===============================================================================

                              UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                              FORM 10-K

(Mark One)

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF1934

                  For the fiscal year ended December 31, 1998

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934


            For the transition period from __________ to __________

                   Commission file number 0-20939


                             CNET, INC.
          (Exact Name of registrant as specified in its charter)


                   Delaware                                13-3696170
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)   

      150 Chestnut Street                          
       San Francisco, CA                                 94111
    (Address of principal executive offices)          (Zip Code)

     Registrant's telephone number, including area code  (415) 395-7800

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                 Name of each exchange on which registered

None                                None


        Securities registered under Section 12(g) of the Exchange Act:

                              Title of class

                    Common Stock, $0.0001 par value


     Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.  Yes /X/   No / /

        Indicate by check mark if disclosure of delinquent filers 
pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) is 
not contained herein, and will not be contained, to the best of 
registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K 
or any amendment to this Form 10-K.  /X/  


     The aggregate market value of common stock held by non-affiliates, based on
the closing price at which the stock was sold, at March 12, 1999 approximated
$1.8 billion.

     The total number of shares outstanding of the issuer's common stock (its
only class of equity securities), as of March 12, 1999, was 34,767,270

        Information is incorporated by reference into Part III of this 
Form 10-K from the registrant's definitive proxy statement for its 
1998 annual meeting of stockholders, which will be filed pursuant to 
Regulation 14A under the Securities Exchange Act of 1934.



===============================================================================

<PAGE>

PART I

Item 1.  Business

General

CNET, Inc. (the Company, which may be referred to as we, us or 
our) is a leading media company that provides consumers with 
authoritative information online and on television regarding 
computers, the Internet and digital technologies.  We seek to use 
our editorial, technical, product database and programming 
expertise to engage consumers and attract advertisers.  Based on 
the volume of traffic over our branded online network, we believe 
that we have an established leadership position in our market.  We 
believe that our online network is the most frequently used source 
of technology information online, with an average of approximately 
8.2 million pages viewed daily during the fourth quarter of 1998.  

According to Media Metrix, we reached 12.2% of the online 
audience in the United States, or approximately 7.1 million unique 
users, during January 1999.  In addition, we deliver over 3.8 
million newsletter dispatches per week to subscribers of our 
newsletter services.  We earn revenues from a combination of:

* banner and sponsorship advertising on our online network
* advertising and sales lead-based compensation from our 
  recently introduced online shopping services
* advertising sales and licensing fees from our television 
  programming.

        CNET Online

 Through CNET Online, we produce a network of information and 
services offered under the CNET brand through CNET.com, our 
gateway for consumers interested information technology and 
technology products and services.  The primary channels accessible 
through CNET.com are: 

* Search.com
* Computers.com 
* Shopper.com
* News.com
* Builder.com
* Gamecenter.com
* Download.com.

 Through our shopping services, we help consumers decide what 
products to buy and where to buy them.  We believe that our 
shopping services are a highly efficient marketing channel for 
sellers of technology products who seek a targeted audience of 
potential buyers.  We began providing sales lead-based advertising 
services in September 1998 through Computers.com and Shopper.com.  
We believe that these services are among the industry's leading 
information resources for buyers of technology products.  

 Within our shopping services we help the consumer with the 
beginning phase of a product buying decision by providing high-
quality editorial content, including reviews and recommendations.  
We supplement this information by providing real-time pricing 
information from competing vendors covering more than 120,000 
products.  We also provide one-click access to these vendors, 
which enables the consumer to order the desired product from the 
supplier of their choice.  We believe that our online database of 
products and prices is the largest publicly-accessible computer 
product database in the world.  In the fourth quarter of 1998, the 
first quarter that we offered these services, we estimate that we 
generated approximately $80 million in sales to our 70 
participating merchants.  We generated an average of 90,000 leads 
per day to Internet merchants during December 1998.

 CNET Television

 Through CNET Television, we seek to strengthen the CNET brand 
and complement CNET Online.  CNET Television includes the Digital 
Domain, which is a two-hour programming block broadcast on the USA 
Network and the Sci-Fi Channel.  The Digital Domain includes:

* CNET Central (technology news)
* The Web (Internet and online services) 
* Cool Tech (consumer-oriented technology products)
* The New Edge (future technologies).  

 We also produce TV.com (technology products and news) and Tech 
Reports (90-second technology inserts for local news programs).  
We broadcast CNET Television programming to more than 75 million 
households.  CNET Television is syndicated nationally and in 40 
international markets. 

 Our Other Ventures

 We currently own approximately 81% of SNAP! LLC ("snap."), a 
free Internet directory, search and navigation portal service 
controlled by NBC Multimedia, Inc.  NBC Multimedia currently owns 
19% of snap., but has an option to increase its ownership to 60%.  
As a result of this option, we effectively own approximately 40% 
of snap.  In addition to snap., we own approximately 9% (2.3 
million shares) of Vignette Corporation (Nasdaq: VIGN), a 
manufacturer of Web publishing software, and 16% of BuyDirect.com, 
Inc., a Web retailer of downloadable software.  BuyDirect.com 
recently entered into a merger agreement with beyond.com. This 
merger, if completed, would result in our owning approximately 
800,000 shares of beyond.com (Nasdaq: BYND).

 We are a Delaware corporation.  Our principal executive offices 
are located at 150 Chestnut Street, San Francisco, California 
94111, and our telephone number is (415) 395-7800.  We were 
incorporated in 1992.  We launched CNET.com in June 1995 and since 
that time we have continued to build our online content and 
services.

 Our Recent Developments

* Agreement with America Online.  On February 9, 1999, we 
announced an agreement with America Online, Inc. whereby 
we will become the exclusive provider of computer 
hardware and software buying guides on the AOL service 
and on AOL.com. We will also serve as the primary 
provider of computer buying guides on CompuServe, 
Digital City, AOL Hometown and certain AOL international 
properties.  In addition to buying guides, we will 
provide or create a variety of co-branded, computing-
oriented content areas.  Under the terms of the 
agreement, AOL will receive guaranteed payments from us 
of $14.5 million over approximately 27 months.  We 
believe that the agreement provides us with the 
opportunity to extend substantially the reach of our 
computer-oriented information and shopping services to a 
new audience of consumers.

* Acquisition of NetVentures.  On February 16, 1999, we 
acquired NetVentures, Inc. in a stock-for-stock exchange 
valued at approximately $12.5 million.  NetVentures owns 
and operates ShopBuilder (www.shopbuilder.com), an 
online store-creation system.  With the acquisition, we 
intend to develop the capacity to enable small and 
midsize computer manufacturers and resellers of 
unbranded computer systems, known in the industry as 
"white box" PCs, to build online stores and use our 
online sales channel to market products directly to 
customers.  In addition, we expect to create the 
Internet's first marketplace for unbranded PCs, sales of 
which make up an estimated 30% of the $75 billion U.S. 
PC market, and expand our Shopper.com service by 
incorporating a large segment of products and services 
that to date have not been readily available online.

* Acquisition of AuctionGate Interactive.  On February 19, 
1999, we acquired AuctionGate Interactive, Inc. in a 
stock-for-stock exchange valued at approximately $6.5 
million.  AuctionGate owns and operates AuctionGate.com, 
an auction site specializing in computer products.  With 
the acquisition, we hope to expand our role as an 
Internet marketplace linking computer buyers and 
sellers.  The acquisition also introduces a potential 
new revenue stream for us, as participating sellers in 
the new auction service will be charged listing fees.  
The new auction site will allow individual customers, 
resellers and manufacturers to auction their used, 
refurbished, end-of-line and surplus items.  We intend 
to provide links to the auction service at relevant 
areas across our Internet network.

* Agreement with Jenesys.  On February 26, 1999, we 
acquired the assets of Winfiles.com, a leading software 
downloading service, from Jenesys LLC for a total 
purchase price of $11.5 million, payable in cash in two 
installments of $5.75 million.  We believe that this 
acquisition will increase the market reach of our CNET 
Download.com service.

* Stock Split.  On March 8, 1999, we effected a 2-for-1 
split of our common stock that was distributed in the 
form of a stock dividend to our common stock holders as 
of February 22, 1999.

* 144A Offering.  On March 8, 1999, we completed a private 
placement of $172.9 million of our 5% convertible 
subordinated notes.  The notes are due on March 1, 2006, 
and are convertible, at the option of the noteholder, 
into shares of our common stock at a conversion price of 
$74.8125 per share.

* Acquisition of KillerApp.  On March 22, 1999, we 
acquired KillerApp Corporation in a stock-for-stock 
exchange valued at approximately $46 million.  KillerApp 
owns and operates KillerApp.com an online comparison 
shopping service for computers and consumer electronic 
products.  

 Industry Background

 We believe that there is a significant opportunity for a 
trusted, value-added on-line intermediary to connect buyers and 
sellers of technology products online.  Buyers of technology 
products typically research product capabilities and compare 
prices before making a purchase decision.  Due to its interactive 
nature, the Web is emerging as a medium that allows buyers of 
technology products, both individuals and businesses, to complete 
complex product and price comparisons on a real-time basis.

