CBS Aims to Boost Web Presence With $1.8bn CNET Buy

19 May 2008

NEW YORK: In a move it hopes will compensate for the expected deceleration in its televsion and radio businesses, CBS Corporation has embarked on its first major acquisition since its spinoff from Viacom two years ago.

Fixed in the broadcast giant's crosshairs is CNET Networks for which it is expected to pay $1.8 billion (€1.15bn; £919.3m). According to CBS ceo Leslie Moonves, the deal will propel CBS into the ranks of the ten "most popular" internet companies.

He believes it will also create opportunities for the media assets of both companies to tap new audiences and advertisers.

However, some see the move as risky. San Francisco-based  CNET, founded in 1992, has been slow in keeping up with the latest online trends and is under competitive pressure from a number of upstart startups.

Moreover, it has suffered from management turmoil and a share price that has sagged over the past two years – accompanied by noisy protests from dissident stockholders.

The putative deal is said to be the brainchild of former banker and web wizard Quincy Smith, hired in 2006 with a brief to transform CBS's internet ambitions into action. Says he: "You need a real platform to launch the next acquisitions out from."

CBS expects to kindle $1 billion in revenues from its combined interactive businesses within three years.

Data sourced from Wall Street Journal Online; additional content by WARC staff