Internal struggle at CNet could lead to company takeover @ Gaming Target

Written by Matt Swider on January 07, 2008

News: Struggle, as in investor takeover, not one having to do with Jeff Gerstmann.

CNet Networks, the publicly held, San Francisco-based media company and owner of GameSpot.com, Downloads.com, News.com and several other top-level domains, may see its board of directors ousted in an investor takeover attempt, according to the New York Times.

The tech-focused online media company has underperformed in recent years with a 19% loss in stock over the last three, while start-up blogs like TechCrunch have surpassed CNet in terms of pageviews at a fraction of the spending cost. Additionally, only two of 18 analysts list CNet as a buy, according to Bloomberg. With traffic declining and angry investors increasing, the Internet icon is poised for a takeover. The consortium of investors looking to do just that has, according to The Times, amassed a 21% stake and is looking to control 7 of the 13 seats of an expanded CNet board of directors.

The board, to its best effort, has changed its charter and bylaws in the wake of these takeover talks and points out that a shareholder must have $1,000 in shares for one year to make amendments to its bylaws. Since no investor within the consortium meets that standard, it cannot change the board size from its current eight to 13 for a majority rule.

CNET's internal struggle (the stock thing, not the Gerstmann-gate affair) may be resolved in time when the investor consortium meets those requirements or it successfully mounts a legal effort to bypass the setback in court.

source: NYTimes.com