 We believe that by connecting sellers of technology products 
with buyers online, we address a significant market.  According to 
Jupiter Communications, PC hardware and software products 
represent the largest e-commerce category on the Web.  Purchases 
of PC hardware and software are expected to constitute 45% of the 
estimated $8 billion projected to be spent by consumers online in 
1999.  Forrester Research estimates that 46%, or approximately $50 
billion, of the estimated $108 billion projected to be spent by 
businesses online in 1999 will be spent on computers and 
electronics.

 The revenue opportunities that we see emerging on the Internet 
combine certain elements of traditional offline businesses such as 
print, television, direct marketing and point-of-purchase 
marketing.  We believe that there is a growing recognition among 
manufacturers and marketers of technology products and services of 
the advantages and increasing importance of reaching and selling 
to their customers online.

 Strategy

 Our objective is to be the largest online computer and 
technology network and to create a significant online marketplace 
connecting buyers and sellers of technology products and services.  
Through the end of 1998, we have focused on improving and 
broadening our existing content and commerce services.  In early 
1999, we began a program of strengthening and expanding these 
services through selective content and commerce focused 
acquisitions.

* We seek to provide compelling content for our users

 We seek to provide current, comprehensive and 
entertaining editorial content throughout our online 
network and television programs.  Our goal is to expand 
our audience of Internet users and television viewers. 

* We seek to further develop market awareness and 
recognition of our brand

 We believe that further development of the CNET brand is 
a critical aspect of our efforts to attract and expand 
our Internet and television audiences.  We seek to 
promote and reinforce our brand by building on the 
strength of our online network through our television 
programming and through increased marketing efforts.

* We seek to build on our television programming experience

 In addition to using our television programming to 
promote the CNET brand, we believe that our experience in 
developing and producing television programming 
complements and strengthens our ability to develop 
high-quality Internet content.  We believe that the 
Internet as a communication medium is similar to a hybrid 
between television and print and believe that quality 
Internet sites should be produced as multimedia 
offerings, rather than being written like printed 
publications. 

* We seek to create value for manufacturers and marketers 
of technology products and services

 We believe that our Internet users, who have an interest, 
ability and willingness to obtain information and 
purchase products over the Internet, are generally an 
attractive audience for technology manufacturers and 
marketers.  We will continue our efforts to create new 
marketing programs for manufacturers and marketers and to 
provide an efficient means to connect buyers and sellers.

* We seek to create value for our users

 We will continue to evaluate acquisitions, which assist 
in expanding and strengthening our online content and 
commerce services.  We are continually exploring 
opportunities to leverage our brand, infrastructure and 
existing audience.  For example, recent acquisitions of 
NetVentures  (offers creation of online technology stores 
within the CNET network), AuctionGate (allows 
individuals, manufacturers and resellers to auction used, 
refurbished and surplus technology products), WinFiles 
(an extension of the downloadable software channel) and 
KillerApp (an addition to our shopping services) provides 
us with the opportunity to enter new commerce markets and 
strengthen our leadership within the downloadable 
software channel.  

* We seek to utilize our technology to enhance content

 We seek to capitalize on available technology to create 
compelling Internet content, to improve the speed and 
performance of our Internet network and to enhance the 
user's experience through customization and 
personalization of content.  We strive to improve the 
attractiveness and usefulness of our Internet content by 
using the latest software tools and supporting the latest 
technology standards. 

 CNET Online Network

 All of our network channels are offered under the CNET brand 
and provide content and commerce services to users interested in 
information technology and the Internet.  We attracted over 7 
million unique users in January 1999 according to Media Metrix.


     We currently operate the following network channels:

<TABLE>
<CAPTION>
                 LAUNCH DATE    DESCRIPTION
                 -----------    ------------
<S>            <C>            <C>
CNET.COM         June 1995         The Gatewary to our network, offers news, product reviews,
                                   feature stories, interviews and other editorial
                                   content about information technology and the Internet.

SEARCH.COM       March 1996        Search and navigational channel focused on providing
                                   smart searches forcused on computers and technology 
                                   information.

NEWS.COM         September 1996    Editorial channel featuring the latest news and
                                   analysis about the Internet and the
                                   computer industry.

DOWNLOAD.COM     October 1996      Editorial channel, search engine
                                   and download facility focused on software.

GAMECENTER.COM  November 1996      Editorial channel featuring reviews and
                                   information about popular computer games and
                                   links to downloadable games.

COMPUTERS.COM  November 1997       Computer products information channel focused on what-to buy
                                   product reviews and information combined with broad product
                                   listings, updated daily with real-time pricing and where-
                                    to-buy links to manufacturers, retailers and resellers.

BUILDER.COM    November 1997       Product review and industry news for the Web building community.

SHOPPER.COM    June 1998           Broad product listings updated daily with real-time pricing
                                   with where-to-buy links to manufacturers, retailers and 
                                  resellers

</TABLE>

 CNET.COM.  CNET.com was launched in June 1995 and serves as the 
gateway for our network.  We believe that CNET.com has become a 
leading source on the Internet of news, reviews and other 
editorial content related to information technology and the 
Internet. 

 SEARCH.COM.  Launched in March 1996, Search.com provides our 
users search functionality focused on providing smart search 
results related to computer and technology information.

 NEWS.COM.  Launched in September 1996, News.com is an editorial 
site focused exclusively on providing daily coverage of breaking 
news and scheduled events, in-depth analyses and original 
reporting related to the computer industry, the Internet and 
computer industry personalities.  News.com is designed to provide 
broad coverage of these industries and to appeal to information 
technology professionals, as well as industry participants, 
corporate information systems officers and members of the 
financial community.  The channel competes with weekly computer 
trade publications by offering more current news and information 
and by integrating text, audio and video to deliver high quality 
content. 

 As a complement to our daily news, we produce daily audio 
reports on the latest digital news.  Using Progressive Networks' 
RealAudio software (which users can download through our Internet 
channels), users can hear the voices of the newsmakers themselves 
on the issues of the day, such as a U.S. Congressman responding to 
the morning's developments on telecommunications reform or the 
president of a technology company announcing a new Internet 
product.

 DOWNLOAD.COM.  Launched in October 1996, Download.com provides 
search, browse and download software. Download.com is an organized 
directory of approximately 14,000 files which have descriptions 
and can be sorted by the user to find the most popular titles in a 
given category Download.com offers a search engine for users 
trying to find an ftp site for a specific title across a database 
encompassing hundreds of thousands of software titles.

 GAMECENTER.COM.  Launched in November 1996, Gamecenter.com 
provides the latest news and information about popular computer 
games and serves online game players with current information and 
interactive product reviews. Gamecenter.com also provides links to 
popular downloads of the newest games, tips and tricks, and 
information for connecting with other game players.

 COMPUTERS.COM.  Launched in November 1997, Computers.com 
focuses on providing users the broadest and most in-depth source 
of real-time computer products information in a convenient, easy-
to-use format. Computers.com is organized intuitively into 
categories including: desktops, servers, notebooks, modems, 
monitors, memory, storage, printers, graphics, cameras and 
handhelds.  Within each category, Computers.com gives users the 
ability to customize hardware configurations feature-by-feature 
including by price and manufacturer.  

 During the customization process, Computers.com provides access 
to industry-wide product research for improved decision making 
prior to purchase.  Throughout the customization process each user 
has access to Computers.com's proprietary, comprehensive database 
of product listings by price and manufacturer which is updated 
many times each day.  This feature gives users an efficient means 
of comparing products.  At the point of purchase, Computers.com 
helps connect buyers with sellers by providing buyers with an 
easy-to-use, extensive database of where-to-buy listings of 
product manufacturers, retailers and resellers.

 BUILDER.COM.  Launched in November 1997, Builder.com is the 
Internet's central source for product reviews and industry news 
for the Web building community, including designers, developers 
and producers.  The channel features reviews of Web development 
tools, industry and technology news and downloadable software for 
Web production.  Builder.com also offers interactive forums. 

 SHOPPER.COM.  Launched in June 1998, Shopper.com is a leading 
information resource for buyers of technology products. 
Shopper.com contains real-time pricing information from competing 
vendors covering more than 120,000 products. Shopper.com, similar 
to Computers.com, provides one-click access to these vendors 
which enables the user to order the desired product from the 
supplier of their choice.  We believe that our online database of 
products and prices is the largest publicly-accessible computer 
product database in the world.

 CNET Television

 We produce television programming for viewers interested in 
information technology and the Internet.  Our television 
programming is intended to complement and strengthen our Internet 
operations by building brand awareness, attracting new users and 
generating content that can also be presented through the 
Internet.  Four of the Company's programs are carried nationally 
on cable television through USA Networks and The Sci-Fi Channel, 
both of which are owned by USA Networks.  One of our programs is 
aired nationally on broadcast television.  We produce all of our 
programs in-house, in our San Francisco headquarters studio.  We 
employ a permanent staff of producers, researchers, editors and 
directors to create our programs and hire additional freelance 
camera crews and freelance producers as appropriate. 

 Digital Domain.  Four of our programs, CNET Central, The Web, 
Cool Tech and The New Edge, are produced in a two hour programming 
block as The Digital Domain.  The Digital Domain is broadcast two 
times per week on The Sci-Fi Channel and once per week on USA 
Networks.  Additionally, CNET Central is aired once per week 
locally on KPIX-TV, the San Francisco CBS affiliate.  The USA 
Network reaches over 75 million cable television homes, and The 
Sci-Fi Channel (an affiliate of USA Networks) reaches over 52 
million cable homes.  Based on Nielsen Ratings, the four programs 
reached an average weekly audience of 900,000 viewers during the 
fourth quarter of 1998.

