BREAKING: CBS Acquiring CNET For $1.8 Billion; 44.6 Percent Premium
CBS (NYSE: CBS) is acquiring CNET (NSDQ: CNET) for $1.8 billion in cash. The purchase price comes to $11.50 per share, representing a 44.6 percent premium over last night's closing price of $7.95.
Context & Ripple Effects
CBS had been building its digital distribution base through a CBS Interactive Audience Network and a digital agreement with affiliates. Its 2007 purchase of Wallstrip also showed an appetite for web-native programming rather than relying only on broadcast extensions.
CNET adds an established technology-media operation to that push, giving CBS a much larger online property at a price that signals the strategic value CBS places on interactive audiences.
First-order effects
- CBS takes control of CNET in a $1.8 billion cash transaction, while CNET shareholders receive $11.50 per share—a 44.6% premium to the prior closing price.
- CBS gains CNET's technology-focused media operation alongside its existing interactive network and web-video holdings.
Second-order effects
- CBS can offer affiliates and advertisers a broader digital portfolio spanning its own programming, web-native video and CNET's technology coverage, increasing pressure on other media groups to assemble comparable online reach.
- CNET's standalone strategic options narrow as its editorial and commercial operations become part of CBS's interactive business priorities.
Third-order effects
- The deal points to broadcast groups treating established online publishers as acquisition targets for audience scale and digital advertising inventory, rather than building every web property internally.
- If similar deals persist, independent web-media brands will increasingly be valued for how well they fit larger distributors' advertising and cross-promotion systems.
The trend: Legacy media companies are using acquisitions to build interactive audience networks from established online brands and web-native programming.