The effects of a merger deal between CNET and Ziff-Davis in July are rippling overseas. CNET announced Wednesday that it would buy Asiacontent.com's entire stake in CNET Asia, a joint venture the two companies had set up in March 1998, for $6 million in cash. The buyout would give CNET full ownership of the seven local CNET Web sites that Asiacontent.com had been developing.
Asiacontent.com would thereby lose the prestige of having big, foreign brand names under its roof. The company would be left with little more than a fledgling e-solutions business.
Ziff-Davis also runs sites across Asia, including a joint venture with a Softbank media entity in Japan, one of the most lucrative markets in the region. Asiacontent was not making significant inroads in Japan.
Adam Power, who heads CNET Networks in Asia, said, "ZD has lots of people on the ground here. When CNET in Asia came to us with a joint-venture partner, [we decided] that Asiacontent.com has done a great job, but there is an opportunity to mirror the success we had in the U.S. after the merger."
Asiacontent executives say they are glad to have the cash, but CNET's move casts some doubt on Asiacontent's ability to please its other high-profile partner, the online advertising company DoubleClick.
Asiacontent.com maintains that the joint venture it set up with DoubleClick Media in October 1999, DoubleClick Media, is a long-term relationship, in which DoubleClick would have to wait a decade to buy out Asiacontent's stake.
But the exclusive sales network arrangement that DoubleClick has with CNET Asia ends at the end of this year. According to CNET Networks' Power, Ziff-Davis has a wholly owned sales force in Asia. All sides are still exploring what to do next, he said, with no firm commitments as yet.
Asiacontent.com was one of the first Asian Internet companies to list on the Nasdaq. It closed at 69 cents on Tuesday in the U.S. before CNET's announcement.
Courtesy The Industry Standard