Why Buying CNet Makes Sense for CBS

27 thoughts on “Why Buying CNet Makes Sense for CBS”

  1. Om, a good analysis but you are wrong in what CNET need to do. They do well in SEO, they already have an ad deal with Google that is hugely in CNET’s favour (10% of revenues, remember?), and people will tell you CNET’s client and agency sells team are among the best around.

    CNET have kicked out a lot of people over the last twelve months so I disagree with that point too. In fact, CNET has almost everything it neds except a real zest within the workforce. They’ve been through a lot of change and they need to be helped back up. If CBS can give them that and motivate them further, THEN CNET will super-perform.

    What CNET need to do is address their publishing infrastructure: unite the disparate pub-tech elements within the business, scale it internationally and simplify business process.

    That will make it easier for their great people to do good work, which is what they need.

  2. Wow – did Quincy pay you for that review ;)? Kidding.

    “Ahead” of ABC? ABC is raking in the dough on their site – they have the number 1 video player and rank #1 with women watching TV (not youtube stuff) on the web.

    NBC, if you forgot, owns ivillage; has a strategic deal with PopSugar, owns TVwithoutpity, etc. Kind of got that covered as well.

    This deal makes much more sense with Viacom – Gamtrailers, and all that.

    CNET is barely – and often not – profitable. As the WSJ put it this AM: this deal seems like it’s out of 1999 – all about traffic and eyeballs and not about making money.

    I’m really disappointed in you Om – you are usually much more on top of these things. It’s a Quincy / Les vanity play that will reduce CBS shareholder value.

  3. @ Steamboat Willie… (Nice name by the way)

    This is hardly a vanity play. It makes CBS a legit player, and bolsters their digital operation. I think in last 12-18 months they have put together a strategy to build a business that didn’t exist. I think you are being harsh in judging them. What do you expect them to do – not do anything. This is a great move.

    Secondly, you bring up NBC and iVillage. There have been some challenges NBC/GE have faced their and have owned it for a while. Little skepticism is actually valid here.

    ABC: how much dough is it raking? Since you seem to be in the known (Steamboat = Steamboat ventures = Disney) care to elaborate 🙂

  4. @ Ex-CNETter

    Good points. As both of us said: SEO & Community should be top priority. Rest of the suggestions come on numbers based on their recent 10-Q. I think they can do much better in terms of their long term deal with one of the three. I’m looking at the Facebook/Digg deals and CNet clearly has better page views with higher click through potential.

    Look at the Sales & Marketing expenses. They are so out of whack with industry average and the amount the company spends on editorial.

  5. Interesting and slightly off-topic thought:

    CBS will now own the domain “news.com”. CBS would be foolish not to steal that domain away from C|Net’s tech news site and use it for CBS News instead.

    C|Net also owns tons of other very valuable domain names such as “search.com”. It’s a shame they never did much with them.

  6. On paper, I love this deal for the reasons that you assert. This is a broken brand with a bruised culture but good and varied media properties. It needs a new heart but not necessarily a new brain.

    As is the challenge in deals like this, it is all about integration and figuring out what the hell synergy means relative to CBS’ digital media/broadcast media universe.

    I like what I have seen of CBS’ approach between baby steps in bleeding edge and bigger steps like this. What I have less of a sense of is CBS’ uber vision and how they plan to orchestrate in a more than the sum of the parts fashion.

    Cheers,

    Mark

  7. While CBS has acquired some valuable Internet real estate (News.com, Radio.com, Search.com to name a few)for Quincy Smith to develop, they will not have control of The Whole Damn Net.com Not for the time being. Sorry CBS, but as much as I know you’d love to lay claim and lord over The Whole Damn Net through CBS Interactive, Mark Cuban currently has the inside track to claim it.

  8. Om-

    Do you think this will make one of the other large media companies like Disney/ABC or NBC Universal suddenly interested in buying Yahoo?

    Despite the AOL-Time Warner disaster, I see one of those companies being a better fit for Yahoo than Microsoft.

  9. It was also rumored that Jana Partners, Google and Yahoo wants to buy CNET before CBS came in. And you are right, it might be a good acquisition. This site was part of the acquisition right? And hope alot of improvement will be observed.

    Thanks
    Charles
    resourcesandmoney.blogspot.com

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