 CNET Central.  Launched in April 1995 as our first television 
program, CNET Central covers the latest in news, features and 
human interest stories relating to information technology and the 
Internet.  The series includes news updates from our news staff 
and demonstrations of new and interesting Internet sites.  CNET 
Central also covers new product introductions, such as the release 
of new games, applications and tools, and related product reviews 
and demonstrations.  We encourage viewers of the program to visit 
our Internet channels for more detailed information and reviews 
and to download available software.

 The Web.  Launched in July 1996, The Web is a half-hour long 
show focused on the Internet and online services and is similar in 
style to CNET Central, but with increased use of in-studio 
interviews and demonstrations.  The Web shows viewers the hottest 
Web sites, explains the latest tools and covers the Internet 
culture.

 The New Edge.  Launched in July 1996, The New Edge is a 
half-hour magazine format show that focuses on new technological 
breakthroughs and how they will change our lives.  Each program 
contains four segments that cover topics from action/adventure and 
entertainment, to the healthcare industry and computer science.

 Cool Tech.  Launched in July 1998, Cool Tech delivers valuable 
consumer-oriented information about the newest personal technology 
products.

 TV.COM.  Launched in September 1996, TV.COM is a half-hour 
program that offers the latest news, gossip and interviews 
relating to information technology and the Internet.  We 
distribute TV.Com under a syndication agreement with Trans World 
International.  TV.COM airs nationally on broadcast television in 
over 115 markets.  During the fourth quarter of 1998, TV.COM 
achieved an average weekly audience of approximately 600,000 
viewers.

 Using material from our tape library, we also produce 90-second 
inserts called Tech Reports, about information technology and the 
Internet for syndication to local news operations around the 
country. We design these inserts to help promote the CNET brand.  
They typically feature a host from CNET Central standing in the 
CNET studio in front of the CNET logo.  The inserts are syndicated 
into 34 local markets. 

 Agreement with USA Networks

 From April 1, 1995 through June 30, 1996, USA Networks carried 
CNET Central nationally.  Under our initial agreement, we paid USA 
Networks a monthly fee of approximately $147,000 and received the 
right to sell all of the available advertising during the program 
and to retain all advertising revenues.  In connection with this 
agreement, we issued USA Networks a warrant to purchase 1,033,500 
shares of our common stock at an exercise price of $1.21 per 
share.  The warrant was scheduled to vest in eight equal quarterly 
installments beginning July 1, 1996 if USA Networks continued to 
carry CNET Central in accordance with the agreement.  USA Networks 
exercised the warrant with respect to all 1,033,500 shares in July 
1998. 

 Effective July 1, 1996, we amended the agreement.  Under the 
amended agreement, USA Networks licensed the right to carry CNET 
Central, The Web and The New Edge as the two hour programming 
block called the Digital Domain, for an initial one year term and 
became entitled to sell all available advertising on the Digital 
Domain.  In exchange, USA Networks agreed to pay a fee which was 
limited to our costs of producing the three programs, up to a 
maximum of $5.2 million for the initial one year term.    
Effective July 1, 1997, the agreement was extended for an 
additional year and fees payable by USA Networks were increased to 
a maximum of $5.5 million.  In June 1998, USA Networks extended 
the agreement with respect to the Digital Domain and added a 
fourth program, Cool Tech, for an additional year (until June 30, 
1999), during which the fee payable to us is limited to the costs 
of producing such programs, subject to a maximum amount of $5.9 
million.  USA Networks is not required to carry any of the 
programming that it purchases from us under the agreement.  
Although we are in negotiations with USA Networks to extend our 
relationship, we cannot assure you that the contract with USA 
Networks will be extended after June 30, 1999.  If USA Networks 
chooses not to carry our television programming, we cannot assure 
you that we would be able to obtain another source of 
distribution.  If we are unable to secure and maintain 
distribution for our television programming on acceptable 
commercial terms, we will be unable to achieve the strategic 
objectives of our television programming, which would have a 
material adverse effect on our business, prospects, financial 
condition and operating results. 

 Pursuant to the amended agreement, we also agreed to modify the 
vesting provisions of the warrant previously granted to USA 
Networks.  Under the amended agreement, the warrant became 
exercisable with respect to 413,400 shares of common stock (40% of 
the total) on July 1, 1996.  The warrant became exercisable with 
respect to an additional 310,050 shares (30% of the total) on 
June 30, 1997, based on USA Networks' transmission of the three 
programs during the first year of the agreement.   The warrant 
became exercisable with respect to the remaining 310,050 shares 
(30% of the total) on June 30, 1998.  In connection with the 
extension of the agreement in January 1997, we agreed that the 
warrants will vest in full on December 31, 2006, to the extent 
they have not previously vested.  USA Networks exercised the 
warrant with respect to all 1,033,500 shares in July 1998.

 During the initial one-year term of the amended agreement, 
which ended on June 30, 1998, we agreed to pay USA Networks a fee 
of $750,000 for the right to cross-market our Internet channels on 
our television programs produced for USA Networks.  During the 
1998-1999 year extension, we will again pay a fee of $750,000 for 
the right to continue these cross-marketing activities.  We report 
these fees as marketing expenses.  USA Networks accounted for 
approximately 10% of our total revenues during 1998. 

 Sales and Marketing

 At December 31, 1998, we had a sales and marketing staff of 99 
full-time employees located in our headquarters in San Francisco, 
California, and in a sales office in New York City. 

 We earn our online revenues from the sale of advertising by our 
direct sales organization and from lead-based compensation from 
our shopping services.  We provide discounts for multiple package 
purchases and for longer-term agreements.  We also provide a 
number of services to marketers, including advertising response 
tools and advertising targeting.  Beginning March 1, 1998, we 
began to use our direct sales organization to sell advertisements 
on TV.COM.

 We design our marketing activities to promote the CNET brand 
and to attract consumers to our online network and television 
programming.  We currently retain a portion of our inventory of 
Internet advertising banners on certain of our channels to promote 
our own content and commerce services.  We also use our weekly 
online dispatch newsletters to promote and cross-market our 
services.  Our marketing programs also include participation in 
trade shows, conferences, speaking engagements, print, television, 
radio and Internet advertising campaigns and programs to generate 
exposure in trade magazines and general interest magazines and 
newspapers.

 Technology

 We maintain technology offices in Bridgewater, New Jersey and 
San Francisco, California, which focus on designing, developing, 
modifying and maintaining proprietary and third-party tools to 
manage and improve our Internet channels and advertising 
services.  We focus our efforts to develop Internet channel 
management technologies on: 

* improving the speed and reliability of our Internet 
  network 
* creating publishing tools for Internet content 
* developing advertisement tracking and management tools 
* building an infrastructure for performing advanced 
  traffic and user analysis. 
* building commerce tools for our shopping service 

 Using our internally developed publishing tools, we are able 
to separate our Internet content, which resides in databases, 
from the presentation or formatting of the content on the 
Internet.  This separation of content and presentation allows us 
to quickly incorporate new presentation technologies into our 
channels and to customize the presentation of content.  In 
addition, this technology also speeds the production process by 
enabling our editorial staff of journalists and editors to enter 
information quickly and to post time-sensitive material with 
minimal lead time.  We use a modified version of the commercial 
Accipiter AdManager system that allows us to customize the 
delivery of advertisements by placing advertisements on specific 
Internet pages based on the user's method of Internet access and 
hardware and software configuration.  We have also developed an 
Advertising Response and Monitoring program, which allows 
advertisers to track and test the effectiveness of their 
Internet-based marketing programs.

 In July 1996, we invested $512,000 in cash and transferred 
rights to certain of our proprietary site content management 
software systems to Vignette Corporation ("Vignette"), an Austin, 
Texas, based software development company, in exchange for a 
minority equity interest in Vignette.  Vignette is marketing an 
Internet site management system to operators of large Internet 
sites, such as those that we operate.  As a result of our 
investment in Vignette, certain site management technologies that 
were previously proprietary to us are now available to our 
competitors.

 Competition

 Competition among content and service providers is intense and 
is expected to increase significantly in the future.  Our 
Internet and television operations compete against a variety of 
firms that provide content through one or more media, such as 
print, broadcast, cable television and the Internet. As with any 
other content or service provider, we compete generally with 
other content and service providers for the time and attention of 
consumers and for advertising revenues.  To compete successfully, 
we must provide sufficiently compelling and popular Internet 
content and service and television programming to attract 
Internet users and television viewers and to attract advertisers 
hoping to reach such users and viewers.  Within the content niche 
of information technology and the Internet, we compete in 
particular with the publishers of computer-oriented magazines and 
Internet services, such as: 

* Ziff-Davis Publishing Company 
* International Data Group 
* CMP Publications

 and with television companies that offer computer-related 
programming, such as: 

* the Cable News Network 
* the Discovery Channel 
* Jones Computer Network 
* Mind Extension University
* MSNBC, a joint venture between Microsoft Corporation and
  General Electric's NBC Television Network.  

