When an aging TV network acquires one of the oldest independent web media properties, what does it mean? Last week, CBS took a major step to increase its internet presence by acquiring CNet Networks for a $1.8bn (euro1.56 bn). Created in 1992, CNet Networks is of the oldest media property on the internet. It runs a bunch of websites, ranging to news, games and downloads. The Company’s leading brands include CNET, GameSpot, TV.com, MP3.com, Webshots, CHOW, ZDNet and TechRepublic. On the financial side, CNet Networks shows mixed results: a nice revenue base ($406m for 2007) but a low operating margin (4%) (full statement here). For 2008, management expected revenue to grow by 8% to 13%, compared to 10% growth in 2006. Unfortunately, Q1 results were not exactly in line with those prediction: the first three months of 2008 yielded only 3% growth and a loss of $18m for the period. Wall Street made its unhappiness known. Those results prompted CBS to make its move: it offered a premium of 45% over the stock price. This is a strategic move: the TV network expects to triple its size of its Internet operations. Audience wise, CBS is expected to be among the 10 most popular Internet companies in the US. (CNet sites add 32m unique visitors a month to CBS’s 25m UV).

The sale of one of the last independent content site remaining, also emphasizes the intense competition in the sector. Last week, in San Francisco, I happened to spend time with Dan Farber, editor-in-chief of CNet news. Farber has 25 years of experience in journalism. He runs a tight ship of specialized reporters and editors (about 30 for the news operations, 120 for all CNet content-related personnel). In a sense, they compete the old (and good) way : thorough journalism, expertise, persistence, breaking news, and scoops. When we talked about competition, Farber took the example of the gadgets sector — an important segment for the tech crowd. Rather that facing competition from news organization similar to his, Farber has to deal with sites such as Endgadget or Gizmodo. These are run by very small teams and yet get a significant audience. Asked about the notion of “trusted brand”, an important pillar of journalistic presence, he said: “This notion becomes more and more fluid and dynamic”. Basically, audiences are less faithful in this Internet age, and this makes the news gathering process much more challenging. Part of the response, in Farber’s views, is to deliver news on a wider variety of platforms, such as aggregators and social networks. (As we speak, he watches is laptop and sees that the story he ran that morning on his blog was taken by Techmeme, a clever small news machine, part human part tech. “Excellent! This is the guarantee pages views numbers”. OK, he added, you don’t make money on social networks, but they represent an indispensable tool with which to build your brand among a young audience. To him, the last thing to do for a news site is to be shy about dispersing its content in the broadest possible way. This includes allowing deep-linking from others, even for a paid-for website, and being good at Search Engine Optimization (SEO). Like everyone else, CNet is getting 40-45% of its traffic from search engines, mainly Google.

This CBS move is reassuring: true journalism — as long as it adapts to the medium, to its unstable audience and its peculiar competition — remains a valued asset. This also applies — in a much smaller but nevertheless interesting way — to the acquisition of ArsTechnica, an excellent tech news site, by Condé Nast, for a reported $25m. Again, Ars is cleverly crafted news product, mixing original reporting and conversational style. Should the United States not being in a recession, the price would have been much higher.

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