By Julian Matthews, Newsbytes
KUALA LUMPUR, MALAYSIA,
22 Dec 2000, 12:07 PM CST
Online tech media giants CNet and ZDNet will not merge their
Asian sites, according to Robert Borchert, vice president of investor
for CNet Networks, Inc [NASDAQ: CNet].
"We have no plans for the merger of sites. We are committed to a
multi-brand strategy in the US and internationally. Both CNet and ZDNet
sites allow CNet Networks to increase its reach to technology users
around the world and therefore provide a deeper end-to-end solution for
our marketing partners," he said. Borchert was commenting on CNet's
re-acquiring of its branded sites in Asia from troubled Asiacontent.com
Ltd [NASDAQ: IASIA] on Dec 12 for $6 million in cash.
The buyout involved the transfer of 84 staff and seven CNet Asia sites in
Hong Kong, Singapore, Malaysia, Taiwan, China, India and South Korea,
originally developed in a joint-venture with the pan-Asian content manager
ZDNet, which merged with rival CNet in a deal concluded Oct 17, also runs
parallel Asian sites with similar technology news, software downloads and
product reviews, but with separate offices and staff.
Speculation was rife in the market that several of the sites could be
merged, given their still fledgling development in the region, and key
resources consolidated and redundant staff cut.
Both CNet Asia and ZDNet Asia Pacific run regional editorial offices out of
Borchert dismissed rumors that both offices would likely be merged during
the earmarked six-month transition transfer period from Asiacontent.com.
He said with the acquisition, CNet Networks currently has offices in eight
countries and a total 250 staff and will benefit from
Sources in Singapore indicated that it was still "business as usual" at the
Asiacontent.com's office, albeit under new management.
Borchert also denied that Nasdaq-listed Asiacontent.com's stock dipping
below US$1 triggered the buyout.
"This transaction had little or nothing to do with Asiacontent's status as
a public company. Our purchase of the remaining 81 percent of the
joint-venture was an opportunity to fully benefit from the operating
leverage and strength created through our global, multibrand strategy,"
said Borchert in an e-mail response.
Borchert said CNet still viewed the Asian market as "a significant growth
opportunity" despite the fact regional markets have weakened, tech stocks
have tumbled, and various pure content plays have flopped.
"With only about two percent of the total population currently online, the
Asian market as a whole will grow significantly over the next five years.
We feel it is important to have both local market knowledge and a strong
and growing presence across Asia to take a leadership position. Both the
ZDNet and CNet sites are constantly evolving into stronger, local-market
online destinations for technology information and services," he said.
The buyout also places under scrutiny Hong Kong-based Asiacontent.com,
which considered CNet Asia its flagship brand, and whose stock has dipped
below $0.50 per share in recent trading, far below its $15.93 peak since
its April listing.
Under Nasdaq compliance rules, any company which has a closing bid of $1 or
less per share for 30 consecutive trading days could face delisting.
Asiacontent.com's net losses for the first three quarters this year
amounted to $35.3 million. In September, the company laid off 50 people, or
8 percent or its workforce, in an attempt to cut costs, and in October it
announced it was repositioning itself as a solutions provider.
The three-year-old company, formerly known as Tricast, manages a stable of
regional and country-specific sites in joint-ventures with top US brands
including MTVAsia.com with MTV Networks Inc, asia.eonline.com with E!Online
and DoubleClickAsia.com with DoubleClick, Inc. It also inked a similar
joint-venture with CBS's MarketWatch.com Inc [NASDAQ:MKTW] in July to
launch Asian financial sites by year-end.
Reported By Newsbytes.com, http://www.newsbytes.com
(20001222/WIRES TOP, ASIA, ONLINE, BUSINESS/CNet/PHOTO)