January 7, 2008

Is Time Running Out For CNET And Its 2,600 Employees?

Michael Arrington

31 comments »

cnet.pngThe New York Times is reporting that a group of investors has gathered a 21% stake in CNET and is trying to take over the board of directors and seriously shake things up. This comes after years of poor stock performance, including a 19% decline over the last three years as other Internet companies have soared.

The consortium, which consists of Sandell Asset Management, Spark Capital, and entrepreneur Paul Gardi, sent a letter to the CNET board of directors two weeks ago (it has not yet been published). The proposal was rejected by CNET, and a number of anti-takeover provisions are hampering the efforts of the consortium to get control of the board.

Just a little over two months ago CNET CEO Neil Ashe said all was well at the company. The problem is that the markets don’t seem to agree. The NYT article mentions that only two of the 18 analysts that follow CNET recommend a buy on the stock.

We recently noted that CNET traffic has slumped, particularly when compared to large gains made by the NYT and others. The New York Times mentions this as well, and compares CNET News.com traffic to TechCrunch:

The company, founded in 1992, has more than 2,600 employees. It has been particularly hard hit because of increased competition in its core market from technology-focused blogs like TechCrunch, written by a handful of people at a fraction of the cost. In September, page views at TechCrunch surpassed those at CNet’s News.com, long considered the industry stalwart. In October, TechCrunch and its sister site had eight million page views compared with News.com’s six million page views, according to comScore Media Metrix.

CNET is currently worth $1.3 billion, but many people (including me) argue that the value of the parts is greater than that, and have recommended that the company sell off more assets for cash. Last quarter, CNET lost $16.65 million on $99.5 million in revenue.

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Trackbacks/Pings (Trackback URL)

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  4. CNET Board Has “Tense, Uncomfortable” Meeting With Jana Corsortium
  5. CNET Soap Opera Continues; CEO Neil Ashe May Be Fighting For His Job
  6. Jana Consortium: CNET leadership “presided over massive value destruction”

Comments

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  1. Miguel Carrasco

    Hi Michael! Busy night for you. I think CNET’s days are numbered. At least in its current forms. I never visit any news site anymore at all. I mostly read blogs, and use the blogs to filter my news. This way, I know I am getting relevant information, and can comment on stories (like today when I had way to much Starbucks too late).

    I think your title is perfect for this article. The future is Blogs. Sites like TechCrunch will continue to evolve, and shape a whole new world. Even with Blogs, we haven’t seen anything yet!

  2. JohnofScribbleSheet

    I used to be a big reader of CNET but now its slow and boring. They have stopped involving. Their like a newspaper. Shame really.

  3. blog about everything

    I agree completely with you, Michael (and Miguel)!
    CNET will always remain somewhat popular if they keep on going, but things are getting worse for them and they probably need to update their website’s style (more blog-y etc).

    Just my 2 cents,
    Dom

  4. Steven

    If they do get taken over, I wonder if they would sell some of their uber cool domain names. They got some of the best in the industry.

  5. Johnny

    Well what do the new guys want to change?
    I havent checked out cnet for ages.
    I always though it to messy for me.

    Yeah they do get some great domain names.

  6. Chris Blackwell

    I agree that CNET has a large hidden value and I truly trust the reviews coming out from them. I can see how investors would be worried as CNET is facing very large competition from others (TechCrunch of course) but CNET has a long-term relationship built up with many millions that no other company can stake claim to. I still see a bright future for CNET, but maybe not as large as they once were.

  7. Poker Sharks

    I think a lot of industry media will be dying off the more blogs and social networking sites plug the holes and grow into coorporations themselves.

    To be honest it could be something for TectCrunch to watch out for - getting too big can be your downfall. Keeping it small and personal is where the readers came from and thats where it needs to stay.

    CNET just hasnt innovated enough to keep up with the times and have lost visitors left right and centre. They need to let their writers loosen up and have some freedom and cause some contraversy, that will get some readers back. Slamming TechCrunch could be a good start ;-).

  8. Jon Henshaw

    I was actually surprised to read this, because I’ve noticed an improvement in their reporting lately. Or at the very least, I keep stumbling upon their content like I never have before, and I’m liking what I’m reading, especially with several of their professional blogs.

    And I agree with Steven, they have some awesome domains. I just wish they would do more things with them.

  9. Mike

    Have to agree that I used tor ead CNET news every day but over the years it has started to just reprint what other sites print.

    I want fresh , informative stuff before other sites have it. TC seems to be the only one even trying to provide it.

    ———–
    http://www.xenbet.com

  10. Todd

    I wonder if the whole Jeff Gerstmann scandal hurt them. I know I’ve tried to completely avoid Gamespot or any other CNet site since. The downward trend was happening long before, but I’m sure it had an impact, even if its minor.

  11. Chris

    CNET doesn’t really need to do that much to grow their traffic dramatically and regain a good competitive position.

    CNET needs to learn to embrace online communities, social networking and web 2.0.

    Right now, CNET has a ton of information and content and great domains, but they have no real features to bring people together. Those features are the ones that can drive huge amounts of traffic and keep users constantly coming back.

    CNET should start making some acquisitions that actually make sense and build their community and social newtorking offering, instead of buying content sites. They have enough content. It’s time to start getting users engaged.

  12. glanglois

    Although CNET is dull, I’ll continue to read it for careful reviews and hard news.

    When TechCrunch begins to write routinely in clear, understandable English, I’ll use it for its op-ed value. As it is now, I’m just tired of having to wade through sentences and paragraphs so poorly constructed I have to read them twice to puzzle out the meaning. This pub (and its audience) have grown entirely too big for its “whatever, dude!”, LiveJournal writing style.

