Summary:

How much was CNET Networks worth to CBS (NYSE: CBS) in Q408? About $25 million in operating income, give or take a few thousands. Without CN…

imageHow much was CNET Networks worth to CBS (NYSE: CBS) in Q408? About $25 million in operating income, give or take a few thousands. Without CNET, CBS Interactive operating income was about $1.4 million; with it, CBS reported $28.7 million in operating income on revenues that were up 1 percent. Operating income before depreciation and amortization rose to $51.7 million, up from $6.9 million in Q407. In a twist on some of its competitors, CBS also reported an 8 percent increase in display ad sales. The unit still operated at a loss for the full year, albeit a more narrow one than the previous year: $9.3 million for 2008 versus an operating loss of $21.7 million for Q407.

Looking at the bigger picture, CBS revenues were down 6 percent year over year, to $3.5 billion from $3.76 billion. Operating income, including the impact of acquiring CNET, dropped 58 percent, to $298 million from $704 million the previous year. Net income came out at $136.1 million for earnings per share of $136.1 million, or $0.20 per share, compared with $273.1 million, or $0.40 per share in Q407. CBS also bowed to reality, announcing Wednesday it would cut its quarterly dividend by more than 80 percent — to $0.05 from $0.22, opting instead to keep more of its cash at a time when credit is uncertain and expensive.

From the call: Executive Chairman Sumner Redstone said the dividend cut will not hurt his negotiations over National Amusement debt and that he has not sold any more CBS stock, adding “our lenders are not urging us to do so.”

Advertising: CEO Leslie Moonves said local business and outdoor has been hurt most by the ad downturn, but that network and interactive revenue are holding up better. “Our ratings and internet traffic success are bringing in rate increases even in this economy albeit not nearly at the levels we would like.” During the Q&A, CFO Fred Reynolds refrained from offering sales guidance but said Q109, with comps to a record Q108 for political spending, shouldn’t be seen as “really indicative.” He added a little later: “… Clearly pricing is down and it is a very competitive market out there. It is certainly a buyers market.” Moonves said telcom advertising is strong and pharms are doing “really well.”

Other rev: CBS has reduced advertising reliance to two-thirds of its income, with the non-ad businesses — including Showtime, syndication, DVDs, publishing and retransmission consent fees — providing a buffer. Premium network Showtime added 1 million subs in 2008 and its hit period show The Tudors has been a top iTunes download and a top 10 DVD.

Interactive: Moonves offered the CNET deal as one of the key ways CBS is preparing for the future: “We are in the very early stages of what we will ultimately be able to do with this business but CBS

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