We are happy to see the market has responded so favourably to our offer for CNET. When we first announced our offer, back on December 19, CNET’s stock was trading at about $7.75. Now, despite yet another exasperated brokerage firm having thrown in the towel, the stock is up more than 15%! We are pleased to have already added so much value.
We have not yet heard from CNET’s management about our offer, but we did hear from a third-party that it was being “considered.” That’s great news! We look forward to continuing the dialog.
In the meantime, we are pleased to outline the first part of our CNET Restructuring Plan, which is designed to rescue shareholders from their 10-year exile in dead-money land. In the coming weeks, we will outline the second part of the plan, which involves specific cost reductions and management changes.
After that summary, however, we regret to say that we will be keeping the rest of the plan to ourselves. It’s a tough and time-consuming job, figuring out how to save CNET, and while we feel terribly for CNET’s shareholders, we’re not in the business of providing detailed turnaround plans for free (McKinsey & Co. and Lazard Freres would charge millions for this sort of thing, and we frankly don’t have dozens of eager i-banking minions running around to spew out beautiful 250-page reports).
Our CNET Restructuring Plan, Part 1
CNET’s problem can be expressed very simply: It is trying–and failing–to be all things to all people. To see this, you need look no farther than CNET’s financial filings, where it describes itself:
CNET Networks, Inc., or CNET Networks, is an interactive media company that builds brands for people and the things they are passionate about, such as technology, entertainment, business, food and parenting.
“CNET builds brands for people and the things they are passionate about, such as technology, entertainment, business, food, and parenting.” That may be what CNET wants to believe it does, but that’s why it’s stock and business have gone nowhere. CNET needs to be refocused–desperately.
What should CNET focus on? T-E-C-H-N-O-L-O-G-Y.
The CNET brand has nothing to do with “food” and “parenting.” It has everything to do with technology-related stuff: gadgets, gaming, news, reviews, business, etc. (Or at least it did, until CNET management decided to become the next Conde Nast, diluted the brand, and opened the door for TechCrunch, Silicon Alley Insider, et al).
So the first order of business in our CNET Restructuring Plan is to radically re-focus the company. Any property that doesn’t support the CNET = TECHNOLOGY branding will be immediately sold, or, if necessary, folded. Companies like Scripps and Hearst are desperate for interactive properties focused on “food,” “parenting,” et al, and our investment bankers will immediately begin discussions with them.
What does this mean, specifically? It means BNET, CHOW, and UrbanBaby are history. (But don’t fear for the fate of those tens of millions of obsessed BNET, CHOW, and UrbanBaby fans–we expect the sites will continue to be operated by their new parents).
Meanwhile, back at the CNET ranch, we will still have some work to do. Specifically, we will have to resurrect the current CNET technology brand from its geriatric state and infuse it with vigor, dynamism, and cutting-edgeness again. (Yes, we know, this is a tall order, but we’re up to the challenge).
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