In a deal that was surprising only in its price, CBS has announced that it will buy CNet, owners of everything from News.com to Download.com to our competitors Webware, for $1.8 billion.
That’s 10% more than Google paid for YouTube, and that deal was all for stocks. CBS paid a 45% premium over CNet’s closing stock price and it paid it mostly in cash. CBS buying CNet is a big, complicated deal with a lot of possible take aways, but below are ours.
CNet is Well Baked
Founded in 1993, CNet is the granddaddy of all the blog networks on the web. It’s had a good long time to marinate, has major internal problems like suit-happy shareholders and arguably fluctuating traffic, but CNet is as stable an online collection of brands as anyone out there.
What gets validated here is this: great online ad sales, high production value, serious talent, company maturity and breadth in both content and distribution. While all of those have always been important business traits, upstart content networks on the web have tended to focus far more on marquee personalities. Perhaps that’s only a short term strategy until some of us can hope to build out networks with more fundamental business strengths.
CNet’s content producers may not be flashy web 2.0 names but they’ve got rock stars of their own over there. Larry Dignan is an enterprise dark horse that our readers may or may not know about but who regularly rocks Techmeme more than anyone but TechCrunch. Declan McCullagh may be the best political tech blogger there is. Caroline McCarthy combines scoops, research and professionalism in a way that anyone would do well to learn from. WebWare may not get talked about in some Web 2.0 circles, but it’s one of the very biggest blogs in that market and is written by people like Rafe Needleman and Josh Lowensohn – both of whom would be great on TV. I’d embed a CNet video here to demonstrate its production value, but few of the company’s video properties allow embedding. So much for web 2.0, eh?
The above are just the Web 2.0 type names at CNet, we’re less familiar with the company’s powerhouse properties in gaming, consumer electronics and autos.
The importance of a strong ad sales team can’t be understated. While most blog networks in this nascent medium end up selling ads with one side of the brain and writing content with the other, maybe teaming up with an ad network that pays the bills but doesn’t power growth, CNet is lauded for their in-house ad sales team. If hiring top talent, doing in-depth research and offering high production value are important, then there are few aspects of content online more key than strong ad sales. Strong ad salespeople are hard to come by.
Finally, CNet’s distribution of content (including some RWW articles) in China and Japan is more serious than any upstart blog network has been able to accomplish. What markets could be more important, other than India?
CNet is a mature, accomplished and broad network. While it may be more fun for some of us to read other, smaller, edgier blogs (RWW included, we hope), CNet properties are far closer to being household names than any one else in our market. Now they’re part of CBS.
What Will CNet Look Like at CBS?
It appears that CNet will maintain a high degree of independence at CBS, but we can assume that some of its energy and brains will focus on bringing CBS into the next era online. Along with recent, much smaller, purchases of the recommendation technology behind Last.fm and the brains of Wall Strip, CNet should help CBS put more than just its toe into the waters of the web.
Will CBS TV content become available online more quickly? Will CBS TV content get better with an infusion of creative talent from the web? Will CBS create a show called “Everybody Loves Redmond,” as one joker in our community of readers offered? Will all talent get diffused and leave innovation lovers wondering what happened to CNet in just a few short years?
It’s hard to say for sure, but if nothing else – CNet offers one vision of what it takes for an online content network to cash out big time.
