Feeds

CNET bathes in red ink

But optimistic

  • alert
  • submit to reddit

Boost IT visibility and business value

CNET, the world's biggest IT portal, blames "short-term pressure" in the technology marketplace for falling sales, and losses in Q1.

On a pro-forma basis, (ie. aggregating ZDNet's sales in Q1 last year with its own to provide a meaningful comparison with Q1 this time around), sales fell to $75.2 million, compared to net revenues of $92.8 million in Q1 2000.

This produced an EBITDA loss of $11.7 million compared with an EBITDA profit of $6.7m in Q1 2000.

It's not so easy to see how well a company is doing on EBITDA - earnings before interest, tax, depreciation - as this does not tell you how much money the company is making, or losing, or has in the bank.

CNET helpfully tells us that its adjusted loss, "excluding goodwill amortization, business integration expenses, realized gains (losses) on investments, and income taxes, was $18.2 million versus pro forma earnings of $2.5 million in Q1, 2000.

Now we come to the most meaningful figure - net loss And this is huge - $316.6 million in Q1, against a net loss of $167.5 million in Q1, 2000.

A major part of the loss is a non-cash write-off of $113.2m to reflect torpedoed valuations on some of the company's investments. There's also a relatively small charge of $4.7m to cover redundancy payments, post-ZDNET merger.

CNET has cut operating costs by 15 per cent, post-merger. But there's probably plenty more savings to be had in consolidating what were two large companies. By sheer size and market position, CNET will be better placed to benefit from the technology market upturn than its rivals.

The company punts out 40 million page views a day to a globabl audience estimated at 60 million people a month. It had 1,200 paying customers in Q1, it's got one of the biggest comparison shopping engines, and its customer reach means that plenty of referral deals with merchants.

One thing the CNET/ZDNET model has lacked in the past, though, is finesse. Where Internet.com and newcomer TechTarget.com, or closer to home Silicon.com, promise their advertisers much better click-through rates through precision targeting, CZDNET is, or has been, a bit of a blunderbuss.

CNET's $23m purchase of Techrepublic.com, a community site for MIS professionals owned briefly by Gartner, in Q1 shows that the company is working up its targeting capabilities too. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.