The Wall Street Journal-20080206-CNET Tax Gain Plumps Profit- Zander Lurie Appointed Chief Financial Officer- Loss Forecast in Quarter
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CNET Tax Gain Plumps Profit; Zander Lurie Appointed Chief Financial Officer; Loss Forecast in Quarter
Full Text (410 words)CNET Networks Inc. said fourth-quarter profit soared on a $184.2 million tax benefit, but forecast a wider first-quarter loss than Wall Street expected.
The San Francisco media Web provider of technology news and reviews, which has found itself the target of dissident investors looking to take control of its board, reported results after the close of regular trading and also announced that Zander Lurie, 34 years old, senior vice president of strategy and development, will become chief financial officer March 7. He will succeed George E. Mazzotta.
Mr. Mazzotta is resigning to pursue other interests after fulfilling his commitment to help the company through its stock-option investigation, said CNET spokeswoman Sarah Cain.
Mr. Mazzotta declined to comment.
In October 2006 a CNET board committee concluded that company management backdated stock options and several top executives, including co-founder and CEO Shelby Bonnie, resigned. (The Securities and Exchange Commission later closed its inquiry into the matter without taking any action.)
Before joining CNET in 2006, Mr. Lurie was a vice president of investment banking at J.P. Morgan Chase & Co. in New York and San Francisco.
Excluding items, the company's earnings in the latest quarter rose to 15 cents a share from 12 cents.
CNET, which operates Web sites ranging from videogame site GameSpot to the Chow food site, said unique monthly users were 147.6 million and average daily page views were nearly 83 million. Because CNET's figures now include international as well as U.S. numbers, comparisons with a year-earlier were not available.
CNET is facing increased competition for users and online advertising dollars from such tech news Web sites as TechCrunch and Engadget as well as individual bloggers.
CNET's battle with dissident investors became public last month. The dissidents, including hedge funds and venture-capital firms, proposed enlarging CNET's board and put forward several nominees for directors. CNET fired back, adopting a poison pill that allows it to issue additional shares at a discount if any person or group acquires 15% or more of the stock. CNET also declared that the dissidents didn't meet requirements for putting their proposals before shareholders, prompting a lawsuit. A ruling is expected in the next few months.
CNET expects a first-quarter loss of four cents to five cents a share, including a two-cent stock compensation expense, on revenue of $91 million to $95 million. The mean estimates by analysts surveyed by Thomson Financial were for a first-quarter loss of one cent on revenue of $99 million.
