CBS’s Big Bet

C.E.O. Les Moonves announced CBS Corp. is buying CNet Networks Inc., the online news provider for $1.8 billion.

The ability to target CNet’s substantial online audience through its own online outlets was a major motivation for the acquisition, Moonves told reporters during a conference call.

“Our idea is to have our content wherever, whenever you can get it, and adding CNet just makes that happen faster,” said Moonves, according to the Associated Press.

CNet shares, in a freefall for months, soared almost 44 percent after announcement of the deal.

As recently as the end of 2006, CBS vowed it would not make big acquisitions.

“We are not going to spend $1.6 billion on YouTube,” said Quincy Smith, CBS’s interactive chief said in November 2006.

But CBS, desperate shed its image as an old media company, reversed course and bet big in an effort to reach younger consumers.

Moonves says the deal will make CBS one of the top 10 online properties. With the acquisition, CBS will generate $1 billion in new revenue by 2010, Moonves added.

“I suspect that Moonves is showing his boss, Summer Redstone, the executive chairman of both Viacom and CBS, that he has a daring internet strategy in place, and that CBS is not merely what it seems to be: an old media company with a few internet properties on hand to keep up appearances,” said Marketwatch analyst Jon Friedman.

CNet – owner of several internet businesses, including ZDNet, and – is an online maverick. It was the first internet company to go public in the mid-1990s but has struggled this decade as the competition has caught up to it.

Moonves said that, with the deal, he sees the opportunity to distribute CBS news and music through CNet outlets while profiting from CNet’s online advertising operations.

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