 Each of these competitors also offers one or more Internet sites 
with content designed to complement its magazines or television 
programming. 

 In the overall market for Internet users, we compete with other 
Internet content and service providers, including Web directories, 
search engines, shareware archives, sites that offer original 
editorial content, commercial online services, e-commerce sites 
and solution providers, and sites maintained by Internet service 
providers.  These competitors include:

* Excite, Inc.
* Infoseek Corporation 
* Lycos, Inc.
* Microsoft Corporation
* Netscape Communications Corporation
* The Walt Disney Company
* Time Warner, Inc. 
* Yahoo! Inc.
* America Online, Inc.
* eBay Inc.
* Amazon.com, Inc.  

 The market for Internet content and services is new, intensely 
competitive and rapidly evolving.  There are minimal barriers to 
entry, and current and new competitors can launch new sites at 
relatively low cost.  In addition, we compete for the time and 
attention of Internet users with thousands of non-profit Internet 
sites operated by individuals, government and educational 
institutions.  Existing and potential competitors also include 
magazine and newspaper publishers, cable television companies and 
startup ventures attracted to the Internet market.  Accordingly, 
we expect competition to persist and intensify and the number of 
competitors to increase significantly.  As we expand the scope of 
our Internet content and services, we will compete directly with a 
greater number of Internet sites, including other online retailers 
and direct sellers of computer products and other media companies.  
Because the operations and strategic plans of existing and future 
competitors are undergoing rapid change, it is difficult for us to 
anticipate which companies are likely to offer competitive 
services in the future.  We cannot assure you that our Internet 
operations will compete successfully. 

 With respect to our television operations, we compete directly 
with established broadcast and cable television networks and with 
other distributors and producers of programming about information 
technology and the Internet.  We also face potential competition 
from a wide range of existing broadcast and cable television 
companies and from joint ventures between television companies and 
computer-oriented magazine publishers or computer hardware or 
software vendors, any of which could produce television 
programming that competes directly with our television 
programming.  For example, Ziff-Davis recently launched and is 
operating a 24 hour cable television network focused on 
technology.

 Employees

 As of December 31, 1998, we had a total of 491 employees, all 
of whom are based in the United States.  Of the total:

*  262  were involved in our Internet operations 
*   99  were engaged in marketing and sales 
*   53  were involved in television production
*   21  provided creative services for our Internet and 
        television operations 
*   56  were in administration and finance.  

 Seven of our employees, who consist of our on-air television 
talent, are represented by a labor union, the American Federated 
Television and Radio Artists.  We have not experienced any work 
stoppages and we believe that our relations with our employees is 
good.

 Intellectual Property

 Our success and ability to compete is dependent in part on the 
protection of our original content for the Internet and television 
and on the goodwill associated with our trademarks, trade names, 
service marks and other proprietary rights.  We rely on copyright 
laws to protect the original content that we develop for the 
Internet and television, including our editorial features and the 
various databases of information that we maintain and make 
available through our Internet channels.  In addition, we rely on 
federal trademark laws to provide additional protection for the 
appearance of our Internet channels.  A substantial amount of 
uncertainty exists concerning the application of copyright and 
trademark laws to the Internet, and we cannot assure you that 
existing laws will provide adequate protection for our original 
content or our Internet domain names.  In addition, because 
copyright laws do not prohibit independent development of similar 
content, we can offer no assurance that copyright laws will 
provide any competitive advantage to us. 

 We own a federal trademark registration for the name "CNET" 
for computer services, namely, providing databases featuring 
information in the general fields of entertainment and education.  
We also own two other federal trademark registrations for the name 
"CNET" for use in connection with certain software applications 
and consulting services that we acquired by assignment.  Further, 
we own a federal trademark registration for the CNET logo in 
connection with providing entertainment services over electronic 
communication networks.  We have also filed applications to 
register the names CNET.com, Shareware.com, Search.com and 
Download.com, but no federal registrations have been granted for 
such names or marks.  We also claim common law protection on 
certain names and marks that we have used in connection with our 
business activities.  Two third parties objected to our 
application to register the service mark "CNET: The Computer 
Network," and, in connection with one of these objections, we 
agreed not to use such mark for any real estate or insurance 
related services.  We are also a defendant in pending litigation 
concerning our use of the name "Snap".  We cannot assure you that 
we will be able to secure registration for any of our marks. We 
have also invested significant resources in purchasing Internet 
domain names for existing and potential Internet sites from the 
registered owners of such names.  The application of federal 
trademark law to the protection of Internet domain names is not 
certain, and we cannot assure you that we will be entitled to use 
such domain names. 

 We rely on trade secret and copyright laws to protect the 
proprietary technologies that we have developed to manage and 
improve our Internet channels and advertising services.  We 
cannot assure you that such laws will provide sufficient 
protection to us, that others will not develop technologies that 
are similar or superior to ours, or that third parties will not 
copy or otherwise obtain and use our technologies without 
authorization.  We have filed patent applications with respect to 
certain of our software systems, methods and related 
technologies.  Although two of these applications have matured 
into U.S. patents, we can offer no assurance that any other 
applications will be granted.  In addition, we can offer no 
assurance that any patents will not be challenged, invalidated or 
circumvented, or that the rights granted thereunder will provide 
a competitive advantage for us.  We also rely on certain 
technology licensed from third parties.  We may be required to 
license additional technology in the future for use in managing 
our Internet channels and providing related services to users and 
advertising customers.  Our ability to generate revenues from 
Internet commerce may also depend on data encryption and 
authentication technologies that we may be required to license 
from third parties.  We cannot assure you that these third party 
technology licenses will be available or will continue to be 
available to us.  The inability to enter into and maintain any of 
these technology licenses could have a material adverse effect on 
our business, prospects, financial condition and operating 
results.

 Policing unauthorized use of our proprietary technology and 
other intellectual property rights could entail significant 
expense and could be difficult or impossible, particularly given 
the global nature of the Internet and the fact that the laws of 
other countries may afford us little or no effective protection of 
our intellectual property.  In addition, we cannot assure you that 
third parties will not bring claims of copyright or trademark 
infringement against us or claim that our use of certain 
technologies violates a patent.  We anticipate an increase in 
patent infringement claims involving Internet-related technologies 
as the number of products and competitors in this market grows and 
as related patents are issued.  Further, we cannot assure you that 
third parties will not claim that we have misappropriated their 
creative ideas or formats or otherwise infringed upon their 
proprietary rights in connection with our Internet content or 
television programming.  Any claims of infringement, with or 
without merit, could:

* be time consuming to defend
* result in costly litigation
* divert management attention 
* require us to enter into costly royalty or licensing 
  arrangements 
* prevent us from using important technologies or methods.

 Any of the foregoing could have a material adverse effect on our 
business, prospects, financial condition and operating results.

 Government Regulation

 Although there are currently few laws and regulations directly 
applicable to the Internet, a range of new laws and regulations 
have been proposed, and could be adopted, covering issues such as 
privacy, copyrights, obscene or indecent communications and the 
pricing, characteristics and quality of Internet products and 
services.  The federal government and a number of states have 
adopted or proposed legislation which, among other things, seek to 
impose criminal penalties on anyone that distributes "obscene" or 
"indecent" material over the Internet.  Although certain 
provisions of such legislation have been and may be subject to 
challenge on constitutional grounds, the manner in which any such 
legislation or future federal and state laws will ultimately be 
interpreted and enforced and their effect on our operations cannot 
yet be fully determined.  Any such laws could subject us to 
substantial liability.  For example, we do not and cannot 
practically screen the contents of the various Internet sites that 
are indexed or accessible through our directories and search 
engines.  Restrictive laws or regulations could also dampen the 
growth of the Internet generally and decrease the acceptance of 
the Internet as an advertising medium, and could, thereby, have a 
material adverse effect on our business, prospects, financial 
condition and operating results.  Application to the Internet of 
existing laws and regulations governing issues such as property 
ownership, libel and personal privacy is also subject to 
substantial uncertainty. 

 The television industry is subject to extensive regulation at 
the federal, state and local levels.  In addition, legislative 
and regulatory proposals under consideration by Congress and 
federal agencies may materially affect the industry and our 
ability to obtain distribution for our television programming. 

 We can offer no assurance that current or new government laws 
and regulations, or the application of existing laws and 
regulations, will not subject us to significant liabilities, 
significantly dampen growth in Internet usage, prevent us from 
obtaining distribution for our television programming, prevent us 
from offering certain Internet content or services or otherwise 
have a material adverse effect on our business, prospects, 
financial condition and operating results.

 Item 2.  Properties

 We lease approximately 109,000 square feet of office and studio 
space in various facilities in San Francisco, California, that 
house our principal administrative, finance, sales, marketing, 
Internet and television production operations.  In addition, we 
lease approximately 19,000 square feet of office space in 
Bridgewater, New Jersey, that is used primarily by technology 
personnel, and approximately 9,000 square feet of office space in 
New York City, that is used primarily by sales personnel.  We also 
have short term operating leases in Irvine, California, Cambridge, 
Massachusetts and Chicago, Illinois.

