CBS saves CNet from activist investors
Billion dollar buyout
CBS is buying CNet Networks - the web publisher behind ZDNet, gamespot.com, tv.com, mp3.com, news.com and techrepublic. These sites will now be combined with CBS's websites.
CBS is paying $1.8bn for CNet - a 44 per cent premium on its share price. The combined properties will have 54 million unique users per month in the US and 200 million worldwide.
Quincy Smith, president of CBS Interactive, said: "The core businesses of CNET Networks and CBS Interactive represent near perfect category symmetry in premium online content". He said the deal would allow the two companies to "build new verticals" as well as grow their existing businesses.
The deal is good news for CNet which has been under pressure from shareholders. In January two institutional investors were pushing to get extra people on the board of directors to reverse CNet's falling share price which has been on the slide since January 2006.
CBS has also been criticised for "not getting the net" - its early stategy of driving viewers to one site - CBS.com - were abandoned for a more shotgun approach.
CBS did a round of deals with various web publishers including AOL, Bebo, Comcast, Joost and CNet in 2007 to get its shows distributed more widely online. CBS also bought London based music site last.fm for $280m in 2007.
CNet's board has unanimously approved the offer and recomends CNet shareholders do the same. It is expected to close in the third quarter.
Press release here. ®