CNet, one of the pioneers in online content, will be bought by US network CBS. Normally I wouldn’t pay much attention to such an acquisition, but given the atmosphere in lately, it makes such transaction a little more interesting.
CNet will be acquired with a $1.8B price tag and for that amount of cash analysts are thinking CBS paid a higher premium for an “old” internet company. The deal was facilitated by the pressure by activist stockholders on CNet’s side and stocks jumped when the news was announced. But enough about the financial aspect of the deal– I’m more interested on the logic of it and how it makes sense, web-wise.
Prior to this acquisition, people were smarting over Microsoft’s proposed acquisition on online giant Yahoo. This deal is similar in many ways to the Microsoft-Yahoo deal that fell through, in the sense that a “traditional” media company is gobbling up a smaller, but better positioned company for long term viability. CBS has recognized the move of the media consumer to the web and they more or less have seen that their interactive media offerings will not be enough to make them a significant player in the next 10 years. CNet has demonstrated that it can give content to sustain itself for more than a decade. (Given that most pre-dotcom bubble companies are gone, that’s a pretty good achievement.) If CBS wanted to be a major player in the coming rounds of digital media battles, it needed more resources and properties in that front.
CBS had already joined the digital media party by acquiring last.fm before. Their rivals have made steps in the same direction, with News Corp’s acquisition of former social network darling MySpace two years ago and there could be one media company that will eventually buy Facebook. Pundits are saying Big Media and Big Business still have the internet and digital media itch. Could this deal be a sign of consolidation in the next couple of years?
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