New Life at CNET

Online-media giant CNET Networks (Nasdaq: CNET  ) had a regrettable 2006. Even before the defecting executives and the stock-option backdating scandal, the company was rocked by product delays. Looking to bounce back, it clocked in with a showing for its most recent quarter that was mixed at best, though there are indications of better times ahead.

For the quarter that ended in March, revenue rose by 10% to hit $92.1 million, or a 15% advance based on continuing operations, but it also posted a loss of $0.06 a share. However, once you back out a series of stock-option expenses, realized gains on investments, and investigation charges, CNET did break even on a continuing basis. Analysts had been braced for a $0.04-per-share loss on $92.4 million in revenue.

CNET grew its top line despite an 18% decline in daily page views. Webshots appears to be the major culprit in the drop, as waning popularity for the struggling photo-sharing site only compounds the problem caused by its always having been tough to monetize.

The rest of CNET is holding up better. It's now drawing 144 million unique monthly visitors, a 23% improvement over a year ago. Some of those gains are coming from recent additions like last month's relaunch of the BNET.com business site and the growing presence of TV.com.

TV, in fact, is a pretty neat story at CNET. The company originally used the TV.com domain to link to CNET's television-set reviews, but after acquiring the TVTome.com community site, it made TV.com more pop-culturally relevant. The site now has 19 million users and benefits from having friends in high-rated places, such as CBS (NYSE: CBS  ) , which turned to TV.com to launch an interactive site for the huge CSI series.

CNET is also starting to feel better about its future. It is sticking to its top-line guidance of $425 million to $445 million in revenue this year. However, it is now looking to earn between $0.14 a share and $0.24 a share in 2007, before a beefy $1.23-per-share tax benefit. If you account for the $0.15-per-share hit from stock-based compensation that's baked into that net-income range, the guidance is nicely higher than the original forecast for profits before stock-based compensation expenses.

The dark clouds are starting to lift. The advertisers are starting to arrive. CNET, too, is also finally arriving. 

CNET is an active recommendation in the Rule Breakers growth-stock newsletter service.

Longtime Fool contributor Rick Munarriz is a fan of CNET, but he still misses the old MP3.com days. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.