You can't keep a good company down. CNET Networks
Don't get too excited about the profit, since the sum resulted from a huge one-time tax benefit. Adjusted for charges and items like stock-based compensation, earnings mere climbed from $0.12 a share to $0.15 a share. (Review CNET's third-quarter earnings.)
Sure, CNET isn't growing as quickly as some of the dot-com darlings, but it's certainly heading in the right direction. This may not be enough to appease the activist investors who are looking to shake up CNET, or the shareholders who aren't buying into its "slow and steady wins the race" mantra, but it's never stopped the company from drawing a crowd.
CNET's collection of properties attracted 148 unique monthly visitors during the quarter. On an average day, CNET serves up 83 million page views. True, nimbler blogs and sticky social networks may be nibbling away at more traditional cyberspace haunts like CNET's sites, but those stalwarts are clearly still finding ways to grow.
The wide world of CNET
Unfortunately, CNET's foreign results posed a greater challenge. Despite healthy top-line growth, CNET is ringing up just a 6% operating margin abroad for the fiscal year, well short of its 24% domestic operating margin.
That hasn't stopped the company from growing in select areas. It recently acquired its third auto-related site in China, a niche that CNET now claims to lead. It's a great place to be, especially as China's booming economy affords more of its 1.3 billion citizens the luxury of auto ownership.
Its stronghold in Chinese car sites positions CNET as an intriguing emerging-markets play. Instead of risking bets on coattail riders like Chinese car-component supplier China Automotive Systems
Growing drivers driving growth
It was interesting to hear CEO Neil Ashe break out the core properties for CNET's future. CNET, Gamespot, BNET, TV.com and Chow will be the company's five drivers. While the company obviously plans to nurture its other tech-related brands, it's interesting to see CNET's lifestyle brands take center stage.
BNET and Chow are so new that the company doesn't expect to turn a profit on either site this year. However, BNET is growing quickly as a business-resource website, with 6 million unique monthly visitors. According to the CNET, BNET is outdrawing The Wall Street Journal and McGraw-Hill's
TV.com may be a peculiar choice to highlight, since television content has dried up during the Writers Guild of America strike. Still, that's a temporary setback for the industry.
The guidance light
CNET aims to grow revenue this year by 8% to 13%, to between $440 million and $460 million. Profitability will be meager -- no surprise for an acquisition-happy company that must account for its purchases over time. CNET is ultimately projecting a profit of just $0.06 a share to $0.08 a share, after a $0.06-per-share hit in share-based compensation.
A couple of years ago, it seemed that CNET might get acquired by a larger player like Google
Those companies probably don't need CNET at this point. Google is apparently happy as a partner, providing third-party ads on CNET's sites. Google's paid-search revenue accounted for 10% of CNET's top line last year.
You can't keep a good company down -- but CNET may be more interested to know what it has to do to pick a good company up.
CNET is a recommendation in the Rule Breakers growth-stock newsletter service. Yahoo! is a former Motley Fool Stock Advisor pick. Microsoft is an Inside Value selection. Try any of our market-beating investing newsletters free for 30 days.
Longtime Fool contributor Rick Munarriz is a fan of CNET, but he still misses its bygone 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 high-tech disclosure policy.