First Take: CNET: The Brand Everyone Wanted To Buy, But Didn't Really

Rafat Ali
Thursday, May 15, 2008; 10:07 AM

So the saga of CNET (NSDQ: CNET) Networks finally has a home...well, at least on paper for now if and when the deal goes through, because there will be a lot of drama and opposition from Jana consortium on this. As Joseph mentioned, and as we implored before for CBS, this is the big one they had been wanting to do. I know from sources that CBS (NYSE: CBS) had looked at CNET at least three times before, as had everyone in the world, and passed on it. Not sure how CBS felt the economics had changed (well, CNET became more desperate, for one), but this certainly gives them a big play to build on its relatively small-ish and TV-focused online efforts till now. Everyone looked at CNET, including Yahoo (NSDQ: YHOO), New York Times (NYSE: NYT), CBS-sister company Viacom (NYSE: VIA), and many many others, but couldn't make the economics work. The very same economics which Jana had been criticizing for a long time now.

As to whether this will be the transformative acquisition CBS was waiting for on its digital side, it certainly has a huge task at hand to make this work. CNET is a company laden with a lot of legacy, both operationally as well as the tech platform side. Trying to trim the fat, rework the platform, sharpen the focus, build a more experienced team, figure out the international part, and then monetize the brands will be among the big challenges on the deal. The company will have to work had to make sure CBS doesn't come to be knows as "CNET Buy Sunk" 'em.

Update: The mood from OPA conference here in London is of slight befuddlement. It is a bit to early to parse through all the implications of the deal, especially on the consumer Internet side. CNET, as we know, is a jumble of various properties, especially on the consumer side, but the possibilities are, well many. Trying to prioritize the many will, again, be one of the keys to the future of this combination.

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