Red Ventures, the digital media powerhouse based in Fort Mill, South Carolina, has confirmed the sale of tech news and reviews site CNET to Ziff Davis, a leading digital marketing company.
The deal, valued at over $100 million, marks a significant turn of events for CNET, which originally bought Ziff Davis over two decades ago for approximately $1.6 billion.
Ziff Davis' Evolution and Market Presence
Today, Ziff Davis is a publicly traded company with a market value of $1.94 billion, standing out as one of the few thriving digital media and services conglomerates in the U.S.
Over the past two decades, the firm has undergone numerous transformations. It faced bankruptcy in 2008 due to the decline of print publications following the internet boom but was acquired by J2, a cloud services provider, in 2012.
In 2021, J2 Global spun off its cloud business, renaming its remaining entity Ziff Davis.
The Financial Details
Although the exact price of the transaction remains undisclosed, Axios reported in January that Red Ventures aimed to sell the asset for around $250 million.
Sources involved in the discussions indicated that this valuation was significantly higher than what they were willing to pay. Both Red Ventures and CNET have confirmed the deal, but neither provided immediate comments. The New York Times was the first to report the transaction on Tuesday.
Red Ventures' Acquisition and Subsequent Moves
Red Ventures acquired CNET, along with several smaller websites, from ViacomCBS (now Paramount Global) in 2020 for $500 million, according to The Verge's report.
Two years later, Red Ventures sold some of these smaller brands, including GameSpot, TV Guide, and Metacritic, to Fandom. It also shuttered the site Chowhound, which was later revived by Static Media in 2023.
The Challenges and Misalignment
Red Ventures has grown to become one of the largest privately held digital media companies in the U.S., but its business model proved incompatible with CNET.
The acquisition was funded by debt, and Red Ventures hoped to grow CNET's business by integrating it into its revenue engine, which supports other assets like Bankrate and The Points Guy. However, CNET's different sales structure, relying primarily on direct sales rather than affiliate commerce, made integration difficult. Additional challenges such as a sluggish ad market, declining traffic, rising interest rates, and brand reputation issues further complicated the situation.
Ziff Davis' Acquisition Strategy
Despite the market slowdown in advertising, Ziff Davis appears poised to continue its acquisition streak. Earlier this year, it acquired Lifehacker from G/O Media, a site offering tips for a better life.
Sources told Axios that Ziff Davis is preparing for more mergers and acquisitions, indicating that the company remains active and strategic in expanding its digital media portfolio.
The sale of CNET to Ziff Davis represents a notable shift in the digital media landscape. While Red Ventures struggled to integrate and grow CNET within its business model, Ziff Davis' acquisition strategy and market presence might offer a better fit for CNET's continued growth and innovation.
Eyeing a guaranteed expansion for its future projects, Ziff Davis will leverage news assets for the world to see what it will offer in the digital media industry.
In other news, Elon Musk revived the legal battle against Sam Altman, the brain behind ChatGPT. According to the Tesla CEO, he was deceived into co-founding the AI company.
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