 Our San Francisco headquarters facility and television 
production studio is approximately 54,000 square feet and is 
leased through December 31, 2004, with a five year renewal 
option.  Our additional San Francisco offices are located in two 
buildings under three leases, ranging in size from 11,000 to 
32,000 square feet and expire between January 2001 and September 
2004.  In June 1998, we assigned a lease of approximately 97,000 
square feet to snap., however, we remain primarily liable under 
the terms of the lease.  We believe that the general condition
of our leased real estate is good and that our facilities
are generally suitable for the purposes for which they 
are being used.  We anticipate that we will be required to lease 
additional facilities during 1999 to accommodate anticipated 
growth.

 Item 3.  Legal Proceedings

 In November 1998, Snap Technologies commenced an action 
against us in the U.S. District Court for the Northern District 
of California alleging trademark infringement and related claims 
arising from the name of the snap., portal service.  The 
plaintiffs seek injunctive relief and unspecified damages.  This 
proceeding is in its initial stages.  We intend to defend this 
case vigorously, but we cannot assure you that the name of the 
snap., portal service will be able to continue or on what terms 
it will be able to continue.

 We are from time to time a party to other legal proceedings 
that arise in the ordinary course of business.  There is no 
pending or threatened legal proceeding to which we are a party 
that, in our opinion, is likely to have a material adverse effect 
on our business, prospects, financial condition and operating 
results.

 Item 4.  Submission of Matters to a Vote of Security Holders

 None.



 PART II

 Item 5.  Market for Registrant's Common Equity and Related 
Stockholder Matters

      Our common stock is traded on the National Market System of 
the Nasdaq Stock Market ("Nasdaq") under the symbol "CNET".

      On July 2, 1996, we completed our initial public offering 
(the "IPO").  The following table sets forth the ranges of high 
and low trading prices of the common stock for the quarterly 
periods indicated, as reported by Nasdaq. The prices in the table 
have been adjusted to reflect a 2-for-1 split of our common stock 
that was distributed on March 8, 1999 in the form of a stock 
dividend to holders of our common stock as of February 22, 1999. 


                                               High    Low
                                             -------  -------
     Year ended December 31, 1996:

     Third quarter                          $10.25    $6.00
     Fourth quarter                         $14.50    $7.09


     Year ended December 31, 1997:
     First quarter                          $17.88    $9.38
     Second quarter                         $17.81    $7.88
     Third quarter                          $23.25    $12.13
     Fourth quarter                         $19.88    $9.66


     Year ended December 31, 1998:
     First quarter                          $20.07    $11.69
     Second quarter                         $35.50    $12.63
     Third quarter                          $37.00    $15.50
     Fourth quarter                         $33.00    $14.50

        At March 12, 1999, the closing price for our common stock
as reported by Nasdaq, was $86.25, and the approximate 
number of holders of record of the Company's common stock was 226.

       We have never declared or paid a cash dividend on our common stock.
We intend to retain any earnings to cover operating losses and working 
working capital fluctuations and to fund capital expenditures and
expansion.  We do not anticipate paying cash dividends on our common
stock in the foreseeable future.


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

         The following table sets forth selected consolidated financial data
and other  operating  information  of the Company.  The financial  data and
operating  informationdo not purport to indicate results of operations as of
any future date or for any future period.  The financial data and operating
information is derived from our consolidated financial statement and should be
read in  conjunction  with the  consolidated financial statements, related 
notes and other financial  information included herein.

  (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                            Fiscal Year Ended
                                ---------------------------------------------------------------------
                                       1,998          1,997          1,996         1,995       1,994
                                -------------  -------------  -------------  ------------  ----------
<S>                             <C>            <C>            <C>            <C>           <C>
Consolidated Statement of Operations Data:

Total revenues                       $56,432        $33,640        $14,830        $3,500       --
Gross profit (deficit)                26,400          6,923           (503)       (2,133)      --
Total operating expenses*             23,870         41,060         15,032         6,337       2,772
Operating income (loss)                2,530        (34,138)       (15,535)       (8,470)     (2,772)
Total other income (expense)              70          9,410         (1,413)         (137)        (54)
Net income (loss)                      2,600        (24,728)       (16,949)       (8,607)     (2,827)
Basic net income (loss)
  per share                            $0.08         ($0.91)        ($1.06)       ($0.47)     ($0.19)
Diluted net income (loss) 
  per share                            $0.07         ($0.91)        ($1.06)       ($0.47)     ($0.19)
Shares used in basic per
  share caluclation                   31,933         27,224         15,928        18,432      14,907
Shares used in diluted
  per share calculation               34,853         27,224         15,928        18,432      14,907

Consolidated Balance Sheet Data:

Cash and cash equivalents            $51,534        $22,554        $20,156          $703      $1,224
Working capital                       59,787         19,431         20,223           719         871
Total assets                          88,354         58,262         39,842         4,657       1,609
Non-current portion of 
  long-term debt                         569          2,612            281           467       --
Stockholders' equity                 $76,603        $40,643        $33,098        $2,799      $1,192

*Operating expenses included unusual items consisting of an expense reversal of $922,000
in 1998 related to a real estate reserve and expenses of $9.0 million in 1997 related
to warrant compensation expense of $7.0 million, a real estate reserve and a write-
off of certain domain names.

<FN>
</FN>
</TABLE>



 Item 7.  Management's Discussion and Analysis of Financial 
          Condition and Results of Operations

        Our revenues, cost of revenues and operating expenses have 
grown substantially and we earned net income of $2.6 million in 
1998 and incurred net losses of $24.7 million and $16.9 million 
in 1997 and 1996, respectively.  The losses in 1997 and 1996 
reflected substantial expenditures to develop and launch our 
various Internet channels and television programs.  In addition, 
newly launched services required a certain period of growth 
before they began to achieve adequate revenues to support their 
operation.  The increase in television programming and Internet 
channels has also required increased sales and marketing expenses 
as well as increased general and administrative costs.  As the 
audience for our Internet channels and television programs grows 
we believe that we will be able to attract additional advertising 
customers and increased advertising revenues.

 Results of Operations

 Revenues

 Total Revenues.  Total revenues were $56.4 million, $33.6 million 
and $14.8 million for 1998, 1997 and 1996, respectively.

 Television Revenues.  Revenues attributable to television 
operations were $7.1 million, $6.9 million and $4.7 million for 
1998, 1997 and 1996, respectively.  From April 1995 through June 
1996, television revenues were derived primarily from the sale of 
advertising during our CNET Central television program, which was 
carried nationally on USA Networks and The Sci-Fi Channel pursuant 
to an agreement with USA Networks.  Effective July 1, 1996, we 
amended our agreement, whereby USA Networks licensed the right to 
carry the Digital Domain, a two hour programming block which 
included CNET Central, The New Edge and The Web, on its networks 
for an initial one-year term for a fee equal to the cost of 
production of those programs up to a maximum of $5.2 million.  In 
January 1997, USA Networks agreed to extend the agreement for an 
additional year beginning July 1, 1997 and  revenues were again 
limited to the costs of producing such programs, subject to a 
maximum amount of $5.5 million.  During the second quarter of 
1998, we entered into an agreement for an additional year of 
programming with USA Networks beginning July 1, 1998.  The 
agreement added a fourth program to the Digital Domain called Cool 
Tech and decreased The Web from 60 minutes to 30 minutes.  
Revenues are limited to the costs of production, subject to a 
maximum of $5.9 million.

        In August 1996, we entered into an agreement with Golden 
Gate Productions, L.P. ("GGP"), whereby we produce a television 
program, TV.COM, which was exclusively distributed by GGP.  
Revenue from the distribution of TV.COM was first used to offset 
costs of distribution and production, with any excess being shared 
equally by us and GGP.  In August 1997, the assets of GGP were 
acquired by a third party, Trans World International ("TWI") who 
has agreed to distribute the program under the same terms as the 
original GGP agreement.  Beginning March 1, 1998, we assumed 
responsibility for  the sale of advertisements on TV.COM and will 
pay a distribution fee to TWI.

        Television revenues increased slightly from 1997 to 1998 
primarily due to the contractual increase with USA Networks for 
the additional year of television programming that commenced July 
1, 1998.  The increase in television revenues of $2.2 million from 
1996 to 1997 was primarily related to twelve months of 
distribution of the Digital Domain and TV.COM during 1997 as 
compared to six months of distribution for the Digital Domain in 
1998 and three months of distribution of TV.COM in 1996. 

 Internet Revenues.  Revenues attributable to our Internet 
operations were $49.4 million,  $26.7 million and $10.1 million 
for 1998, 1997 and 1996, respectively.  Internet revenues consist 
primarily of revenues derived from the sale of advertisements on 
pages delivered to users of our Internet network.  Advertising 
programs are generally delivered on either an "impression" based 
program or a "performance" based program.  An impression based 
program earns revenues when an advertisement is delivered to a 
user of our Internet network.  A performance based program earns 
revenues when a user of our Internet network responds to an 
advertisement by linking to an advertisers Internet network.  
Advertising rates vary depending upon whether a program is 
impression or performance based, where advertisements are placed 
and the amount and length of the advertiser's commitment.  
Advertising revenues are recognized in the period in which the 
advertisements are delivered.  Our ability to sustain or increase 
revenues for Internet advertising will depend on numerous 
factors, which include, but are not limited to, our ability to 
increase our inventory of delivered Internet pages on which 
advertisements can be displayed and our ability to maintain or 
increase advertising rates.  In the fourth quarter of 1998 CNET 
began generating revenue from lead-based compensation from its 
shopping services.

