CBS, the US broadcasting giant that bought Last.fm last year, has done it again - this time buying online publisher CNET for $1.8bn. This one took everyone by surprise.
The deal rescues CNET from an impending boardroom scuffle; frustrated investors at Jana Partners were reportedly preparing to nominate their own, replacement directors to the company board after airing their concerns about poor performance and management. In April, CNET announced 120 job cuts in the US in response.
On the down side - it means the biggest web-only publisher in the UK is now owned by a US firm. This deal dwarfs the $280m deal for Last.fm.
Overall, this was well received. Om Malik on GigaOM said: "I like the big, bold bet. Hell, with $405 million in sales and $176 million in profits, CNet seems a whole heck of a lot cheaper than Last.fm, which cost CBS $280 million.
"Taken at face value, it might seem as a crazy deal, but in fact it's a calculated, smart and well thought-out move."
Saul Hansell at the New York Times was less enthusiastic: "I suspect that the real reason that CBS is buying CNet now is that it fits. CBS has a market capitalization of $16 billion. So a $2 billion acquisition is big enough to make a difference and not so big as to break the bank. CBS said, in fact, that it can pay for CNet with cash it has on hand.
"CBS estimates an internal rate of return on the investment of 13 percent. That's not hitting the ball out of the park. But it's not buying a lottery ticket either, as Digg or Facebook would be -- those fast-growing but tiny businesses have unproven financial models.
"So the deal probably makes sense for CBS. But it remains to be seen whether mating two turtles will breed a rabbit."
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