CBS Corporation, the media giant that operates in every field of media including broadcast television, radio, outdoor advertising, and publishing, agreed to buy leading web publisher CNET Networks for $1.8 billion. CBS will pay $11.50 to CNET shareholders for each share of CNET.
CNET Networks has been under pressured by shareholders who claimed that the current Board of CNET has not been doing enough to improve CNET’s value as CNET’s stock price has dropped from $16 in 2006 to $7.95 prior to the announcement of the deal.
CNET’s traffic is growing however revenue has not grown as fast as other online companies. US revenue actually dropped in the first quarter of 2008 as compared with the first quarter of 2007. Overall revenue for the first quarter of 2008 only grew 2.6% from the first quarter of 2007. CBS however thinks the combined unit will be able to reach $1.0 billion in revenue by 2010.
CBS is correct that this acquisition will give them a larger audience in the rapidly growing online advertising median. CNET and CBS Interactive combined will have approximately 200 million unique users per month worldwide. CBS Interactive will automatically become one of the top ten destination online by US user count.
Will CNET make CBS Interactive into the $1.0 Billion revenue-generating star? I guess we will have to stay tuned.
Find more details on the acquisition of CNET Networks at http://www.willtheymerge.com/CNET.php
Will They Merge? is dedicated to publicly traded Mergers and Acquisition deals. The site monitors recent publicly traded acquisitions, post relevant links to the deal information and allow users to vote if they think the deal will be successful.
http://willtheymerge.com