    It isn’t a matter of silly grammar rules. It’s a matter of attention to quality in general and the accuracy of communication in particular. Both are lacking here.

    I’m back to CNET for now. YMMV. And probably does.

    GJL

  13. Mr. Recycle

    I don’t think the Gerstman firing has hurt them, but it is a very strong indicator of bad management. More of a symptom than the cause.

  14. Alan Wilensky

    The problem with CNET is not that it is too big, it is that its coverage has become flippant, happy talk, inconsequential, and shallow.

    If CNET wants a serious readership, let them get back to real technology journalism, with real testing, and real stories; not the current babble over ten this or that this vs. that, and attempts to be funny.

  15. SAM

    I agree with Alan.

    CNET needs to lose fat, focus on detailed product evaluations and expand on the community content,

    I also found the comparison with TechCrunch to be amusing and clearly an lame attempt to pump up market value.

  16. What a joke

    “It has been particularly hard hit because of increased competition in its core market from technology-focused blogs like TechCrunch,”

    Apples and Oranges. TechCrunch has become more of a Perez Hilton meets TMZ for tech gossip.

  17. Search Engines Web

    ______________________________________________________

    Would you please make your traffic stats public? :-?

    Is it really in good taste to predict the demise of companies and use examples like the one used, but yet HIDE your own traffic stats.

    For years TechCrunch made them public, in the spirit of Web 2.0.
    seoptimization.blog.com/1221628/

    Additionally, can you release screenshots of the 2007 stats, including:

    * Search engine referrers
    * Social site referrers
    * Keyword/ search terms
    * Average time spent
    * Geographic Demgraphics
    * Unique visitors

    We recently noted that CNET traffic has slumped, particularly when compared to large gains made by the NYT and others. The New York Times mentions this as well, and compares CNET News.com traffic to TechCrunch:

    The company, founded in 1992, has more than 2,600 employees. It has been particularly hard hit because of increased competition in its core market from technology-focused blogs like TechCrunch, written by a handful of people at a fraction of the cost. In September, page views at TechCrunch surpassed those at CNet’s News.com, long considered the industry stalwart. In October, TechCrunch and its sister site had eight million page views compared with News.com’s six million page views, according to comScore Media Metrix.

  18. Michael

    How come TechCrunch is a competitor to CNET? Just because it is a web site too? CNET is still the only true source of technology news. Not local Silicon Valley gossip, but real, broad coverage of everything and everyone technology related.

    Perhaps they should call themselves “blog”, so idiots who claim “I don’t read news anymore, I switched to blogs” can be brought back in.

  19. Ex-journalist

    I still would trust reporting I read on News.com over the TechCrunch gossip, un-researched ove-renthusiasm/bashing and self-promotion.

  20. George Michael

    I used to use CNET a lot, now only use them when I need to buy a new camera, computer etc. so my use is somewhat on-demand.

    I still trust their News and Reviews to be the industry standard — there are tons and tons and TONS of blogs trying to be the new and best tech source, but many like TC, have become a stomping grounds for flaming whoever is bigger it seems. Akin to those that hate on everyone, to try and get to the top (flashbacks of high school come to mind).

    I also like their blogs, which are professionally published and full of great content. I also like how they acknowledge reputable, true, tech blogs like Engadget (Ryan Block used to come on the show back in the James Kim days, RIP). I like reading TC as well, but it seems that they don’t associate with TC for good reason — there’s no unbiased, non-self-promoting content here. It’s almost as bad as Valleywag.

    CNET realized that passionate users come to find out about tech, and they developed a strategy to target all passionate users in different realms like video games, television, food, and business tech. I agree that the future is moving away from general portals like Yahoo, and toward target content, but blogs will always supplement and never replace reputable news sources.

  21. CNET - Blodget

    CNET should sell out to Henry Blodget
    The Wall Street pariah recently launched a whimsical offer for the $1.3bn internet publisher on his blog. Now four investors have followed suit by amassing a stake with intent to flip the board. As jokey as it sounds, Blodget’s onto something: CNET needs a Web 2.0 makeover.
    http://breakingviews.com/frees.....o0CQ2pmenJ

  22. Ed

    Today is the first day I’ve ever seen this TechCrunch site in response to today’s news. You can’t compare TC to CNET. I highly doubt the “days are numbered for CNET” although it is a clever title.

    What I will say is I’ll never visit TC again because it offers very little information and I don’t care for blogs. Blogging is like standing in the middle of Times Square and shouting out loud… nobody cares.

    In my opinion, which nobody cares about, forums and blogs are hurting the Internet. I try and search for helpful information and I end up on some stupid forum with some knucklehead sharing his stupidity. This is why wikipedia works so well. It’s not a blog where people argue against each other, rather they keep the topic in check and try to make it as accurate as possible.

  23. Coupons

    Most of the times I search for a solution to a problem, I found the answer in a blog or forum.
    I usually read the hardware video reviews that CNet has. There should be more though…

  24. Evangelist

    Atleast half the stories i see on Techcrunch are ones I have read on other blogs. So TC has still a away to go in terms of breaking stories. There are other less popular blogs also which break stories.

  25. Michael Murdock

    Not sure if anyone else is turned off by this, but CNET? GRAB YOUR IDENTITY BACK! First thing you greet your visitors with is an AD for intel? Okay, someone fire the board, fire the CEO and give me his job. It would take me a week to turn that website with my design team into something much more grabbing for the public to come back to.

    Focus on something you’re good at and don’t be all things to everybody. You can’t. That’s called YAHOO and that’s in trouble as well. Take a lesson, learn from it and when you want someone to run the place. Give Dvorak a call and tell him to call me.

    In less than 12 months this company will be in the BLACK.

    Michael Murdock, CEO
    DocMurdock