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Moonves defends CNET deal, claims CBS an Internet contender

September 26, 2008 |  5:45 pm

CnetDoes flashing some cash turn a geriatric network into an Internet hipster?

Apparently, it does for Leslie Moonves (pictured), chief executive officer of CBS Corp. He told the Internet Advertising Bureau's annual conference that his company's $1.8-billion acquisition of CNET Networks instantly transformed the company into a "major player" in the digital realm.

The deal combined such CNET properties as, and with CBS' other online holdings and catapulted CBS to a Top 10 Internet property, according to ComScore Media Metrics, which measures online audiences.

But if size were all that mattered online, behemoths like Time Warner's AOL -- the fourth-most popular website -- wouldn't be smearing on the lipstick and parading its assets for a sale.

Nor has "traffic" proved the winning formula for the Internet's second-most popular site, Yahoo, notes tech commentator Michael S. Malone, who said the crazy price paid for CNET should send other Internet companies on the hunt for some "East Coast sugar daddy." Jpo8kxncles2_2

"Scale is only half the equation, and arguably the half that doesn't matter," says Scott Ehrlich of DigWorks, a digital media consultancy. "More important is: Do you know how to take advantage of scale?"

Some, including popular venture capital blogger GigaOM's Om Malik, praises Moonves' acquisition as a big, bold bet.

"He's got table stakes now," said Mike McGuire, vice president of media research for Gartner. "The challenge comes in how you deploy and utilize those assets."

It'll take more than a merger-and-acquisition strategy, though, to realize Moonves' dream of turning CBS' scattered online assets into a one-stop shop for news and information. Moonves is already savoring that day, whose advantages would include "taking money away from the newspapers."

Or, he could have added, radio, local and network television: the core of CBS' businesses.

-- Dawn C. Chmielewski

Photo: John Paul Filo / CBS