Funnily enough, before writing my bear rebuttal, I spent some time this morning catching up on CNET's
It's still hard to believe that CNET needs 2,300-plus employees, given that some of the competition looks a lot leaner --for example, TheStreet.com
Perhaps the problem is that the co-founder, Shelby Bonnie, is running the company. In other words, firing people may mean getting rid of friends.
As for emerging competition, it is true that Yahoo!'s
Actually, I think CNET is taking this threat seriously. Maybe this is why the company is diversifying into other categories.
But such moves can be troublesome. Look at the mighty Google
As for the options backdating issue . valuing a company is often more art than science, but without the latest financials, it is more of an art, since we do not know how costs are tracking. In fact, this is a new thing on Wall Street. Analysts who follow the stock -- as well as big-time institutional investors -- have no choice but to make educated guesses. (That is why they get the big bucks.)
But how good are analysts at making those guesses? Keep in mind that companies continually miss estimates -- in terms of underperforming or overperforming. And how long will these companies go without reporting their bottom-line numbers?
What I see at CNET are lots of potential risks: implications of the options backdating; increased competition; moves into unrelated categories; a bloated cost structure. Just look at the company's stock price over the past two years.
Wall Street wants more than revenue growth. It wants some old-fashioned discipline.