CBS, CNET, Comcast, Plaxo: Internet Geek Envy?

Written by R. Scott Raynovich - Light Reading

Thursday, May 15. 2008 at 11:45 AM EDT 2 comments

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How about them deals? Two deals this morning grab the eye: CBS Corp. (NYSE: CBS) is buying CNET Networks for $1.8B and Comcast Corp. (Nasdaq: CMCSA, CMCSK) is buying Plaxo for $175 million. Both look to be about as awkward as some of the worst dates I had in high school. I think one works and one doesn't.

Picture CBS CEO Les Moonves, the consummate well-coiffed broadcast media operator, meeting with CNET's geeky San Francisco culture. Will CNET now be pitching shows about dotcom moguls refurbishing their private jets? Queer Eye for the Gulfstream, anybody? Will they start talking about the best 1080p flat panels and MP3 player features on Two and a Half Men? Despite its awkwardness, I kind of like it. CNET's stock was bombed out and until recently, the company was profitable. CBS can fix that.

CBS will probably turn CNET operations back to profitability by combining operations, and -- gasp -- layoffs. If CNET can return to the profitability, of, say, 2007, where it earned about $200 million, then this deal was done at less than 10 times 2007 earnings. Not bad. I think this was a number-crunching deal all the way, no matter how much noise Moonves makes about "Internet strategy." You can read about Moonves in an interview at Paidcontent.org this morning.

Then there's Comcast/Plaxo, the oddest of them all. ValleyWag scooped this deal a while ago. Didn't anybody tell Comcast that Plaxo is the Ford Pinto of social networking sites? I still can't quite figure out what this means. Will your Plaxo contacts now be available on channel 99? As if I don't already regret signing up for Plaxo about five years ago, I wonder how much further they can push the annoying Plaxo spam that filters through. Does Comcast owning Plaxo mean that people will soon be trying to "friend" me as I channel surf?

Maybe you can lump both of these deals into the category of "Internet envy," which surprisingly still exists today after so many companies have been burned by large Internet deals. (Does New York Times/About.com ring a bell?) What's really going on here is that CBS and Comcast are itching to get a part of the Internet scene, thinking it's hip. Unfortunately, they are buying properties that were hip about seven years ago.

But then again, nobody can really afford Facebook.

So, the CBS deal is about cheap earnings and eyeballs on flat-panel reviews. The Plaxo deal is about email lists. Neither is about Internet coolness.