CBS-CNET: The Logic Of The Deal


imageCBS’ (NYSE: CBS) acquisition of CNET (NSDQ: CNET) for $1.8 billion is already prompting some predictable shoulder shrugging from folks wondering why they went with a (here come the scare quotes…) “web 1.0” company and not some hip young thang. Look: There was no MySpace out there at $580 million. If you know of one, tell Leslie Moonves about it now and maybe you can have Quincy Smith’s job. Buying up internet companies poses a standard tri-lemma: growth, meaningful revenue and affordability — pick two. CBS picked affordability and revenue in exchange for a company with limited growth prospects. They might have bought something else for a lot less money, but without any clue of when or if it could return them a buck. The company decided it needed a major platform to help CBS Interactive get more in the game, and realistically, wasn’t going to be that. As Moonves told Staci this morning: “This accelerated our process quite a bit. We could have continued buying this and that and other Last.FMs and we said this is a great way to jump start our position in the internet world.

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