Deal valued at $1.8 billion
CBS is paying $1.8 billion in cash for CNET Networks, a San Francisco-based Web conglom that branched out from its tech-review roots to control a range of sites including UrbanBaby, TV.com and MP3.com.
Eye execs say the deal will enhance the capabilities of CBS Interactive, which has been using offerings such as streams of the Final Four basketball games and clips from primetime shows to gain traction. By 2010 or 2011, the company says, revenue from the unit should pass $1 billion.
The deal gives CBS a combined 54 million unique users per month in the U.S. (ranking it among the top 10), and some 200 million worldwide, according to the company.
“There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNET Networks,” CBS chief Leslie Moonves said.
Later, during a conference call to discuss the deal, he said talks had been under way for nearly two months. Jana Partners, a major shareholder in CNET, has been advocating a major shakeup of the Web conglom. Reps had no comment on the takeover, saying it was under review.
Apart from its namesake tech site, CNET Networks also owns ZDNet, GameSpot.com, Chow, MySimon and TechRepublic. It has a strong footprint internationally, especially in China, CBS said. CNET’s revenue in 2007 was $406 million.
CBS is paying a roughly 45% premium over CNET’s Wednesday close; CNET shares soared 44% on the news to close at $11.41.
The news dinged CBS shares, which shed more than 2% to finish at $24.23.