CNet To Cut Almost 200 Jobs

By: Michael Liedtke, AP Business Writer (AP) Online technology news provider CNet Networks Inc. on Thursday said it will shed about 10 percent of its work force, or nearly 200 employees, as part of its latest effort to survive the high-tech meltdown that has dominated its coverage for nearly two years.

The San Francisco-based company's third major layoff in 16 months will pare its payroll to about 1,700 workers, still well above the nearly 700 people that CNet employed at the end of 1999.

Like many Internet companies, CNet expanded rapidly to capitalize on the dot-com craze that helped make its site one of the most widely read on the Web.

CNet remains a popular destination, attracting 23.2 million unique visitors in May to make it the 11th most trafficked on the Web, according to comScorer Media Metrix. But the company hasn't been able to make money since investors stopped pouring money into high-tech businesses that used to advertise heavily on the site.

After cashing in on some of its own dot-com investments to post a $417 million profit in 1999, CNet lost $2.5 billion during the past two years.

The bad news has continued so far this year with a first-quarter loss of $31 million. The company warned it will suffered another large loss in the second quarter, which will include $7 million to $8 million to cover the expenses of the reorganization announced Thursday.

Besides trimming its staff, CNet also is streamlining its divisions to "simplify our business model and reduce our cost structure," said Shelby Bonnie, the company's chief executive officer. Bonnie expects CNet to break even during the second half of the year, excluding certain accounting charges required by government regulators. Under Generally Accepted Accounting Principles, or GAAP, CNet will likely remain in the red.

Mirroring a common problem among dot-coms, CNet is still paying for its free-spending ways during the dot-com heyday.

For example, CNet had to absorb a $21.3 million charge for expensive offices that it abandoned late last year. The company expects these offices to remain vacant "for several quarters," according to a Securities and Exchange Commission filing.

The struggles have devastated CNet's stock, which peaked at $79.88 in late 1999. The company's shares gained 30 cents to close at $2.30 Thursday on the Nasdaq Stock Market.

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On The Net: http://www.cnet.com