NEW YORK – CBS Corp., facing a slowdown in its core television and radio business, is taking a major step to boost its Web footprint with a planned $1.8 billion acquisition of CNET Networks, a major technology news organization.
The cash deal, CBS’s biggest since splitting from Viacom two years ago, represents a high-profile bet that CNET and its technology and entertainment Web sites will provide CBS an online platform it can build on, The Wall Street Journal reported. It also positions CBS to tap an anticipated boom in online graphical display advertising.
It is a risky move. CNET has fallen behind on some of the latest online trends, and it faces intense competition from upstarts. The San Francisco company has suffered from management turnover, its shares have tumbled in the past two years, and it recently found itself the target of dissident investors.
Founded in 1992, CNET is one of the few independent midsize Internet companies left. While dwarfed by Internet companies such as Yahoo Inc., it has built a diversified portfolio, ranging from videogame site GameSpot to TV.com.
CBS Chief Executive Leslie Moonves said the deal would propel CBS into the ranks of the 10 “most popular” Internet companies and provide opportunities for the media properties owned by CNET and CBS to tap new audiences and advertisers.
CNET’s sites tend to draw younger audiences than CBS’s properties, which include the flagship TV network as well as Web sites such as CBSSports.com. CBS, meanwhile, has strength in advertising categories CNET is light on, such as automobiles.
CBS has been on a campaign to diversify beyond its traditional base, in hopes of boosting earnings growth and its flagging stock price. The company, controlled by media veteran Sumner Redstone, generates lots of cash, which it has devoted to generous dividends. But it signaled this year that it plans to use some of that for acquisitions.
a>>