        The increases in revenues of $22.7 million from 1997 to 
1998 and $16.6 million from 1996 to 1997 was primarily 
attributable to increased pages delivered and increased 
advertisements sold on our network.  Average daily pages 
delivered in 1998 approximated 6.9 million, an increase of 60% 
over 4.3 million average daily pages in 1997.  The increased 
traffic from 1997 to 1998 primarily relates to an increase in the 
number of users of our network.  A portion of the increased 
traffic was related to the addition of Shopper.Com in May, 1998.  
Average daily pages delivered on our Internet channels during 
1997 approximated 4.3 million pages, an increase of 187% over 1.5 
million average daily pages in 1996.  The increase in pages 
delivered was attributable to a full year of operations for 
Search.com, News.com, Download.com, and Gamecenter.com, which ran 
for 10 months, 4 months, 3 months and 2 months, respectively, in 
1996, as well as increased traffic growth on all of our Internet 
channels during 1997.  In addition, Internet revenues include 
non-advertising revenues of $2.7 million, $5.1 million and 
$144,000 for 1998, 1997 and 1996 respectively.  Non-advertising 
revenues include fees earned from Company sponsored trade shows, 
electronic commerce revenues, content licensing revenues, 
technology licensing and consulting. 

        During 1998, 1997 and 1996, approximately $3.4 million, 
$905,000 and $760,000, respectively, of Internet revenues were 
derived from barter transactions whereby we delivered 
advertisements on our Internet channels in exchange for 
advertisements on the Internet sites of other companies.  These 
revenues and marketing expenses were recognized at the fair value 
of the advertisements received and delivered, and the 
corresponding revenues and marketing expenses were recognized when 
the advertisements were delivered. 

 Revenue Mix.  Television operations accounted for 13%, 21% 
and 32% and Internet operations accounted for 87%, 79% and 68% of 
total revenues for 1998, 1997 and 1996, respectively.  We expect 
to experience fluctuations in television and Internet revenues in 
the future that may be dependent on many factors, including demand 
for our Internet network and television programming, and our 
ability to develop, market and introduce new and enhanced Internet 
content and television programming. 

 Significant Customers. USA Networks accounted for 
approximately 10%, 16% and 19% of total revenues for 1998, 1997 
and 1996 respectively, and Microsoft Corporation accounted for 10% 
and 12% of total revenues for 1997 and 1996, respectively.  There 
can be no assurance that any of these customers will continue to 
account for a significant portion of total revenues in any future 
period. 

 Cost of Revenues

 Total Cost of Revenues.  Total cost of revenues were $30.0 
million, $26.7 million and $15.3 million for 1998, 1997 and 1996, 
respectively.  Cost of revenues includes the costs associated with 
the production and delivery of our television programming and the 
production of our Internet channels.  The principal elements of 
cost of revenues for our television programming have been the 
production costs of our television programs, which primarily 
consist of payroll and related expenses for the editorial and 
production staff, and costs for facilities and equipment.  In 
addition, prior to June 30, 1996, cost of revenues for our 
television programming included the fee payable to USA Networks 
under our agreement with USA Networks as then in effect.  The 
principal elements of cost of revenues for our Internet operations 
have been payroll and related expenses for the editorial, 
production and technology staff, as well as costs for facilities 
and equipment. 

 Cost of Television Revenues.  Cost of revenues for 
television programming were $6.7 million,  $6.9 million and $6.2 
million, or 95%, 100% and 132% of the related revenues, for 1998, 
1997 and 1996, respectively. 

        Cost of revenues for television programming in 1998 were 
comparable to 1997.  The increase in cost of revenues for 
television of $700,000 from 1996 to 1997 was primarily related to 
$1.6 million of additional production costs for twelve months of 
production of the Digital Domain and TV.COM in 1997 as compared to 
six months of production for the Digital Domain in 1996 and three 
months of production of TV.COM in 1996.  The increase in 
production costs were offset by $869,000 in fees payable to USA 
Networks in 1996 under the Company's initial agreement with USA 
Networks.

 Cost of Internet Revenues.  Cost of revenues for Internet 
operations were $23.3 million,  $19.8 million and $9.1 million or 
47%, 74%, and 90% of the related revenues for 1998, 1997 and 1996, 
respectively. 

      The increase in cost of revenues for Internet operations of 
$3.5 million from 1997 to 1998 was primarily attributable to $2.3 
million in costs associated with an Internet network that was 
launched in November 1997, approximately $1.0 million in 
additional costs associated with Company sponsored trade shows and 
increases of approximately $4.0 million related to increased 
personnel, facilities and other costs associated with growing its 
Internet network.  The increases in Internet cost of revenues from 
1997 to 1998 were offset by cost savings resulting from the change 
in percentage ownership of snap. and BuyDirect which resulted in a 
reduction of costs of $3.8 million.

      The increase in cost of revenues for Internet operations of 
$10.7 million from 1996 to 1997 was primarily attributable to 
costs associated with Internet channels which operated for a full 
year in 1997, as compared to a partial year during 1996, and 
channels which launched in 1997.  Channels that were operational 
for a partial year in 1996 include CNET.Search.com, 
CNET.News.com, CNET.Download.com, CNET.Gamecenter.com, and 
Buydirect.com, which were launched in March 1996, September 1996, 
October 1996, November 1996 and November 1996, respectively.  
Channels which launched during 1997 include snap. and 
Computers.com, which launched in September 1997 and November 
1997, respectively.  The Company anticipates increases in cost of 
revenues for Internet production in the future. 

 Cost of Revenues Mix.  Cost of television revenues accounted 
for 22%, 26% and 41% and cost of Internet revenues accounted for 
78%, 74% and 59% of total cost of revenues for 1998, 1997 and 
1996, respectively.  This mix of cost of revenues was impacted by 
more rapid growth of Internet operations in each of 1998 and 1997.  
We anticipate that our cost of Internet revenues will continue to 
account for an increasing percentage of total cost of revenues in 
future periods. 

 Sales and Marketing

      Sales and marketing expenses consist primarily of payroll, 
sales commissions, personnel related expenses, consulting fees and 
advertising expenses.  Sales and marketing expenses were $14.5 
million, $11.6 million and $7.8 million for 1998, 1997, and 1996, 
respectively.  Sales and marketing expense represented 26%, 34% 
and 53% of total revenues in 1998, 1997 and 1996, respectively.

      The increase in sales and marketing expenses of $2.9 million 
from 1997 to 1998 related primarily to increased advertising 
expenditures of $2.8 million and increases of approximately $2.2 
million in sales and marketing personnel and their related 
expenses.  The increases were partially offset by a reduction in 
sales and marketing expenses resulting from the change in 
percentage ownership of snap. and BuyDirect, effective 
December 31, 1997 and March 31, 1998, respectively.  Sales and 
marketing expenses related to snap. and BuyDirect totaled 
approximately $2.9 million in 1997. 

      The increase in sales and marketing expenses of  $3.8 
million from 1996 to 1997, was attributable to $2.3 million in 
expenses related to snap., which were primarily related to 
advertising costs, and to increased salaries and related expenses 
due to an increase in the size of our sales force.  We expect 
sales and marketing expenses to increase in the future as we may 
pursue a more aggressive brand building strategy and as we 
continue to expand our sales force.

 Development

      Development expenses include expenses for the development 
and production of new Internet channels and research and 
development of new or improved technologies, including payroll and 
related expenses for editorial, production and technology staff, 
as well as costs for facilities and equipment.  Costs associated 
with the development of a new Internet channel are no longer 
recognized as development expenses when the new channel begins 
generating revenue.

      Development expenses were $3.5 million, $13.6 million and 
$3.4 million for 1998, 1997 and 1996, respectively.  Development 
expenses represented 6%, 41% and 23% of total revenues for 1998, 
1997 and 1996, respectively.

      During 1997 we incurred expenses of $8.3 million for the 
development of snap. and $3.8 million for the development of 
Computers.com.  Both services were launched during the fourth 
quarter of 1997.  During 1998, our development efforts were 
primarily focused on enhancing our existing Internet network's 
functionality and performance.  The decrease in development 
expenses from 1997 to 1998 of $10.1 million relates primarily to 
the completion and launch of the snap. and Computers.com sites in 
late 1997.

      The increase in development expenses of $10.2 million from 
1996 to 1997 was primarily attributable to the development 
expenses for snap. and Computers.com incurred in 1997.  The 
increases in development expenses attributable to snap. and 
Computers.com in 1997 were partially offset by expenses incurred 
to develop and launch channels during 1996, such as Download.com 
and Buydirect.com.

 General and Administrative

      General and administrative expenses consist of payroll and 
related expenses for executive, finance and administrative 
personnel, professional fees and other general corporate expenses.  
General and administrative expenses were $6.8 million, $6.8 
million and $3.8 million for 1998, 1997 and 1996 respectively.  
General and administrative costs represented 12%, 20% and 25% of 
total revenues for 1998, 1997 and 1996, respectively. 

