CNET Networks Inc. is preparing to undergo what appears to have become the Internet sector’s new rite of passage: It is going under the knife. The Net media company revealed Tuesday that it plans to cut its global workforce by about 10 percent over the next few weeks as it eliminates duplication and pares away non-growth and unprofitable businesses.
The company also gave in to overall economic trends, lowering revenue forecasts for 2001.
“Because of the current slowdown affecting the economy and particularly the technology market, we have limited visibility and thus have lowered our 2001 revenue guidance by 17 to 20 percent,” said Shelby Bonnie, chairman and chief executive officer of CNET. “We have also moved to reduce our cost structure, a decision we did not make lightly. We feel these are the steps needed to focus the company squarely on our long-term goals. Our reduced guidance does allow for continued year-over-year revenue growth and increased profitability over year 2000 results, so our overall outlook is still very positive.”
CNET laid out the news along with its fourth quarter and year-end results for 2000. The results were in line with what analysts on Wall Street were expecting, with operating income (excluding goodwill amortization, merger expenses, realized gains (losses) on investments, and income taxes) of $13.2 million or 9 cents per diluted share. In Q4 1999 the company posted a pro forma net loss of $25.7 million, about 21 cents per share.
The quarter also marked the closing of CNET’s aquisition of arch-rival ZDNet.
“We had an outstanding year topped by a solid fourth quarter, during which the merger of CNET Networks and ZDNet became official,” Bonnie said. “In the fourth quarter we focused on integrating our businesses to leverage the power of our combined assets.”