CBS President & CEO Leslie Moonves paid a visit to CNET headquarters in San Francisco today, we’re hearing.
He came alone. No Quincy Smith, No Michael Marquez (the guys who did the deal). No entourage of any kind. The goal? Address the troops (all of CNET, in person and via a webcast) and let everyone know how this $1.8 billion merger is going to play out.
The main message: CNET is now the cornerstone (or one of the cornerstones of CBS’ online strategy. Neil Ashe, CNET’s CEO, will report to Smith, and CBS Interactive’s various properties (such as Last.fm, CBSSports.com, etc.) will all become one big family, moving traffic and leveraging “deep relationships with big advertisers (auto, pharma, tech, etc.).” Expect lots of interaction points between the the TV and online properties.
Will they succeed in their grand integration plan? First they have to close the merger, which isn’t a done deal. This was a hurried negotiaton, in reaction to the looming threat from a activist shareholder group, led by Jana Partners, with ambitious goals of overhauling the company.
CNET signed a confidentiality agreement with CBS on May 7, according to the merger agreement (Section 8.02(c)), just one week before the deal was announced. CNET’s investment bank, Morgan Stanley, certainly didn’t shop the deal much to other likely buyers before CNET signed.
Other bidders may still come to the table. And if they bid more, CNET has to pay a relatively paltry $35 million breakup fee (good analysis of this here). Perhaps now that CNET is engaged, other suitors (see Microsoft) may suddenly find it a lot more attractive than it was a couple of months ago.
Still, all signs are positive for CNET right now. The merger price, which works out to $11.50/share, is, coincidentally, $.50/share more than Jana Partners said they could expect to get for the company by 2009. So the only question left is, does anyone want CNET more than CBS does?
After letting MarketWatch slide out of its hands, CBS shows every sign of making a serious go at building its internet assets and ad reach. Outside of the dealmakers, it would be interesting to know what kind of involvement Sumner Redstone had in making this happen.
Hi,
Who got a better deal: Newscorp. buying Intermix or CBS buying CNet, and why has CNET got away with not building the multiple assets under its hood?
Combining the depth of editorial content across CBS and CNet with the technology behind Last.fm and the potential of unified data (2-way with soc.net’s) could Quincy Smith end up building the largest media company on the Interweb of the media majors?
Kind regards,
MN
CNET should really re-consider this deal. They have so many untapped resources (undeveloped) that they would be much better breaking off a few assets (IE: Domain portfolio) and either spin off into a new unit or sell it to a handful of players. The domain portfolio alone is leaving $300M on the table if not more.
If Jana Partners figures out how much money they’re loosing out on it will be an even bigger fight.
CBS isn’t buying them for their undeveloped domain properties. Yes most of them are parked and generating revenue but it’s a paltry amount and hardly effects this deal. Sure CBS is paying a premium and in cash but it’s like going to a garage sale and stuffing a Monet under the seat cushions of a couch.
I really hope this was a slick way for them to generate some froth and make the big three move quickly to get their higher offers in. Quincy hinted at CBS developing some of the untapped resources. But we all know how long slow moving giants can take in development.
Sorry, not to “strike a weak pony” but when a company can come along and buy a domain for $10M and within two years become the market leader and file a $100M IPO (IE:CreditCards.com) all off of the strength of a domain name, one might want to be more careful with hasty decisions regarding their category killing domains.
What in the attitudes and market climate makes this any different from the Time Warner / AOL disaster in the last boom? If anyone that analyzed that deal can help lay out some comparisons to this new deal, please do so. At the high level, it seems like another attempt for old media (print or TV) to buy “new” media. But CNET ’s not new or that innovative, and years of acquisitions have supposedly made internal processes / knowledge transfer a mess.
In contrast to both WP’s and Half Empty’s comments, I think this is a fantastic combination and if you’re going to involve Quincy, it should be in a positive way.CBS has been increasing their interactive properties and content rapidly throughout the past year; on top of that, CNET knows the market, the players, the readers, the consumers..because yes, they have been around which is why this makes it even better.
Dear President Moonves,
Your employee David Letterman made disgusting comments about Sarah Palin’s daughter that I know he would not have made about Pres Obama’s child or Bill Clinton’s child. It is terrible that some people-like Letterman-think their political beliefs justify any type behavior. If you allow this “stunt” to go unpunished I will never watch CBS again and urge everyone to do the same and advise your advertizers of my decision.
Sincerely,
Anne Seegers
Ditto to Anne Seegers letter to CBS President Moonves. David Letterman’s program is a disgrace and should be cancelled. His comments after the fact made him and CBS look even worse.
David Letterman should be fired like Don Imus was. I am for protecting our children not dirty old men. He knew what he was saying.
This sex thing will probably help him, considering the fact that it could have not been presented any better than it was, it was truly fantastic.
However if he doesn’t get off of Sarh Palin and stop being so biased against the Republican party, the Letterman Show and CBS, have already and are getting ready to loose audience big time. The vote in the presidential elction was about 50-50 and a lot more people are getting disenchanted with the Democrats.