CNET Internal Memo: 'Difficult Decisions'; Realignment; May Raise Capital For Foreign Ops

Joseph Weisenthal
Wednesday, March 26, 2008; 5:06 PM

We obtained the internal memo at CNET (NSDQ: CNET) sent out by CEO Neil Ashe regarding the 120 layoffs that were announced this afternoon. The full text is here. Some highlights:

-- Internal task force: "The task force evaluated the following areas of our business: organizational construct, technology infrastructure, editorial development and go-to-market strategies.  Our focus was on creating a leaner centralized organization that provides expertise and best practices around areas of excellence, efficiency, and governance such as IT architecture, SEO, yield monetization, facilities, legal, HR and communications; evolving our editorial teams so everyone is focused on content creation; innovating our technology infrastructure to embrace open APIs and drive more efficiencies throughout the organization; and finally, simplifying our sales approach by building on the traction of our partner account strategy. Based on that business analysis, today, we are making significant changes to the organization.  This includes the very difficult decision to make a workforce reduction that will affect 10 percent of our U.S. workforce or about 120 people."

-- Operations: "Operations is a newly formed organization led by Sam Parker that covers the full breadth of our shared IT and product services.  This group integrates our enterprise business systems and network groups into one team. As part of this change, I'm pleased to announce that Ned Rhinelander is taking on the new role of VP of IT Architecture."

-- Sales: "Dave Morris will take on the role of Chief Client Officer reporting directly to me and joining the executive committee. In this role, Dave will drive our revenue strategy including our management of partner accounts, network-wide advertising programs, and the Detroit auto market.  Dave will also oversee a go-to-market sales strategy that supports the company's revenue plan, as well as business operations and network product marketing."

-- Business realignment: "At the BU (business unit) level, resources are being realigned to support key strategic initiatives that represent the biggest opportunities and drive greater efficiencies.  Here are some highlights from those changes:

- With the move to an open API, CNET will move its services, catalog, content management system onto one platform, making content development, syndication and content import easier and more open

- Within the business group, we have preserved our core investments in BNET, while aligning more of our resources to accelerate the brand's growth.  At the same time, we have realigned our investments in TechRepublic and ZDNET to improve monetization.

- will put more emphasis on areas of most interest to their audience including entertainment features, breaking news, trivia competition, and polls, rather than original video programming

-- International: "Lastly, as I talked about during last quarter's earnings call, to further accelerate growth and leadership in China, the company is considering raising capital from local partners.  We are also in the process of making additional decisions about our international business.  I will be sharing more information about that in the coming weeks."

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