      General and administrative costs for 1998 were comparable to 
1997.  The increase in general and administrative expense of $3.1 
million from 1996 to 1997 was primarily attributable to increased 
salaries and related expenses and other costs related to 
facilitating our growth during 1997. 

 Unusual Items

      In the first quarter of 1997, we incurred a one-time, non-
cash expense of $7.0 million related to an amendment to the 
warrant agreement with USA Networks whereby we agreed that the 
warrants held by USA Networks will vest in full on December 31, 
2006, to the extent that they have not previously vested.  
Additionally, USA Networks exercised its option to extend its 
agreement with the Company to carry three of our television 
programs through June 30, 1998.

      In the fourth quarter of 1997, we recognized an expense of 
$1.3 million related to reorganizing our real estate needs as we 
had determined that based on existing and planned headcount we had 
a significant excess of leased real estate.  Also in the fourth 
quarter of 1997, we recognized an expense of $700,000 relating to 
a write-off of Internet domain names that we determined that we 
would not use.  Through the fourth quarter of 1998, we had 
incurred expenses of approximately $379,000 related to 
reorganizing our real estate needs.  During the fourth quarter of 
1998 we completed our planning for 1999 and determined that, due 
to expected growth and potential acquisitions, we no longer had 
excess leased real estate and would no longer incur expenses 
related to the reorganization.  We recorded a reversal of the 
remaining real estate reserve of $922,000 during the fourth 
quarter of 1998.

 Other Income (Expense)

      Total other income (expense) was $70,000, $9.4 million and 
($1.4) million for 1998, 1997 and 1996, respectively.  Other 
income (expense) consists of equity losses, gains on the sales of 
equity investments and net interest income and interest expense.   
Equity losses include our interest in snap., our minority interest 
in Vignette and our interest in a joint venture E! Online.  
Pursuant to an agreement in June 1998, between NBC Multimedia and 
us, snap., was formed as a limited liability company, whereby both 
companies share control.  We have recorded snap's financial 
results using the equity method of accounting effective January 1, 
1998.

      Equity losses were $11.8 million, $2.2 million and $1.9 
million for 1998, 1997 and 1996, respectively.  All of the equity 
losses in 1998 were related to snap.  The equity losses in 1997 
were attributable to $1.8 million related to the E! Online joint 
venture and $417,000 related to our Vignette investment.  All of 
the equity losses in 1996 related to E! Online.

      Gains on the sale of equity investments were $10.5 million 
and $11.0 million for 1998 and 1997, respectively.  The gain on 
sales of equity investment in 1998 were primarily attributable to 
a gain related to the sale of a portion of our Vignette investment 
of $9.8 million.  The gain on sale of equity investments in 1997 
was related to the sale of all our ownership in E! Online.  

 Income Taxes

      We had net income for 1998 and a net loss for each of 1997 
and 1996.  As of December 31, 1998, we had approximately $61 
million of net operating loss carryforwards for federal income tax 
purposes, which expire between 2008 and 2018.  We also have 
approximately $24 million of net operating loss carryforwards for 
state income tax purposes, which expire between 1999 and 2003.  We 
experienced an "ownership change" as defined by Section 382 of the 
Internal Revenue Code in October 1994.  As a result of the 
ownership change, our use of the federal and state net operating 
loss carryforwards is subject to limitation.  The ability to use 
net operating loss carryforwards may be further limited should we 
experience another "ownership change" as defined by Section 382 of 
the Internal Revenue Code.  See Note 3 of Notes to Consolidated 
Financial Statements. 

 Income (Loss)

      We recorded net income of $2.6 million or $0.7 per diluted 
share for 1998, compared to net losses of $24.7 million or $0.91 
per share and $16.9 million or $1.06 per share for 1997 and 1996, 
respectively.  Net income was $2.6 million for 1998 as compared to 
a net loss of $24.7 million for 1997.  The change from 1997 to 
1998 was attributable to an increase in total revenues of $22.8 
million, a reduction of unusual items expense of approximately 
$8.1 million, a reduction in other income of $9.3 million and 
increases to cost of revenues and operating expenses (excluding 
unusual items) of $4.0 million.  The net loss for each of the 
years 1997 and 1996 was primarily attributable to cost of revenues 
and operating expenses in excess of total revenues.  The increase 
in net loss of $7.8 million from 1996 to 1997 was primarily 
attributable to increased cost of revenues of $11.4 million, 
increased sales and marketing expenses of $3.8 million, increased 
development costs of $10.2 million and increased general and 
administrative costs of $3.1 million, totaling $28.5 million in 
increased expenses, which were offset by an increase of $18.8 
million in total revenues. 

 Liquidity and Capital Resources

      As of December 31, 1998, we had cash and cash equivalents of 
$51.5 million compared to $22.6 million in 1997.  Cash provided by 
operating activities of $9.2 million in 1998 was primarily due to 
earnings of $2.6 million and depreciation, amortization and the 
amortization of program costs of $12.1 million. Net cash used in 
operating activities of $5.9 million and $8.9 million for 1997 and 
1996 respectively, were primarily attributable to net losses in 
such periods.  Net cash used in investing activities of $11.0 
million, $19.7 million and $18.5 million for 1998, 1997 and 1996, 
respectively, were primarily attributable to purchases of 
equipment and programming assets. Cash flows provided by financing 
activities of $30.8 million in 1998 consisted primarily of the 
issuance of common stock through a private placement in June of 
1998, and the issuance of common stock through the exercise of 
warrants, our stock option plans and our Employee Stock Purchase 
Plan.  Cash flows provided by financing activities in 1997 
consisted primarily of proceeds from the issuance of common stock 
in private placements.  Cash flows provided by financing 
activities in 1996 consisted primarily of proceeds from our IPO, 
the private sale of common stock to Intel and the issuance of 
preferred stock. We believe that existing funds will be sufficient 
to meet our anticipated cash needs for working capital and capital 
expenditures for at least the next 12 months.

      As of December 31, 1998 we had obligations outstanding under 
a note payable and under certain capital leases of $1.7 million.  
Such obligations were incurred to finance equipment purchases and 
are payable through May 2008.

      On March 31, 1998, we contributed our ownership in 
BuyDirect and net assets related to BuyDirect of approximately 
$744,000, to a new venture that was separately owned by 
BuyDirect's existing management group.  Prior to the transaction, 
BuyDirect was a wholly owned division of the Company that 
distributed electronic software.  As part of the transaction, we 
received a 19% ownership interest in the new venture, 
BuyDirect.com.  We used the cost method of accounting for the 
investment, effective April 1, 1998.  Prior to March 31, 1998 the 
operating results of BuyDirect were included in our consolidated 
results.  BuyDirect.com recently entered into a merger agreement 
with beyond.com.  This merger will result in our owning 
approximately 800,000 shares of beyond.com.

      In May of 1998 we acquired U.Vision Inc.  In the 
acquisition, we issued 1,089,930 shares of common stock in 
exchange for all of the outstanding shares of U.Vision.  U.Vision 
owned and operated ComputerESP, a pricing and availability engine 
for buying computer products on the Internet.  Subsequent to the 
merger, we relaunched ComputerESP as Shopper.com.  We recorded 
this transaction using the pooling-of-interests accounting method 
and recorded the financial results of U.Vision in our 
consolidated financial statements effective April 1, 1998.  The 
financial statements prior to April 1, 1998 were not adjusted for 
the financial results of U.Vision as the impact was not material.

      In June of 1998 we entered into an agreement with NBC 
Multimedia, Inc. ("NBC Multimedia") to form a limited liability 
company to operate the snap. Internet portal service.  The newly 
formed company was called Snap! LLC.  Prior to the agreement, 
snap. was a wholly owned division of the Company.  Pursuant to 
the agreement, we contributed to Snap! LLC substantially all of 
the assets used exclusively in the operation of the snap. 
service.  Initially,  we own 81% of Snap! LLC and NBC Multimedia 
owns 19%.  However, NBC Multimedia has an option to increase its 
ownership to 60%.  Effective January 1, 1998, we recorded snap.'s 
financial results using the equity method of accounting, due to 
certain contractual control provisions.  Prior to January 1, 
1998, the operating results of snap. were included in our 
consolidated results.

     In June of 1998 we completed the sale of 1,625,600 shares 
of common stock to National Broadcasting Company, Inc. ("NBC").  
The aggregate purchase price for the shares sold was $26.2 
million.

     On February 9, 1999, we announced an agreement with 
American Online, Inc. whereby we will become the exclusive 
provider of computer hardware and software buying guides on the 
AOL service and on AOL.com, as well as the primary provider of 
computer buying guides on CompuServe, Digital City, AOL Hometown 
and certain AOL international properties.  Under the terms of the 
agreement, AOL will receive guaranteed payments from us of $14.5 
million over approximately 27 months.

     On February 16, 1999, we acquired NetVentures, Inc. in a 
stock-for-stock exchange valued at approximately $12.5 million.  
NetVentures owns and operates ShopBuilder (www.shopbuilder.com), 
an online store-creation system.  

     On February 19, 1999, we acquired AuctionGate Interactive, 
Inc. in a stock-for-stock exchange valued at approximately $6.5 
million.  AuctionGate owns and operates AuctionGate.com, an 
auction site specializing in computer products.  

