For CBS Online – Les is More

CBS CEO Les Moonves took out his checkbook last week and agreed to pay $1.8 billion in cash for

CBS is a TV and radio company but increasingly you can see how Moonves is not going to be left behind the way Tom Freston was when he disappointed their boss – Sumner Redstone – leading to his dismissal.

CNET has 160 million users across many sites including Game- Spot,,, ZDNet,, UrbanBaby,, MySimon, and TechRepublic.

Put that with 40 million users on its current holdings like, Last.FM and and you can easily see that CBS is going after eyeballs and advertising.

Moonves didn’t exactly sit back. CBS is paying a 45 percent premium to CNET shareholders above the $7.95 closing price when the deal was announced.

Because of the Internet the acquisition also gives CBS a foothold in China. Some think that CNET revenues could grow ten percent or more in 2008.

This is a smart move because to get a bigger footprint you have to acquire. There simply is not enough time to do start-ups.

The one area of caution, I think, is not to expect a great effect from synergies with other CBS companies. Some crossovers are expected but it is going to be hard to merge traditional media with new media going forward.

One reason is that the next generation doesn’t really want traditional media delivered by Internet. They want content created for new media. That is, while traditional thinking has it that streaming 24/7 stations online will be the next step for old guard companies, the next generation seems to defy this wisdom.

Gen Y has a shorter attention span.

They like to start, stop, delete and most importantly time delay their listening experience. They seem ripe for podcasting rather than broadcasting although royalty issues hold podcasting back from its true potential.

The CBS acquisition will work best if it is not tied to synergies with its other traditional content companies. This may sound strange but trying to fit a square peg into a round hole could make the CNET acquisition look less attractive or accretive in the years ahead.

CBS is wise to get into the online future.

It is a hedge on a space they and other traditional broadcast companies have long ignored.

What’s still left is innovating new content for new media created by its traditional media division. This takes time and vision not to mention corporate commitment. But it is out there waiting for its day.

The CNET deal and the Last.FM acquisition before that buys CBS time to become a start-up company in what I think is going to be a very important space.

I say start-up company because no one is doing what I envision. Some broadcast company is going to have to do it.

It could very well be CBS.

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