Moonves Says $1.8 Billion Cnet Purchase Better Than Buyback

By Michael White

Oct. 18 (Bloomberg) -- CBS Corp.'s $1.8 billion purchase of Cnet Networks will prove a better bet than using the money to buy back shares, Chief Executive Officer Les Moonves said today

The acquisition is already adding to CBS's operating profit and has boosted the New York-based company's ability to distribute content and sell advertising on the Internet, Moonves said at a digital-media conference at University of Southern California in Los Angeles.

CBS is looking for ways to use television programs such as ``Survivor'' and the ``CSI'' crime shows to increase Internet revenue. The company's Web-related businesses, including Cnet, will produce sales of about $600 million and operating profit of $100 million in 2008, Moonves said.

``The job is to go where the money is,'' Moonves said. ``We think there is money in these premium content sites.''

CBS bought San Francisco-based Cnet, owner of sites including TV.com and GameSpot.com, in July. The main Cnet site offers technology news and reviews.

Moonves compared the Internet to cable television. Both, he said, allow advertisers to target specialized audiences.

``We view the Internet perhaps as our cable play,'' Moonves said.

The economic downturn has hurt advertising sales at the company's CBS network and television stations, Moonves said. The company, which gets about 70 percent of revenue from ads, reports third-quarter earnings on Oct. 28, he said.

``Frankly, earnings are not great,'' Moonves said. ``It is a difficult time and I'm aware of that.''

CBS said in July that companywide operating profit will be little changed this year, down from a previous forecast for 3 percent to 5 percent growth.

CBS, controlled by Sumner Redstone, rose 61 cents, or 6.9 percent, to $9.41 yesterday in New York Stock Exchange composite trading. The shares have dropped 65 percent this year.

To contact the reporter on this story: Michael White in Los Angeles at Mwhite8@bloomberg.net.