS said the purchase would help boost its earnings from the start and expects CNET and its CBS Interactive unit combined to reach $1 billion in revenue by 2010 or 2011. Moonves said the deal would be funded from excess cash on CBS's balance sheet and would not affect the company's dividend. CNET's network of Internet sites including ZDNet, GameSpot.com, TV.com, and UrbanBaby.com. The company posted $406 million in revenue in 2007. CBS said the combination would help it accelerate growth within its own portfolio of sites, such as CBSSports.com and CBSNews.com, as well as give it the ability to create new Internet destinations. Miller Tabak analyst David Joyce said investors may well be surprised that CBS made such an acquisition, its largest since it split from Viacom Inc at the close of 2005. But he said the potential benefits from integrating the two companies' Web news and advertising operations could help CBS shares down the road. CBS Class B shares were down slightly to $24.70 in early trading from its close of $24.82 on the New York Stock Exchange on Wednesday. CNET surged to $11.33.
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