CBS buys CNET and attempts to capture the techie market
Yesterday CBS announced that it as agreed to buy CNET for $1.8 billion dollars or $11.50 a share. I heard a number of the stock analysts regard the deal as bad for CBS. They were arguing that CBS should have purchased a YouTube-like company that engages in online video rather than a conglomerate of techie review websites. I disagree. As I was mentioning in my last blog, Microsoft Looks Past Yahoo, I mentioned that the next hot buys for those companies looking to get into the advertising space will be internet content providers. CNET is one of the premiere content providers available on the internet. It has been around for quite sometime and has developed a large loyal base that trust CNET for news and reviews on products.
When CBS buys CNET they aren’t just getting a bunch of unique hits from new users of the site, they are getting a loyal fan base that has used the network of sites for 5-10 years. Content providers provide a medium for online advertising that surpasses the search advertising providers. Search advertisers focus on placement of banner sized ads whereas a content site maintains a visitor for a longer exposure and advertisements can be embedded within the articles or as splash pages. CNET was bought by CBS and more companies in the space are certainly left to be bought.