Ok, the CNET news we hinted at is starting to roll in. They’ve sold Webshots, a photo sharing site, for $45 million in cash to American Greetings. The reason, says CNET Neil Ashe, is to allow CNET to “focus on key areas of growth.”

Webshots seemed to be growing pretty fast, though. The site attracted 7.2 million visitors in the U.S. in September, up 25 percent from last year.And just a year ago it was considered a key part of CNET’s strategy to become the Viacom of the online space.

Webshots was purchased by CNet from Twofold Photos, Inc. in 2004 for approximately $70 million. If you’d like to hear about the fascinating history of Webshots prior to CNET’s acquisition, listen to the first few minutes of this podcast, where Narendra Rocherolle, one of the founders, tells the story.

Neil Ashe has also sent an email to all CNET employees, where he mentions this and other news. He also says “CNET Networks is not the site-of-the-day. CNET Networks is the media company of the future.” (why does that remind me of the “To Infinity And Beyond!” quote from Toy Story?):

From: Neil Ashe
Sent: Thursday, October 25, 2007 1:47 PM
To: Employees - Global
Subject: Some important announcements

Hi Everybody,

The third quarter marks a turning point for us. After a year on the job, I am confident we are building a company that can succeed in 2008 and beyond. Today, during our Q3 Earnings Call, I will make several major announcements that underscore our progress.

Strategically, we are focused on providing people with brands that make a difference and that help marketers win. Financially, we evaluated our asset mix and are focused on those areas that best fit within our brand portfolio, represent the largest opportunity and where we can be leaders. Operationally, we have a winning team that knows what success is and is committed to achieving it.

Let me provide more detail for you on those announcements.

Sale of Webshots

Today, Webshots was sold to American Greetings for approximately $45 million. This was a tough decision but the right business decision. Selling Webshots allows us to focus our efforts against long term strategic goals, and concentrate on the passion-based categories we believe offer the most promise for CNET Networks.

We are pleased that Webshots can become an important ingredient to American Greetings’ business, and we are committed to making this a successful transition over the next several months.

New Head of the Combined Entertainment and Lifestyle Business Unit

I am pleased to announce Stephen Colvin as EVP of our new Entertainment & Lifestyle business. A 20-year media veteran, Stephen joins us from Dennis Publishing, where he built Maxim, Blender, Stuff and The Week magazines. He has a track record as a dynamic leader and brand builder. Steph en will be based in our NYC office which allows us to expand our presence in a city that is the hub of the media world. Stephen will be spending a lot of time in San Francisco.

The merger of CHOW and Urban Baby into the Entertainment & Lifestyle business unit simplifies our business, and allows us to leverage infrastructure, tools and best practices across this larger group. Over the next few days and weeks there will be individual and team meetings within Entertainment and Lifestyle to discuss the transition process.

Stephen will be in San Francisco next week, and he is looking forward to meeting the team.

Partnership Marketing and Sales

Jack Haire joined us several months ago to evaluate and evolve our sales structure and go-to-market strategy. As a result of his assessment, Jack will be taking on the newly formed role of Chief Client Officer. In his new position, Jack will oversee the Partnership Sales team, chair the revenue council and have responsibility and final decision making for sales best practi ces, infrastructure and policies.

This new sales construct provides the flexibility to tap our best people across the company and align them against our best opportunities for revenue growth. The team will include dedicated centralized resources as well as part time allocation of resources from each BU. More announcements regarding this new team structure will be made in the coming weeks.

Channel Moves into the CNET BU

The joining of Channel and CNET brings together two category leaders. Together, they cover the spectrum of bringing information and services to manufacturers, distributors, retailers and consumers. The two businesses will benefit from a holistic view of tech consumption with the channel and to the consumer.

Steve Parrot will report to Joe Gillespie and continue to manage Channel as a stand alone business within the CNET BU.

Credit Facility

Last week we announced that we secured a $250 million credit facility. A credit facility is a set of loans that allow us to borrow money in order to enhance our ability to grow. Together, with the proceeds from our sale of Webshots, we have the financial resources available to create value for our shareholders.

Q3 Earnings

We reported that revenues for the third quarter were $99.5 million up 7% compared to the same period in 2006. Excluding all exited businesses, including Webshots, from both 2007 and 2006, total revenue increased 11% during the quarter. In addition, CNET networks ‘ global Internet properties reached and average of 141 unique monthly users consuming over 91 million pages per day.

At the beginning of the year, I laid out three initiatives and key areas of focus as part of our long term growth strategy:

First, realize the potential and opportunity of existing brands.

