How to Save CNET: Private Equity + Shelby Bonnie


CNET is geriatric.  Seven years ago, with Shelby Bonnie at the helm, the company ruled the tech news-and-community roost, and its stock touched $80.  Now, a year after Shelby was forced to resign in the wake of a stock-option back-dating scandal, the company’s growth has stalled, its tech-news dominance has been usurped, and its stock is barely clinging to $8.

Well, it’s time to take the company private.  And bring back Shelby Bonnie.  And there’s no better firm to make this happen than New York’s Quadrangle.

Quadrangle recently hired ex-Yahoo president Dan Rosensweig as a partner in Silicon Valley.  Before joining Yahoo, Dan ran ZDnet, which was eventually bought by CNET.  Dan knows Shelby, he knows CNET, and he knows how the game is played.  Shelby, meanwhile, remains CNET’s largest individual shareholder, with more than 5% of the equity.  Dan and Shelby should take CNET private, fix it, and then sell the remodeled version to Yahoo.

Think CNET is beyond saving?  Recall what private-equity firm Hellman & Friedman recently did with DoubleClick.  For years, DoubleClick couldn’t give itself away.  When HF finally bought it, it picked it up for the firesale price of $1 billion.  Then it:

  • Sold some divisions
  • Cut some costs
  • Added some debt
  • Waited a year
  • and…flipped the new and improved version to Google for $3 billion.

CNET’s not beyond saving.  It still has great brands, great talent, and good cash flow.  But if it doesn’t take major steps to retool itself now, it’s simply going to rot away.  So it’s time to bring in Quadrangle and Shelby.