• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

CNET Networks to Acquire ZOL and Fengniao

Posted on: Thursday, 14 October 2004, 06:00 CDT

CNET Networks, Inc. (Nasdaq:CNET) today announced that it has entered into a definitive agreement to acquire the assets of ZOL and Fengniao, which operate the zol.com.cn and fengniao.com Web sites, respectively, in cooperation with Chinese subsidiaries and affiliates. The transactions total $16 million in cash payments to be paid over the next two quarters, with payment beginning in the fourth quarter of 2004. Both transactions are effective immediately and not expected to materially impact financials in 2004.

ZOL is one of the leading providers of online personal technology-related content and shopping services in Northern China. Fengniao is one of China's leading digital photography properties, with reviews on over 1,000 digital cameras, as well as a large image database, content, and forums related to the digital photography category. These transactions further expand CNET Networks' online presence with businesses that bring a combined daily reach of over 1 million users generating over 7 million page views each day(1).

CNET Networks plans to cross market ZOL and Fengniao with its established businesses in China, with the goal of expanding the audiences and advertiser relationships of both its new and existing products. The company has built a significant presence in China, largely focused offline to date, operating eight magazine titles, an events business, and several developing online properties. CNET Networks has had an established franchise in China for over 10 years that is led by a strong, local management team with extensive market expertise.

China has become one of CNET Networks' fastest-growing international markets. The company's existing operations in China are expected to account for approximately five percent of CNET Network's total revenue this year and have reached profitability.

"These acquisitions accelerate our ability to apply our existing relationships, infrastructure and resources toward becoming a leading online content provider in China," said Shelby Bonnie, chairman and CEO of CNET Networks, Inc. "We have invested prudently over the past decade to ensure a strong presence in China. ZOL and Fengniao are popular, high-quality resources that complement our products in China, and provide ample opportunity for significant growth."

The addition of ZOL and Fengniao enable CNET Networks to further solidify its position in China, a market that is geared for significant growth. Only 7.6 percent of the Chinese population currently uses the Internet(2), yet China is the second largest market of Internet users behind the United States(3). The sheer size of the Chinese market, combined with the rapid growth of broadband adoption, positions China for significant growth in Internet usage within the next few years(3). In addition, China's online advertising market is in its early stages of growth. Spending increased 120 percent in 2003 to $130 million, and is expected to reach $482 million by 2006(4).

About CNET Networks

CNET Networks, Inc. (www.cnetnetworks.com) is a premier global interactive content company that informs, entertains, and connects large, engaged audiences around topics of high information need or personal passion. The company focuses on three categories--personal technology, games and entertainment, and business technology--and includes such leading brands as CNET, ZDNet, TechRepublic, MP3.com, GameSpot, CNET Download.com, CNET News.com, Webshots, Computer Shopper magazine, and CNET Channel. With a strong presence in the US, Asia and Europe, CNET Networks has operations in 12 countries.

(1) CNET Networks internal data

(2) PwC, Global Entertainment and Media Outlook, June 04

(3) IDC

(4) Shanghai iResearch Co., Ltd.

More News in this Category