1. There is more to the company than its namesake site.
Sure, the company's CNET.com is a great site to get the skinny on the latest consumer electronics gadgetry. But you don't have to have a hankering for a new cell phone or flat-screen television to turn to CNET's amazing dot-com playground.
Maybe you've hit Download.com to find an efficient spyware zapper. If that doesn't work, maybe you've turned to the proud geeks at Tech Republic for assistance. GameSpot.com may have welcomed you in if you wanted to know about the latest video-game offerings. If you use that television set for something else -- like actually watching TV -- then TV.com may be your portal to what you missed and what's worth watching.
It doesn't end there, of course. MySimon.com and CNET's Shopper.com are there for you if you want to do some comparison shopping, as they stack up several leading retailers to get your best price. Or if you're keen to check out the latest tunes, MP3.com is your portal to digital downloads.
Found what you wanted yet? There's also the BNET business hub, the News.com tech-news hangout, or the Search.com engine. If, at the end of the day, you're exhausted, but managed to shoot a few digital snapshots along the way, upload them to CNET's own Webshots.com to share them.
I haven't even covered all of the impressive CNET properties yet. This bout would run pages long if I gave each site the attention it deserves. In a nutshell, CNET is so loaded with content that it's drawing more than 116 million unique visitors every month.
2. CNET is only getting bigger.
When you attract 93 million page views daily throughout your sites, it's easy to rest on your laurels. But CNET doesn't. In fact, I'm often surprised at the depth of its collection of practically undeveloped goldmine domain names.
Case in point: Its acquisition of the popular TVTome.com couch-potato review site, which it then used it to launch TV.com. CNET is in the process of doing the same thing with other timely purchases, like ChowHound.com (for Chow.com) and UrbanBaby.com (for Kids.com).
The company also had the vision to hop on the video-streaming craze before YouTube popularized the "clip culture" revolution. Just check out "The Buzz Report" and some of the other segments at CNETTV.com to watch some of the best original Web video content anywhere.
3. CNET is getting smarter.
As a company that is rubbing humbled shoulders alongside Apple Computer (NASDAQ:AAPL) and Intuit (NASDAQ:INTU), it may seem odd that I'm casting CNET as brainy when it's one of the dozens of companies caught in this year's options-backdating scandal. The uncertainty has cost the affected companies in credibility and in filing delays.
However, we can't change the past. We can only assess the future. As Webshots lost ground to photo-sharing rival Facebook and social-networking behemoth MySpace, page views declined by 5% over the past year, yet revenue actually clocked in 14% higher this past quarter. That's CNET's monetization magic, as it continues to milk more out of its gargantuan audience by loading up its ad inventory, as well as turning to places such as Google (NASDAQ:GOOG) to kick in with ads to fill the empty spaces.
4. CNET remains an attractive buyout candidate.
For more than a year now, CNET has been the subject of takeover speculation. Major media companies are snapping up prime dot-com real estate, and the paid-search giants, such as Google, Yahoo! (NASDAQ:YHOO), and Microsoft (NASDAQ:MSFT), realize that it's the only way to lock up the billboard space.
How much is CNET worth? Analysts expect the company to earn $0.31 a share on $450 million in revenue next year. Thirty times earnings and three times sales may seem high in conventional terms and reasonable in the high-margin dot-com realm, but it's downright cheap when compared with other content-site grabs. Last year, NBC snapped up iVillage for 60 times earnings and six times revenue. A few months earlier, Dow Jones (NYSE:DJ) sealed the deal with MarketWatch at 120 times earnings and seven times sales.
I'm not suggesting that CNET will be gobbled up at those multiples and double overnight. But I do know that paid search has only grown more valuable since those deals took place, and buying CNET is like occupying Park Place, then rolling snake eyes to complete the set. Once CNET is able to get past any potential accounting shenanigans, the prime real estate will glisten again. Whether CNET sells out or keeps growing at its steady pace, the time to buy CNET is now, when the stock is in the single digits and the financial statements are still smoking, because I don't think the same opportunity will exist once the matter is finally put to rest.
5. The future will only get brighter.
No suitor? No problem. If CNET's growth appears lethargic, just wait until the sponsors come back in a few months, when Microsoft's Windows Vista fuels PC upgrades and the PlayStation 3 and Nintendo Wii get software publishers marketing their titles again. CNET's award-winning tech and gaming content sites are important cogs in the CNET engine, and those catalysts will provide fiscal layups.
I believe in CNET. I recommended CNET to Rule Breakers newsletter subscribers last year. When the stock dipped below $9 two months ago, I jumped on it again. I won't pretend to know the absolute truth behind the backdating accusations or when CNET will bounce back. I will tell you that I know valuable real estate when I see it. I've seen it. It's CNET.
Think you're done with the Duel? You're not! Go back and read the other three arguments, and then vote for a winner.
Microsoft and Intuit areMotley Fool Inside Value recommendations. Yahoo! is aMotley Fool Stock Advisorpick.
Longtime Fool contributor Rick Munarriz is a fan of CNET, but he does not own shares in any of the companies mentioned in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.
