CNET Networks (NASDAQ:CNET) must be breathing easier today. The SEC has concluded its investigation into the company's historical stock-option grants, recommending no enforcement action.

It's welcome news for a company that became one of the more prolific tech companies to lose its head amid last year's stock-option backdating scandal. CEO Shelby Bonnie stepped down over the matter, even as larger implicated companies like Apple (NASDAQ:AAPL) managed to hold on to their corporate chieftains.

Bonnie's departure alone should have signaled a clean break from the shady allegations of suspiciously sweetened prices for executives' stock options, but CNET's recovery has still been slow.

Shares of CNET have dropped 25% since Bonnie's departure back in October, despite abundant offerings to appease the angered gods of Wall Street. The company's general counsel and head of human resources joined Bonnie in bowing out at the time, while COO Barry Briggs left the company two months later.

However, sometimes even a string of human sacrifices isn't enough. As fate would have it, financial performance is still thicker than bloodletting. Unfortunately for CNET, it hasn't lived up to that side of the ritualistic bargain.

Stoning the headstones
CNET's latest quarter has been typical. Revenue climbed just 5% in the second quarter, not enough to reverse an operating loss stung by litigation charges. The company's collection of websites drew 137 million unique monthly visitors, though page views fell by a sharp 19%.

The traffic dip mostly results from the decreasing relevance of photo-sharing website Webshots. Back out the poorly monetized but highly visited site, and page views would be off by just 1%.

It's a sloppy asterisk, though, and it begs two valid questions. What's the problem with Webshots? And why, aside from Webshots, is CNET still running essentially flat as Internet usage grows elsewhere?

Let's tackle Webshots first. Photo-sharing sites have evolved over the years. They were originally the domain of photo-finishing specialists like Kodak (NYSE:EK) and Hewlett-Packard (NYSE:HPQ), hoping to make the most of the migration process to digital photography by cashing in on the picture-printing process. They were too bland for their own good, eventually giving way to sites like Shutterfly (NASDAQ:SFLY), which injected a little personality and innovation into the process. Webshots became a pioneer by actually encouraging its users to share snapshots, rather than simply storing them as fodder for future print runs.

Images have evolved since then. Yahoo!'s (NASDAQ:YHOO) Flickr introduced an engaging community element to the process. Social-networking sites like Facebook and MySpace use snapshots as a way for registered members to personalize -- and chronicle -- their profile pages. In short, digital photography no longer stands still. A picture used to tell a thousand words, but now a thousand words are accompanied by a picture.

Sure, Webshots has amassed nearly 400 million snapshots. It's slowly rolling toward video, too. That obviously doesn't matter to the public, which is consuming eye candy elsewhere.

Good riddance, you may say. Digital photography and video are chunky bandwidth-eaters, and a tough niche to monetize. Webshots visitors are unlikely to click on ads, because they're not necessarily searching for something the way someone would at a search portal. It's also hard to serve up the right ads, given the complexities of providing relevant pitches for a particular snapshot.

That's still no excuse. A meekly monetized YouTube still fetched $1.65 billion in a buyout. Facebook will fetch far more when it eventually decides to go public. Meanwhile, CNET sits on an enterprise value of $1.1 billion, with so much more to offer than just a struggling photo-sharing site.

Thinking outside the Webshots
If the three most important aspects of real estate are location, location, and location, then CNET's a dot-com baron. It owns some of the juiciest domains in cyberspace, several of them radically underdeveloped, like Search.com and Kids.com.

It's still a bit of a head-scratcher to see page views clock in lower, especially when you consider that CNET also watches over popular sites like software hub Download.com, Internet news site News.com, and Gamespot.

Think about that last one for a moment. Gamespot.com should be overflowing with traffic -- and it is. According to Alexa.com, visitors to the site have soared over the past year. Its traffic ranks it at No. 52 in the country, and No. 128 in the world. Domestically, Gamespot's own GameFAQs.com is actually ranked even higher than its parent!

Between the excitement of new next-generation systems like the Wii and PS3 last year, and hot upcoming titles like Halo 3 and Rock Band, gaming news is a gold rush. The country's leading video game retailer -- the similarly named GameStop (NYSE:GME) -- has been on a tear lately.

GameStop's stock has more than doubled since Bonnie left CNET. There's no connection, of course, but the carnage is clear. GameStop's stock doubles, while shares of Gamespot's parent crumble.

CNET doesn't break down the performance of individual properties, aside from Webshots. However, you wouldn't be going out on too much of a limb if you unscientifically removed Gamestop's success to highlight wider weakness at the rest of CNET.

Minus Webshots and Gamespot, CNET is a collection of tech and entertainment properties. Nimble blogs eating away at CNET's reporting status, or slow starts at recent introductions like BNET, CNETTV.com, or Chow.com, can't be the only contributors to CNET's woes.

I like the company's prospects, which is why I recently chose it as one of eight hot stocks for under $8. And I like the guy that CNET has running the show these days. CEO Neil Ashe is proven, yet spunky enough to mine CNET's properties more effectively.

Last night's SEC clearance gives the company a clean slate on the credibility side. Now let's see Ashe and his company make the most of that fresh canvas. CNET needs to whip itself into something breathing, vibrant -- and far removed from the moribund burial site that the site has become.

CNET is an active recommendation in the Rule Breakers growth-stock newsletter service. Yahoo! and GameStop are Motley Fool Stock Advisor recommendations. Find out why with free 30-day subscription offers to any or all of the newsletters.

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's disclosure policy gets a 10 out of 10.