Second, identify new opportunities for growth.

And third, continue to strive to do what we do better.

Today’s announcements directly support our ability to achieve these initi atives and build a vibrant and valuable company that seizes the long term opportunity and creates value for users, employees, marketers and shareholders.

As we exit the third quarter, we have made real progress on our transformation to a new CNET Networks. A bold company that is entrepreneurial and aggressive. CNET Networks is not the site-of-the-day. CNET Networks is the media company of the future.

Best, NA

CNet’s photosharing service Webshots is adding video sharing capabilities today, something that has been expected since at least August when the service underwent a drastic redesign. There’s not a lot of information on the site yet about the new feature, but there is one company blog post with links to tutorial videos. You can see examples of Webshots video here and here.

The company claims its video service will have a 50-percent larger viewing area and nearly 3-times the bitrate of other video sites. As we wrote last month, CNet in general is bleeding traffic and Webshots in particular has seen a 69% drop in third quarter traffic. Adding video to Webshots could be a smart move if Webshots can bring something unique to the market. I’m not sure large play and higher quality is going to speak to users as much as the large community of YouTube or the privacy controls and file integrity of Multiply. Webshots may be suffering, but it’s far from dead yet. In June Hitwise identified Webshots as the 3rd leading photo sharing site online, behind only Photobucket and Yahoo! Photos.

Webshots is also announcing today a new program called Project Spotlight, which it calls an artist grant for scripted, documentary and citizen journalism video on the web. Webshots will begin compiling a best-of show combining the best video and photography on its site. This could prove compelling; see for example all the traction online contest site Bix gained by giving out awards up to $50,000 to users before being acquired by Yahoo! last week. Many independent video bloggers are looking for ways to be compensated for their work.

Hosting for free accounts will be free for the first 100 videos up to 5 minutes in length plus 10 extra videos per month of membership. Webshots Premium members will get up to 250 videos up to 10 minutes in length for free, with 25 additional videos per month of membership.

Photobucket has been particularly successful combining photos and video and I think the potential is there for Webshots to succeed with the combination as well. There’s something about the Webshots approach though that has a “destination site” feel to it though and I think it’s widely acknowledged that embedded, viral media is where the market’s enthusiasm is right now. Webshots needs to offer smaller versions of its players if it expects people to embed videos it’s hosting. Combine this with the mass exodus from Webshots and today’s announcement may prove interesting only when we compare features across major media sharing sites.

CNET sure has been busy fixing up its community sites lately. In addition to recent updates to Consumating, Webshots, and Chow, the launch of AllYouCanUpload and the acquisition of UrbanBaby, CNET relaunched popular Tech news and community site TechRepublic today.

A key addition to TechRepublic is the use of tags to categorize all content on the site, including user generated content found in the discussion forums. Users are also able to create a personal space on the site, bookmark friends, etc. It’s a sort of MySpace for tech geeks.

Most of these sites fall under Martin Green, GM of CNET’s Community Group, who’s been leading a hard charge to bring CNET’s various community sites up to new standards set by Flickr, del.icio.us and other successful “web 2.0″ sites. TechRepublic is led by CNET VP Stephen Howard-Sarin.

CNET owned Webshots, a massive property with 420 million photos, relaunched moments ago with a new interface and a number of feature changes.

The most notable changes are to the limits on photo uploading. Free accounts are now able to upload 1,000 photos plus an additional 100 photos per month (the additional photos are applied retroactively and continue to accrue even if not used). Premium accounts, which are $30 per year, allow for 5,000 initial photos plus 500 more per month. Photos are archived at original resolution, and resized for presentation on the site only if larger than 2400×2400.

In another notable move, Webshots will be allowing users to upload video to their webshots accounts starting in September. Video will be transcoded into Flash video for viewing on the website. Our long-time opinion has been that photo sharing sites needed video as well, to allow people to store vacation and other photos and videos in a single location. Look for this feature eventually on Flickr as well.

Our previous coverge of Webshots is here.

There won’t be tagging, but CNet’s photosharing site Webshots is adding a number of features reminiscent of Flickr and getting a whole new look. The relaunch will occur some time in late August, but an alpha site is up here. The site currently looks straight out of the 90’s, it will be interesting to see how established users react to the redesign.

The Webshots team told Premium users in an email today that at relaunch Webshots users will be able to comment on each other’s photos. Premium users will have their accounts increased from 5,000 images total, with the limit being bumped up 500 images each month in the future future. Photo quality will be improved, information about the type of camera used for each photo will be included and advertising space will be decreased. Users will also be able to see aggregate stats and comments on their personal Webshots pages.

