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Why CBS Bought CNET, Rather Than Vice Versa

by: Michael Arrington posted on: May 15, 2008 | about stocks: CBS / CNET

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Why CBS bought CNET, and not the other way around:

1999: CNET is a $12 billion company
January 2000: CNET Acquires MySimon for $700 million
October 2000: CNET Acquires Ziff Davis (ZDNet) for $1.6 billion (after the March 2000 stock crash)
July 2004: CNET Acquires Webshots for $70 million
October 2007: CNET Sells Webshots for $40 million
May 2008: CBS Acquires CNET For $1.8 billion

CNET (CNET) announced its sale to CBS (CBS), a $16.5 billion company, today for $1.8 billion. In late 1999, though, CNET was a $12 billion company. They subsequently acquired MySimon for $700 million and ZDNet for $1.6 billion, and it’s been all downhill for CNET’s market cap since then.

So why didn’t CNET continue to grow and ultimately take over a media dinosaur like CBS, instead of the other way around? Perhaps it was because they did deals like buying Webshots for $70 million and then a couple of years later selling Webshots for $40 million. Or perhaps it was because they failed to realize the importance of blogs until 2007. Whatever the cause, or causes, CNET failed to disrupt the old guard, and will find itself to be a footnote in Internet history rather than the headline it should have been.

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