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CNET losing against takeover forces.

by James Denison / March 13, 2008 3:00 AM PDT

Seems JANA and it's partners may soon have their hand picked directors placed in CNET. This will come very close to completing a hostile takeover. They still need to gain a majority following among all directors but that may happen soon enough. The previous CEO is out and Farber is already in that position. News in the market seems favorably received, the stock price immediately began to recover.
==================================================
ETrade Stock Alert
Thu Mar 13 12:37:28 2008 CNET is "In Play"
Dear J Denison ,

CNET announcs Delaware Court rules in favor of JANA Partners' right to nominate 7 directors for Board of CNET Networks JANA Partners announces that the Delaware Court of Chancery has upheld the rights of an affiliate of JANA to nominate seven directors and propose other business at the 2008 Annual Meeting of Stockholders of CNET Networks (CNET). Following today's rul ... (CNET), (Trade) Read more...
===========================
http://biz.yahoo.com/prnews/080313/nyth072.html?.v=101
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b761299BE-DBBB-4C17-883C-CD274ABE0C7B%7d&siteid=yhoo&dist=yhoo
http://www.reuters.com/article/marketsNews/idUKWNAS475220080313?rpc=44

SAN FRANCISCO, March 13 (Reuters) - Hedge fund JANA Partners LLC, which is trying to take control of the board of CNET Networks Inc's (CNET.O: Quote, Profile, Research) board, said on Thursday a court upheld its right to nominate seven directors to the board of the U.S. online media company.

CNET said in January that the efforts of a group of activist investors led by JANA Partners to nominate two directors to its board and expand the board by five members were "improper" under its bylaws.

JANA took the matter to the Delaware Court of Chancery, challenging CNET's interpretation of its bylaws.
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CNET losing against takeover forces.
by taboma / March 13, 2008 2:33 PM PDT

James,
Nice links. Good info. Thanks,

-Kevin

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CNET does layoffs. Is Lee Koo still there?
by James Denison / March 27, 2008 1:17 AM PDT

I remember how suddenly Philip Dyer who once worked at CNET disappeared. Hopefully Lee will manage to hang onto his job. Maybe we should read that 8K and find out if these forums are targeted or not?
===================================================

CNET S&P REITERATES HOLD RECOMMENDATION ON SHARES OF CNET NETWORKS S&P Marketscope
CNET files an 8-K indicating it has eliminated 120 positions in the U.S., or 4% of its overall workforce. It also describes areas of focus, including pursuit of efficiencies and cost reductions/containment. Activist JANA Partners criticizes the efforts as essentially "too little, too late," and posits that its proposed slate of directors is better equipped to deliver favorable change. JANA and shareholders with which it is aligned own 15% of CNET's voting shares, and an additional 8% non-voting interest. We believe JANA will directly or indirectly help create shareholder value.
==============================
CNET: JANA Partners comments on CNET reorganization; think a better plan is to bring the necessary experience and expertise to CNET's board of directors
Briefing.com - March 27, 2008 9:16 AM ET

Related Quotes
Symbol Last Chg
CNET Trade 6.95 -0.30
Real time quote.

Following an announcement by CNET that it has assembled a "task force" to evaluate fundamental operating issues, JANA Partners Managing Partner Barry Rosenstein issued the following statement: "It is astounding that it has taken years of shareholder value destruction for CNET to even start examining the basics of reversing its ongoing underperformance, and even then only after we began calling for change. Fundamental issues like these that we have raised should have been addressed years ago. Although CNET has belatedly said it will examine these fundamental issues, shareholders should ask themselves whether there is any reason to believe that the current leadership will do so successfully. The current board of directors has presided over an almost 50% stock price decline in the last two years through yesterday, yet they failed to demonstrate any sense of urgency to address these basic issues until publicly called on to do so. CNET's board of directors and much of its senior management team, including its CEO and the head of its "task force", also lack the necessary sector experience and expertise to address these issues and future challenges effectively. We agree that CNET has failed to address these issues historically and that change is needed. Rather than farming out the challenges facing CNET to a "task force" led by its CFO, we think a better plan is to bring the necessary experience and expertise to CNET's board of directors, who can work with management to address these issues decisively and effectively going forward. This is why we have proposed new board members who we believe possess the experience and expertise to bring effective change to CNET and maximize value for all shareholders."

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implementing business unit changes to realign resources to
by James Denison / March 28, 2008 1:25 AM PDT
In reply to: 8K
....implementing business unit changes to realign resources to support the Company?s strategic priorities and promote efficiencies.

That's the 800 pound gorilla in the room right now.

Gone till monday, will check back then.
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Latest message from Lee Koo (March, 23).
by Kees Bakker / March 28, 2008 12:37 AM PDT

FYI, I will be out this entire week and spending some time with my family.

That makes the answer to James' question something like "yes, but no".