We last wrote about Webshots when they launched AllYouCanUpload, a bare bones service that has no limits or other frictions on photo uploading. A month prior, the company initiated its College Live section - a social networking feature for college students.

Webshots was purchased by CNet from Twofold Photos, Inc. in 2004 for approximately $70 million dollars. Webshots has approximately 19 million registered users posting almost a million images a day in online photo albums. A total of 400 million photos have been uploaded to date (compare to Flickr, a much younger service, with about 200 million photos). For comparison, Yahoo! Photos is reported to have 30 million users, Photobucket reports having 19 million users and Flickr approximately 2.5 million. It’s clear who’s the trendsetter here, though, and that’s liable to continue with innovations like Flickr’s rumored drag and drop geotagging in the works.

CNET very quietly launched a simple new photo uploading site called AllYouCanUpload last week. At first glance it doesn’t appear to be very special or disruptive. But it is.

By launching AllYouCanUpload, CNET just pulled the rug out from under at least two startups (photobucket and imageshack) that focus on providing image hosting for users who want to display those images on other websites, like Myspace, eBay and others. This is a big business - a lot of traffic flows through photobucket today, and it is a profitable and well funded company.

AllYouCanUpload is a site that makes uploading photos as easy as it can possibly get. They’ve removed all of the friction. You do not need to register for an account. You just use the uploading tool and you are shown the image along with codes to post the photo on sites like Myspace, ebay and others (I’d also like an option to have the image links emailed to me). Unlike Photobucket and Imageshack, AllYouCanUpload is completely free, and no advertisements appear on the uploading areas of the site (there are ads on the hosted part of the site, which you see if you click on a hosted image). There is no limit to the number of photos that can be uploaded or the total amount of storage that may be consumed. There is no limit on the size of an image, and images are not resized unless you request it. And possibly most importantly, there are absolutely no bandwidth restraints.

This last point is important. With other services there are caps on bandwidth. That means if a photo is particularly popular and is viewed a lot, the user account will be shut down after a cap is reached. That won’t happen with AllYouCanUpload.

This is not a destination site - if you lose or forget the URL for your photos you will have to re-upload them because there is no search feature or user account. CNET suggests you go to Webshots, their main photo site, if you want those destination site features. But for users of Myspace and other social networking sites that just want a place to store photos, AllYouCanUpload is a seriously cool site. If it gets traction (and it will, even if it didn’t have CNET behind it), it will force PhotoBucket and Imageshack to rethink their offerings. And that is great for consumers.

See Martin Green’s blog (CNET’s GM of the Communities Group) for an in depth discussion of the product, including CNET’s new back end storage solution called “Haystack”.

A final note: we are seeing more and more new web applications that keep piling on new features to the point where it’s nearly impossible to understand what they are doing. When I see something like this - a service that strives to do one thing efficiently and without friction, it makes my heart warm. Simple does not equal boring. Simple can be disruptive. I want more services like AllYouCanUpload.

Webshots, a photo publishing and sharing service which was acquired by CNET in August 2004, is starting to launch social networking features to compete with the more cutting edge photo services like Flickr. Last month they launched the social networking features. Later today they will launch a new service called “College Live”, which targets the 30 million or so U.S. young adults between 18-25 years.

College live is a network of college specific Webshots sites that focus on photos from students at that college, and event planning. It’s for students only, and Webshots is using the same method as Facebook to try and keep a sense of exclusivity - by requiring the use of a .edu email address. The idea is to create a sense of community around those photos and events, and allow students to get to know eachother. It targets the same audience as Facebook, but offers different features. And while photos uploaded to a specific college site will be grouped there, the individual pictures will also be available on Webshots as well.

A screenshot of a college landing page is below. Additional screen shots (as well as a couple of pictures I took during my briefing) are here.

Webshots is a very large property, with about 40 million total users and 300 million photos. CNET as a whole, by the way, is still growing at a healthy rate - they had an average of 116 million unique monthly visitors in Q4 last year, which was up 13% from the same period in 2004. Average daily page views increased to 103 million, up 22 % from 2004. CNET says they want to be the Viacom of the online space with a number of standalone properties addressing different market. Along with Webshots, recent acquisitions of dating site Consumating and food site Chowhound show this strategy in action. Webshots is another (very large) property helping them achieve this goal.

Note: If you’d like to hear about the fascinating history of Webshots prior to CNET’s acquisition, listen to the first few minutes of this podcast, where Narendra Rocherolle, one of the founders, tells the story.