Online media company CNET, Inc. (Nasdaq:CNET) has announced that it will buy privately-held online comparison shopping company mySimon, Inc. for approximately $700 million (US$) in stock.
The San Francisco, California-based CNET said it will issue 11.3 million of its shares to mySimon with an eye toward completing the transaction by the end of the first quarter. Additionally, CNET plans to change its name to CNET Networks to reflect the company’s expansion. CNET’s stock was down $1.75 on volume of about 925,000 shares in mid-day trading on Friday.
Based in Santa Clara, California, mySimon’s Web site offers online comparison shopping for a wide range of products. The deal will allow CNET to instantly expand its content into 250 categories, with thousands of products and more than 2,600 merchants and advertisers.
CNET claimed the marriage will expand its reach to 10 million unique users.
“The unprecedented tide of retailers coming online is threatening to overwhelm consumers, when we should be empowering them,” said Halsey Minor, chairman and CEO of CNET. “We believe the time has come for a single destination devoted to organizing the e-commerce landscape and informing online shoppers in every category, and we are confident that there is no better team to do it than CNET and mySimon.”
Honing E-Commerce Focus
Many industry observers feel that the move underscores CNET’s desire to transform itself into a full-fledged e-commerce player.
CNET’s past attempts to broaden its cyber-presence have not always been successful. CNET’s foray into online portal Snap.com, ended after the company found it difficult to compete with Yahoo! and other rivals.
The company decided to fold Snap.com into broadcast network NBC’s new Internet venture, of which it now owns 14 percent.
NetRatings Likes Deal
According to media researcher NetRatings, Inc., this deal makes good sense.
“Commerce enablers are bound to be one of the Web’s hottest sectors this year,” said Allen Weiner, NetRatings vice president of analytical services. “The marriage of CNET and mySimon comes directly on the heels of the 1999 holiday e-commerce season when we saw the emergence of commerce enablers as important drivers to all sectors of e-commerce.”
Wiener added that mySimon’s phenomenal 146 percent growth in traffic during the holiday season made it a desirable acquisition.
“It’s clearly one of the leaders in this space,” he said. “Its broad vision of the commerce marketplace, combined with CNET’s expansive content channels, will create a powerful force.”