Kees

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Lee is still here
by Dango517 / March 28, 2008 1:51 AM PDT
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Let's wait and see what the market says
by Dango517 / March 16, 2008 5:32 PM PDT
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seeking alpha claims 10% reduction in workforce at CNET....
by James Denison / March 27, 2008 1:22 AM PDT

...is coming. Can't be too good for morale right now. This is happening TODAY! By 2pm 1 out of every 10 people there will likely be given their walking papers and told to clear their desks out.
=============================

http://seekingalpha.com/article/70120-cnet-slashes-10-of-workforce-effective-immediately?source=etrade

According to an internal memo from CEO Neil Ashe, the restructure will include stronger emphasis on centralized services in areas like IT architecture, SEO, yield monetization, Facilities, Legal, HR and Communications.

Business Unit Realignment: with the introduction of an open API, ?CNET will move its services, catalog, content management system onto one platform, making content development, syndication and content import easier and more open.? CNET has realigned its investments in TechRepublic and ZDNET ?to improve monetization,? although exactly how and in what form was not specified. TV.com will be abandoning its emphasis on video for more (we presume low cost) content such as ?entertainment features, breaking news, trivia competition, and polls.?

International: CNET is considering raising local capital to expand in China, but the rest of the international business operations appear to be subject to a review with an announcement in weeks, by that we presume that CNET may be closing some international sites.

Restructure costs: $3.5 million and $4 million to be accounted for in Q1, 2008.

More when we have it. Staff being terminated were to be informed at 2pm PST.

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this part jumped out at me.
by James Denison / March 27, 2008 7:14 PM PDT
In reply to: More from seekingalpha
Dan (Farber) was a great choice to help guide CNET into a more aggressive social networking posture.

As I read it I wondered, could it mean greater exposure for the forums?! I then went to the very front page of CNET, http://www.cnet.com

What do I see there? Blogs, lots of blogs. While looking at all the "blogs" I realized I couldn't recall exactly where the term came from although I knew it typically was like someone's daily diary of thoughts on various topics arranged in an alpha-date order. Where did the "b" come from in front of "log"? It's a shortened form of "weblog" which instead of following normal English rules of keeping a first letter or two when added to a word, (such as "radar" from radio array) it keeps the last letter of "web" plus the "log".

So, what is a "blog" exactly and does it qualify as "social networking"? More so than a forum does? Is blogging what is meant by Farber's "social networking posture"? I'm not really sure, but for now, looking at CNET's front page it would seem blogging gets the store front window.

The next question that occurs to me is if there's actual, true, blogging and if there's fake blogging? A typical blog in past was some person who for reasons of his own decided to keep a log of his thoughts which he published on the internet, and I think usually because he didn't have a job where he worked as a reporter and do so. What of those who are now paid to "blog"? Doesn't that put them into the position of not being a blogger, but a paid reporter? I also have to wonder about any editing process involved when a blogger becomes a "paid blogger" aka reporter? If a "boss" can edit your content, does it still constitute a "blog" instead of a "report" by a paid "reporter"? Are we just switching terms? Does a list of one reporter's articles constitute a "blog"? Let's look at a few there on the front page.

Coop's Corner - http://www.news.com/coops-corner/?authorId=108
Charles Cooper has covered technology and business for over 25 years. A graduate of Queens College and Columbia University, Cooper began his career in journalism at the Associated Press before moving to technology coverage. Over the years, he has worked at Computer & Software News, Computer Shopper, PC Week, ZDNet News and now, CNET News.com.

Worker's Edge - http://www.news.com/coops-corner/?authorId=108
Dennis O'Reilly has covered PCs and other technologies in print and online since 1985. Along with more than a decade as editor for Ziff-Davis's Computer Select, Dennis edited PC World's award-winning Here's How section for more than seven years.

Rafe Needleman in Webfare - http://www.webware.com/8300-1_109-2.html?authorId=173
The page is branded CNET from top to bottom so I'd guess he's also a paid reporter, a company man, an employee.

Are paid reporters "bloggers"? Are their reports, "blogs"? Does placing their reports in an alph-date order, in a list of articles actually constitute a "blog"? Or is it just an appropriation of a popular new word or term to apply to a list of articles by a reporter? Does calling something a "blog" thereby make it a "blog" in the purest sense of the word? Maybe. Maybe not, but I suspect the meaning of the term already is changing and probably will continue to do so, and probably become the one used to any reporter's listing of articles published on the web, a paid reporter's "web log".

Now, CNET has another venue where reporters do a story and then there's Talkback about it by the readers. It's like a single thread in a forum, except more than a discussion it seems limited mostly to comments on the article's content instead.

What can be described best as "aggressive social networking" between Talkback, Blogs, or Forums? From what I've seen over the years, the most aggressive social networking is found in Forums, not Blogs or Talkbacks. I suspect that's not what Alpha is refering to.
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Blog defined
by Dango517 / March 27, 2008 8:52 PM PDT
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(NT) I agree. That seems correct assessment.
by James Denison / March 30, 2008 5:50 AM PDT
In reply to: Blog defined
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Dango, Good links?
by taboma / March 27, 2008 4:52 PM PDT

I guess we will watch and see what happens.
CNET has an office in Cambridge, MA. Not sure what they do there at all?

-Kevin

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server
by James Denison / March 27, 2008 7:29 PM PDT
In reply to: Dango, Good links?

