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CBS Turns Its Eye to the Web, Landing Network of Tech Sites
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In a call with analysts yesterday morning, CBS chief executive Leslie Moonves said he had not spoken with Jana representatives.
Asked if the Jana insurrection could be an obstacle to the deal, Smith said: "I think whenever you announce an offer like this in this kind of space, with a [deal] close this far away, of course I see obstacles."
By acquiring CNet, Moonves has landed a big digital fish, and -- unlike many -- one that has been profitable.
For the first quarter of 2008, CNet reported a net loss of $6.1 million. But for full-year 2007, the company reported a profit of $177 million.
Also, unlike many digital content companies, CNet's price-to-earnings ratio is under 10, making it a relative value in the industry. WebMD Health's p/e ratio, for instance, is about 42. Sina, a CNet rival based in China, has a p/e ratio of about 58.
"We love the international opportunities as well, especially having a profitable footprint in China," Moonves said in the analysts' call.
With the purchase, Moonves also may be hoping to avoid the fate of Tom Freston, former chief executive of Viacom. Freston did not buy MySpace in 2005, letting it fall into the hands Murdoch, who has watched its value skyrocket.
In September 2006, Freston was ousted by Viacom Chairman Sumner M. Redstone, who is so enamored of digital content that he is the major owner of video game developer Midway Games.
Even though Viacom and CBS split in 2005, with Freston taking Viacom and Moonves taking CBS, Redstone remains executive chairman of CBS.
