OLD Media Moves

CNET acquisition pays off for CBS

May 26, 2009

Michael Learmonth of Advertising Age takes a look at the acquisition of CNET by CBS one year later and finds that the deal has worked well for both sides.

Learmonth writes, “One of the original hypotheses for the deal — that CBS and CNet shared very little audience overlap and, therefore, wouldn’t cannibalize each other — turned out to be true. Nine months after the deal, unduplicated U.S. unique visitors notched 54.4 million, slightly higher than before the deal, per ComScore, even as two of the biggest properties, TV.com and CBS.com, shed unique viewers while they repositioned as video-streaming sites.

“CBS and CNet booked slightly less revenue as combined companies than they did apart, $133.6 million in first quarter 2009 compared with $142 million the year earlier, pre-acquisition. But, of course, there’s the recession — and they are profitable, earning $8.1 million last quarter, compared with CNet’s $18 million loss in the same period a year ago. That’s hardly a growth story, and digital is still a rounding error in CBS’s $3.2 billion in quarterly revenue, but it’s not bad compared with competitors AOL, whose revenue dropped 23%, and Fox Interactive Media, which lost $89 million.

“Some CBS and former CNet properties have clearly benefited from the combination.”

Read more here.

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