ViacomCBS nears deal to sell CNET to Red Ventures for $500 Million

ViacomCBS Inc. is close to selling CNET Media Group to Red Ventures LLC, according to people familiar with the matter, as the entertainment giant sheds parts of its business to focus on video streaming.

Red Ventures, a media and technology company, is expected to pay about $500 million to acquire the network of websites, which includes CNET, GameSpot and ZDNet, the people said.

The deal could be announced as soon as Monday, assuming the talks don’t fall apart, the people said. Red Ventures’ initial interest in CNET was first reported by The Wall Street Journal last month.

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Fort Mill, S.C.-based Red Ventures has struck a series of deals in recent years that has made it an important competitor in the digital-media sector. It purchased Bankrate, a personal-finance website, in 2017 for $1.24 billion, and acquired health and wellness websites owned by Healthline Media for an undisclosed sum last year. It also owns the Points Guy, a travel-rewards site, and Reviews.com, which publishes information about consumer products.

Red Ventures plans to invest in CNET, GameSpot and ZDNet, as well as to expand the company’s e-commerce business, the people said. A focus will be improving the design and performance of the sites, they said. CNET gets a cut of revenue from purchases made by readers who click on links to third-party merchants in its stories.

Red Ventures generates revenue by connecting readers to products offered by its marketing partners, such as credit cards, loans and travel packages. Red Ventures also operates digital advertising networks and a technology-licensing business. Acquiring CNET would allow Red Ventures to reach readers and advertisers in categories such as autos, small business and enterprise-technology products, the people said.

Red Ventures, which is backed by private-equity companies Silver Lake and General Atlantic, is profitable and valued at more than $10 billion, some of the people said. CNET Media Group is profitable on a stand-alone basis, according to a person familiar with the matter, and generates more than $100 million of revenue annually.

Mark Larkin, executive vice president and general manager of CNET Media Group, is expected to stay on through the acquisition, the people said. Red Ventures isn’t planning to relocate CNET’s employees, many of whom are based in the San Francisco Bay Area.

More than 980 employees work for CNET’s properties world-wide, according to another person familiar with the matter.

Founded in 1992, CNET acquired rivals such as GameSpot and ZDNet to become one of the most-visited technology-website networks globally. When it was acquired by CBS Corp. in 2008 for $1.8 billion, CNET’s portfolio of websites drew 54 million unique users in the U.S. a month, which made it one of the most popular digital networks in the U.S.

Since the deal, internet users have increasingly turned to major internet portals such as Alphabet Inc.’s Google and YouTube and social networks such as Facebook Inc. and Twitter. CNET also faces competition from newer technology sites, including Vox Media Inc.’s the Verge, G/O Media Inc.’s Gizmodo and Verizon Media Group’s TechCrunch, and beefed-up technology coverage from general-interest news organizations.

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CNET has changed since it was purchased by CBS more than a decade ago. In 2015, CBS Corp. said it sold some of its internet businesses in China, which included parts of CNET, for about $385 million. CBS Interactive, the ViacomCBS unit that operates CNET, has shifted its focus toward direct-to-consumer video streaming in recent years. It created the CBS All Access streaming service that is expected to be at the heart of the company’s coming direct-to-consumer offering.

ViacomCBS is focusing much of its efforts on its direct-to-consumer streaming service, which is being rebranded and expanded. Earlier this year, ViacomCBS said that the so-called super service would include movies from the Paramount movie studio and shows from several of the company’s television networks.

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ViacomCBS is looking to sell other assets, including the Simon & Schuster publishing house and CBS’s Midtown Manhattan headquarters, known as Black Rock. ViacomCBS expects Simon & Schuster to fetch at least $1.2 billion, and analysts expect the headquarters building to sell for at least $800 million.

Click here to read more from the Wall Street Journal

Miriam Gottfried contributed to this article.