Today was a slow news day, but television titan CBS made the headlines (as opposed to reporting them) when they announced a $1.8 billion buyout of CNET. CNET is corporate parent company of video game sites GameSpot, Game Rankings and GameFaqs, as well as other non-gaming related TV.com, News.com and mp3.com.
Investors were skeptical of the deal. CNET’s stock has been struggling and CBS’ purchase of the company is at a 45 percent premium of what the company is worth. As a result of the news, CNET’s stock jumped 44 percent, while investors dropped CBS stock as its value went down 3.6 percent for the day. Jason Bazinet of Citigroup said that the “pricing risk is high” for CBS.
CBS CEO Les Moonves was more optimistic about the deal. “Our idea is to have our content wherever, whenever you can get it, and adding CNet just makes that happen faster,” Moonves said. CBS hopes to use CNET’s youth oriented sites to draw viewers to its television shows in a way that rival News Corp. (which owns IGN and Fox, among other companies) has been able to do since it purchased both IGN and Myspace.
