CBS announced this morning that it would acquire CNET for $1.8 billion. CNET.com is a technology news and information portal but the company also owns several other endemic websites. CBS’ acquisition appears to be synergistic, as CNET’s assets do not overlap substantially with CBS’ media properties. But CNET’s growth has been stagnant at best in recent years and its influence over “technophiles” is waning. So paying a 45% premium for CNET appears a bit “extravagant” for CBS.
Perhaps the deal reflects the urgency of growing bigger and scaling up in the online space on the CBS side. Hot properties like Facebook and Linked-In might be too expensive for CBS, therefore it settled with CNET, hoping to revive the company’s business with new management and strategies. The Internet landscape is changing fast. Just yesterday, ComScore announced that Google has become the most visited website in April for the first time based on the number of unique visitors. Google accomplished this through both innovative new products as well as acquisitions, most notably YouTube. We are going to see more these types of deals in the near future, driven by competitive forces and heavily influenced by Internet advertisers’ media buying patterns.