Is that where they used to have the server for these forums? Remember, a few years back they physically transferred the equipment, or at least the drives to a new location there in California?

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SERVER
by taboma / March 29, 2008 1:40 PM PDT
In reply to: server

James, Not sure what that the Cambridge CNET office does at all.
245 First St., Cambridge, MA.
High rent district. Still there.
Genetic Research?? WOW! In the middle of the High Tech Medical Research areas in the world. Figure that one out.
Maybe they want to rent their facility to an upcoming mouse developement company?
I still love my one-button mouse. So simple. :

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SERVER NEW
by taboma / March 29, 2008 2:15 PM PDT
In reply to: server

SERVER - New!
by taboma - 3/29/08 8:40 PM
In reply to: server by James Denison

James, Not sure what that the Cambridge CNET office does at all.
245 First St., Cambridge, MA.
High rent district. Still there.
Genetic Research?? WOW! In the middle of the High Tech Medical Research areas in the world. Figure that one out.
Maybe they want to rent their facility to an upcoming mouse developement company?
I still love my one-button mouse. So simple. :

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I have no idea either.
by James Denison / March 30, 2008 5:51 AM PDT
In reply to: SERVER NEW

Must be some reason. Maybe mentioned in some older 8K report at the SEC.

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SERVER is Weird today:
by taboma / March 29, 2008 2:29 PM PDT
In reply to: server

Transferring messages to you into a different post. WEIRD!!
Maybe the engineers can figure it out.
James,
SERVER - New!
by taboma - 3/29/08 8:40 PM. (Not! Sunday the 39th, 12:25 pm ESDT)

Maybe the engineers can figure out the time wharp.

In reply to: server by James Denison

James, Not sure what that the Cambridge CNET office does at all.
245 First St., Cambridge, MA.
High rent district. Still there.
Genetic Research?? WOW! In the middle of the High Tech Medical Research areas in the world. Figure that one out.
Maybe they want to rent their facility to an upcoming mouse developement company?
I still love my one-button mouse. So simple. :

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SERVER. Third try:
by taboma / March 29, 2008 2:50 PM PDT
In reply to: server

SERVER - New!
by taboma - 3/29/08 8:40 PM
In reply to: server by James Denison

James, Not sure what that the Cambridge CNET office does at all.
245 First St., Cambridge, MA.
High rent district. Still there.
Genetic Research?? WOW! In the middle of the High Tech Medical Research areas in the world. Figure that one out.
Maybe they want to rent their facility to an upcoming mouse developement company?
I still love my one-button mouse. So simple. :

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Server
by taboma / March 29, 2008 5:40 PM PDT
In reply to: server

James, you will never know on this forum.

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dipsy doodle
by James Denison / March 27, 2008 7:27 PM PDT
lol, remember that old term?

Anyway, looking at the two previous dips it would seem this latest one is a bit lower, but maybe not significantly so. It's not unusual for a stock to dip during a time of uncertaintly which CNET is certainly facing at this time, but if the market reaction were truly reacting negatively rather than with a bit of caution then we'd have seen a much stronger reaction to the downside I think. I find that encouraging because I don't think either group is going to screw up so badly they panic shareholders, so this last dip might be looked on as a buying opportunity instead.

Of course anything could happen, but what I'm seeing is some reasonable moves by current management to defuse the challenge they are facing, and which may be successful both for them, the challenging shareholder group and the company.
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The 2 scariest words......
by Angeline Booher / March 28, 2008 2:52 AM PDT
Hedge fund JANA Partners LLC.....

.....since Bear Stearns. Happy

Angeline
Speakeasy Moderator
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The 2 scariest words......
by taboma / March 29, 2008 5:52 PM PDT

The technitions, and how they baffle everyone. Strange how a post is not showing up and later on it is. Weird.
I hope the IT Dept, for CNET figures it out someday.
Good luck to them.
And by the way, this has been happening for several months now.

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JANA
by James Denison / March 30, 2008 5:54 AM PDT

I've seen them back off when their takeover attempts on others have failed in past. In fact, I don't think they are that successful usually in a complete takeover, but do have success in changing company policies where they become involved and maybe that's their main plan anyway.

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I'm wondering if two board members
by Dango517 / March 30, 2008 6:01 AM PDT

might be getting the "boot" next board meeting. Grin

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Something like
by Dango517 / March 30, 2008 6:12 AM PDT

first order of business, clear away any policies that inhibit a quick change in board members

second order of business, fire two board members.

third order of business, replace two board members.

fourth order of business, vote down take over.

Might be a long board meeting. Grin

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(NT) Grounds........."conflict of interest"
by Dango517 / March 30, 2008 6:20 AM PDT
In reply to: Something like
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We'll know shortly what the outcome is.
by James Denison / March 31, 2008 1:36 AM PDT
In reply to: Something like

Since CNET management was smart enough and quick enough to make some strong moves, I doubt JANA will accomplish a takeover in quite the manner they might have first hoped. Some sort of compromise between the two will certainly occur though.

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(NT) nope, it will be ugly
by Dango517 / March 31, 2008 8:28 AM PDT
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