CNET Eases Up on Contract with Ziff Davis
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A contractual dispute that has been kicking around since October reached somewhat of a denouement Tuesday as CNET Networks has agreed to release the Web addresses of 11 Ziff Davis Media sites before the five-year contract expires.
CNET had inherited rights to operate the 11 sites through 2005 when it acquired ZDNet last July, but reports surfaced that a caveat in the CNET/ZDNet contract said that should ZDNet change hands, such a contract could be rendered null and void. As such, Ziff Davis has negotiated with CNET to have three years shaved off of the five-year content contract.
The dispute has its roots in the sale of the Ziff Davis print publications to an investment group led by Willis Steiner. Steiner licensed the right for ZDnet to exclusively publish the content in the print magazines. Steiner had the right to veto any transfer of those online publishing rights.
When CNET bought ZDNet last summer, CNET assumed it would retain the online publishing rights, but Steiner disagreed, causing a legal clash that now appears to be resolved. The compromise comes as Ziff Davis Media is gearing up its own Web site, over which Steiner will no doubt hold court.
Ironically, Ziff Davis Media published a separate release about the upcoming Web site, which it claims will be a "range of technology news and information sites targeting business technologists and the new American Internet consumer," and thus sounds like CNET.
In a company statement, Dan Rosensweig, president of CNET Networks, discussed what he termed a revaluation of the contract.
"We look forward to working with Ziff Davis Media for the term of our revised content licensing agreement, and will continue to produce and expand our own highly respected, award-winning and established global network of Web sites," Rosenweig said.
As for the particulars of the deal, Ziff Davis Media will regain the URLs and branded online content beginning April 2001. On March 1, Ziff Davis Media will share online rights to the content of the 11 magazines with CNET Networks and ZDNet for one year. The non-exclusive license agreement will then terminate on March 1, 2002.
The 11 publications included in the revised agreement are PC Magazine, Ziff Davis SMART BUSINESS for the New Economy, eWEEK, Interactive Week, Sm@rt Partner, Yahoo! Internet Life, FamilyPC, Electronic Gaming Monthly, Official U.S. PlayStation Magazine, Expert Gamer and Computer Gaming World.
Ziff Davis Media will continue to provide circulation and production services for CNET Networks' Computer Shopper magazine for up to two years. Ziff Davis Media will receive a termination fee in exchange for the elimination of all future online royalty obligations and obligations under the Computer Shopper agreement.
Ziff Davis and CNet are both competitors of internet.com, the parent of this web site.