Cnet Networks Inc - Acquisitions And Mergers, 2000

ACQUISITIONS AND MERGERS (2000)

CNET continued to be active in broadcast media in 1999 and 2000. In fall 1999 CNET News.com debuted on CNBC, and the company launched the CNET Investor Channel. In January 2000 CNET formed an alliance with AMFM Inc. to create CNET Radio, the first U.S. all-tech radio format. That same month CNET spent $700 million to acquire comparative shopper mySimon.com. In March the company changed its name from CNET Inc. to CNET Networks Inc.

In July the merger of two major technology portals, CNET and ZDNet, was announced, with CNET acquiring Ziff-Davis Inc. With 16.6 million unduplicated users, CNET Networks became the eighth-largest Internet property, according to Media Metrix. The sale of Ziff-Davis Inc. and ZDNet to CNET was completed in October for approximately $1.6 billion. Earlier in the year Ziff-Davis Inc., ZDNet's parent company, had sold its Ziff-Davis Publishing business, which included computer magazines PC Magazine, PC Computing, and PC Week. Also not included in the sale to CNET was ZDTV, which had been sold to Paul Allen's Vulcan Ventures. In addition to the Web portal ZDNet.com, CNET gained Computer Shopper magazine, the SmartPlanet online service, and an equity stake in Red Herring Communications. Japanese software giant Softbank Corp., which owned 50 percent of Ziff-Davis, would have a 17-percent interest in the new company.

As a result of its acquisition activity, CNET reported revenue of $264 million for 2000, compared to $112.3 million for 1999. However, acquisition costs and interest expense resulted in a net loss of $484 million, compared to net income of $416.9 in 1999. For 2001, the company appeared committed to making more acquisitions. In April it acquired a 90-percent interest in the technology industry research firm TechRepublic Inc. from the Gartner Group for $23 million.