SAN FRANCISCO — Even after spending $100 million recently on a marketing campaign, San Francisco-based Internet news and commerce company CNet Networks is hardly the household name that Yahoo, America Online and EBay are.
But CNet can claim something that eludes all but a handful of the Internet elites: It's one of only a dozen or so pure Net companies that have reported profits.
CNet runs a network of technology news and shopping Web sites, including CNet.com, News.com and Computers.com, and sends out news via free e-mails to 11 million subscribers.
By focusing on tech news and information, CNet targets a narrower audience than its better-known Web brethren, such as Amazon.com or Priceline.com. CNet visitors can click through more than 100 sorts of color ink-jet printers listed for sale by outside vendors, scan editor and user reviews, then see where they are all available and at what price. It offers tech product auctions, software downloads and technical support questions and answers.
CNet has lured technology advertisers like Compaq and Dell, which are willing to pay more to reach a tech-savvy audience that is more likely to buy on the spot. And CNet's audience is growing: Its users need reams of information as tech products and prices change more rapidly. According to Media Metrix, CNet was the 18th-most-visited Web site network in March, with 10 million unique visitors, up from 7 million in January 1999.
Advertising sales now produce 60% of CNet's revenue. But CNet has begun to broaden its sales by providing raw data on more than 100,000 pieces of hardware, so computer distributors and their customers can compare everything from a Toshiba notebook computer with an Apple desktop PC by price, memory and other factors.
CNet's audience will grow because "technology is seeping into every facet of our daily lives," said WR Hambrecht & Co. analyst Derek Brown, one of 14 analysts who rate CNet stock as "outperform" or better.
CNet is still an Internet stock, though, and its shares have taken a bumpy ride. The company went public in 1996, at a split-adjusted price of $4. It soared to a high of $79.88 last December, then tumbled to below $25 in the April Internet stock sell-off. It closed at $32.38 on Friday.
For 1999, on revenues of $112 million, CNet had an operating loss of $61 million, but it earned $417 million after the sale of Internet investments.
