CNET Sales Rise, Delays Net Income Report

CNet Networks, Inc. reported revenue results today, but delayed earnings report until the previously announced investigation into the backdating of executive stock options is completed. Revenue jumped 14% YoY to $92 million, compared to 80.4 million in revenue for the same period of 2005. Revenue exceeded analysts expectations of $90.4 million, according to a survey tracked by Thomson First Call. CNet attributed the growth to their expanding overseas markets, which now account for 19% of their revenue, compared to 17% the year prior. In China, CNET acquired xcar.com.cn, an online automobile destinations that provides reviews and information for consumers considering car purchases. In Europe, the company launched localized versions of some of its popular U.S. sites.

"We are pleased with the growth of our business during the second quarter," said Shelby Bonnie, chairman and chief executive officer of CNET Networks. "We continued to expand our audience and customer base across the U.S., Europe and Asia by growing our core brands and adding new ones, enhancing our position as Internet ad spending continues to increase."

CNet forecasts revenue of $93 million to $96 million for Q3, and between $386 million and $403 million for the full year. Despite the lack of net earnings results and the potential damage from the on-going investigation, shares rose slightly in after-hours trading following the report.

As I mentioned in my previous post on CNet, I think it is a good time for CNet to be aquired, and I can't think of a better company to benefit from such an acquisition than Yahoo!. Both Yahoo! and CNet have positioned themselves as media companies, and CNET has many assets that Yahoo! needs. Yahoo! already uses CNet for much of the product information in their shopping engine, and needs professional editorial support in other verticals as well. The timing is right with CNet's stock down nearly 45% this year, yet they have growing revenues with a solid balance sheet that includes a cash balance of $143.3 million. What can I say, the synergies and the price are right.