Old Media Gobbles Up New As CBS Buys CNET


Employees at CNET Networks' San Francisco headquarters were buzzing with the news that the online technology content provider had been acquired by mainstream media conglomerate CBS Corporation Thursday in a $1.8 billion acquisition that has reportedly been approved by both companies' boards.

CNET, a publicly traded company which owns such properties as ZDNet, GameSpot, TV.com, BNET, CHOW and TechRepublic, in addition to its own eponymous technology news site, was bought by CBS for $11.50 a share, an eye-raising 45 percent premium over CNET's closing stock price on Wednesday.

The acquisition could end a rift between CNET's management team and dissident investors led by hedge fund Jana Partners who have recently been critical of CNET's dipping stock price, according to analysts.

CNET CEO Neil Ashe was at CBS headquarters in New York Thursday, according to a CNET spokesperson in San Francisco, adding that CBS was taking the lead on explaining the acquisition to outside media. On a conference call with reporters earlier in the day, CBS CEO Leslie Moonves described the move as a straightforward purchase of CNET's sizable online audience.

"Our idea is to have our content wherever, whenever you can get it, and adding CNET just makes that happen faster," Moonves said on the call.

CBS had 2007 revenues of $14.1 billion, an operating income of $2.6 billion and employs some 32,000 people. The latest revenue figures immediately available for CNET were from 2006, when the company pulled in $387.7 million versus net income of $7.9 million. CNET has roughly 2,000 employees, according to 2006 figures.

The contrast between big-spending old media titan CBS and notoriously thrifty new media mover CNET should invite some interesting comparisons as the companies merge in the coming months.

For example, assuming the average CNET content producer earns $50,000 per year -- a generous estimate given the company's reputation in the tech media community -- CBS News anchor Katie Couric's annual salary of $15 million would represent the wages of a full 300 of her counterparts at CNET.