CBS agrees to acquire online news site CNet for $1.8Bn

CBS Corp., an American media conglomerate focused on broadcasting and television production, announced Thursday that it will acquire CNet Networks Inc., a pioneering online provider of technology news and product reviews, for $1.8 billion cash, in a move that will help the TV broadcasting giant become one of the 10 largest Web site companies.

The U.S. television network CBS said it would pay $11.50 a share to Cnet investors, which represents a huge premium of 45 percent over CNet's closing share price on May 14, the day before CBS announced its takeover bid.

CBS said its acquisition of San Francisco-based CNet would strengthen its position in new advertising markets and will boost its profile on the Internet. Besides expanding its advertising reach, the New York-based CBS hopes the combination will put it among the ten most popular Internet companies with 54 million monthly visitors.

"CNet Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience," Leslie Moonves, chief executive of CBS, said in a statement. "Together, CBS and CNet Networks will have significant additional exposure to the fastest-growing advertising sector and can accelerate our growth through a number of new content, promotion and advertising initiatives."

Upon closing, CBS will combine its existing Internet unit, which oversees CBS.com, CBSSports.com, MaxPreps.com, CBSNews.com, last.fm, Wallstrip and MobLogic, with CNet Networks' several popular Web sites, including CNET, ZDNet, News.com, video gaming site GameSpot.com, TV.com, Chow and Search.com.

Founded in 1992 by Shelby Bonnie and Halsey Minor, CNet is a site widely known for technology reviews and news. The company gradually has expanded itself through acquisitions and alliances and has become a multimedia technology and e-commerce information source.

For the last few months, CNet has been locked in a battle with its biggest investor, the hedge fund Jana Partners LLC, over the direction of the company. Jana Partners, which obtained a 10% stake in CNet's voting stock, has been pushing management for action to raise CNet's stock price. The fund along with the other firms including Spark Capital and Sandell Asset Management Corp. has been pushing for greater control of the company.

The deal is expected to close in the third quarter following shareholder and regulatory approval.

CNet investors reacted to the deal by sending the company's shares up $3.46, or 43.5 percent, to $11.41, while CBS shareholders were less optimistic and pushed company's shares down 59 cents, or 2.4 percent, to $24.23.