     On February 26, 1999, we acquired the assets of 
Winfiles.com, a leading software downloading service, from 
Jenesys LLC for a total purchase price of $11.5 million, payable 
in cash in two installments of $5.75 million.  

     On March 8, 1999, we effected a 2-for-1 split of our common 
stock that was distributed in the form of a stock dividend to our 
common stock holders as of February 22, 1999. 

     On March 8, 1999, we also completed a private placement 
with gross proceeds of $172.9 million of our 5% convertible 
subordinated notes.  The placement will be subject to certain 
fees and expenses.  The notes are due March 1, 2006, and we pay 
interest on March 1 and September 1 of each year.  The notes are 
convertible beginning June 7, 1999, at the option of the 
noteholder, into shares of our common stock at a conversion price 
of $74.8125 per share. The conversion price of the notes will be 
adjusted if certain events that are described in the terms of the 
notes occur.  We may repurchase or redeem the notes at our option 
at any time beginning March 6, 2002 at the following prices, plus 
accrued and unpaid interest and liquidated damages, if any,

        Year    Redemption Price              Year    Redemtion Price

        2002     102.857%                      2004      101.429%             
        2003      2.143%                       2005      100.714%             

A noteholder may require us to repurchase the notes if a change 
of control of the Company, as described in the terms of the 
notes, occurs or if our common stock is no longer listed for 
trading on Nasdaq or another stock exchange.  If one of these 
events occurs and the noteholder requires us to repurchase the 
notes, we will repurchase the notes at a purchase price equal to 
the face amount of the notes, plus accrued and unpaid interest 
and liquidated damages, if any.

        In connection with the private placement, we also agreed to 
file a registration statement with the Securities and Exchange 
Commission so that the noteholders, and the holders of shares of 
our common stock issued upon the conversion of the notes, will be 
able to resell the notes and the common stock.  If we fail to 
file the registration statement by May 7, 1999, fail to cause the 
registration statement to become effective by August 5, 1999, or 
if we suspend the use of the related prospectus in excess of 60 
days within any 12-month period, we will be required to pay 
additional interest on the notes.  This additional interest is 
referred to as liquidated damages.  We will pay an additional 
 .25% of interest on the notes for the first 90 days of any such 
failure, and pay an additional .50% of interest on the notes for 
the period of time that our failure exceeds 90 days.

        The notes are general, unsecured obligations of the Company 
and are subordinate to all of our senior debt, as defined in the 
terms of the notes.  The terms of the notes do not limit our 
ability to incur other indebtedness and we are not required to 
make periodic payments on the principal of the notes except as 
described above.

        On March 22, we acquired KillerApp Corporation in a stock-
for-stock exchange valued at approximately $46 million.  
KillerApp owns and operates KillerApp.com, an online comparison 
shopping service for computer and consumer electronics products.


 Seasonality

        We believe that advertising sales in traditional media, 
such as television, are generally lower in the first and third 
calendar quarters of each year than in the respective preceding 
quarters and that advertising expenditures fluctuate 
significantly with economic cycles.  Depending on the extent to 
which the Internet is accepted as an advertising medium, 
seasonality and cyclicality in the level of advertising 
expenditures generally could become more pronounced for Internet 
advertising.  Seasonality and cyclicality in advertising 
expenditures generally, or with respect to Internet-based 
advertising specifically, could have a material adverse effect on 
our business, prospects, financial condition and operating 
results.

     We may also experience seasonality in our operating results, 
particularly in connection with our shopping services which may 
reflect seasonal trends in the retail industry.  The level of 
consumer retail spending generally decreases in the first and 
third calendar quarters.  Advertising expenditures, which account 
for substantially all of our revenues, are also subject to 
seasonal fluctuations and are influenced by consumer spending 
patterns.

Year 2000 Compliance

     We are aware of the issues associated with the programming 
code and embedded technology in existing systems as the year 2000 
approaches.  The "Year 2000 Issue" arises from the potential for 
computers to fail or operate incorrectly because their programs 
incorrectly interpret the two digit date fields "00" as 1900 or 
some other year, rather than the year 2000.  The year 2000 issue 
creates risk for us from unforeseen problems in our own computer 
systems and from third parties, including customers, vendors and 
manufacturers, with whom we deal.  Failures of our and/or third 
parties' computer systems could result in an interruption in, or 
a failure of certain normal business activities or operations.  
Such failures could materially and adversely affect our business, 
prospects, financial condition and operating results.

     To mitigate this risk, we have established a formal year 2000 
program to oversee and coordinate the assessment, remediation, 
testing and reporting activities related to this issue.  We are 
currently in the assessment phase of our year 2000 program.  As 
part of this assessment, we will review the following systems to 
determine if they are year 2000 compliant:

* our application systems (financial systems, various 
  custom-developed business applications)
* technology infrastructure (networks, servers, desktop 
  equipment)
* facilities (security systems, fire alarm systems)
* vendors/partners and products.

 This review will include:

* the collection of documentation from software and 
  hardware manufacturers
* the detailed review of programming code for custom 
  applications
* the physical testing of desktop equipment using software 
  designed to test for year 2000 compliance
* the examination of key vendors'/partners' year 2000 
  programs 
* the ongoing testing of our products as part of normal 
  quality assurance activities.

     We anticipate that we will complete the assessment and 
remediation phase and begin the testing phase of our year 2000 
program by the third quarter of 1999.  We have not made estimates 
for the costs associated with completing our year 2000 program, 
but will do so after completion of the assessment phase of the 
project.  Costs incurred to date, including costs of personnel, 
have not been material.  We can offer no assurance that we will 
not experience serious unanticipated negative consequences and/or 
additional material costs caused by undetected errors or defects 
in the technology used in our internal systems, or by failures of 
our vendors/partners to address their year 2000 issues in a 
timely and effective manner.

     Should miscalculations or other operational errors occur as a 
result of the year 2000 issue, we or the parties on which we 
depend may be unable to produce reliable information or to 
process routine transactions.  Furthermore, in the worst case, we 
or the parties on which we depend may be incapable of conducting 
critical business activities which include, but are not limited 
to, the production and delivery of our Internet channels, 
invoicing customers and paying vendors, which could have a 
material adverse effect on our business, prospects, financial 
condition and operating results.

     Cautionary Statement Regarding Factors That May Affect Our 
Business and Our Future Results

     Our disclosure and analysis in this report contains 
"forward-looking statements".  Forward-looking statements are any 
statements other than statements of historical fact.  Examples of 
forward-looking statements include projections of earnings, 
revenues or other financial items, statements of the plans and 
objectives of management for future operations, statements 
concerning proposed new products or services, statements 
regarding future economic conditions or performance, and any 
statement of assumptions underlying any of the foregoing.  In 
some cases, you can identify forward-looking statements by the 
use of words such as "may," "will," "expects," "believes", 
"plans," "anticipates," "estimates," "potential," or "continue," 
and any other words of similar meaning.  

      Any or all of our forward-looking statements in this report 
and in any other public statements we make may turn out to be 
wrong.  They can be affected by inaccurate assumptions we might 
make or by known or unknown risks and uncertainties.  Many 
factors mentioned in the discussion in this report will be 
important in determining future results.  Consequently, no 
forward-looking statement can be guaranteed.  Actual future 
results may vary materially.

      We undertake no obligation to publicly update any forward-
looking statements, whether as a result of new information, 
future events or otherwise.  You are advised, however, to consult 
any further disclosures we make on related subjects in our 10-Q 
and 8-K reports to the SEC.  Also note that we provide the 
following cautionary discussion of risks, uncertainties and 
possibly inaccurate assumptions relevant to our businesses.  
These are factors that we think could cause our actual results to 
differ materially from expected and historical results.  Other 
factors besides those listed here could also adversely affect the 
Company.  This discussion is provided as permitted by the Private 
Securities Litigation Reform Act of 1995.

     We Have A Limited Operating History and an Accumulated 
Deficit. We have a limited operating history upon which you can 
evaluate us.  Our prospects must be considered in light of the 
risks, expenses and difficulties frequently encountered by 
companies in developing industries, particularly companies in the 
relatively new and rapidly evolving market for Internet products, 
content and services.  Such risks for us include, but are not 
limited to:

* an evolving and unpredictable business model
* uncertain acceptance of new services including CNET 
  Shopper.com 
* competition 
* management of growth.

 To address these risks, we must, among other things:

* develop new relationships and maintain existing
* relationships with our advertising customers, their 
 ' advertising agencies and other third parties
* provide original and compelling content to Internet users 
  and television viewers
* develop and upgrade our technology
* implement and successfully execute our business and 
  marketing strategy 
* successfully expand into new products, services or 
  markets 
* effectively manage and integrate acquisitions and other 
  business combinations
* respond to competitive developments 
* attract, retain and motivate qualified personnel.

We cannot assure you that we will succeed in addressing such 
risks.  If we fail to do so, our revenues and operating results 
could be materially reduced.

     Additionally, our limited operating history and the emerging 
nature of the markets in which we compete makes the prediction of 
future operating results difficult or impossible.  We can offer no 
assurance that our revenues will increase or even continue at 
their current level or that we will maintain profitability or 
generate cash from operations in future periods.  In addition, 
interest that we pay on our 5% convertible subordinated notes and 
costs of our acquisitions, including amortization of goodwill and 
other purchased intangibles and ongoing operating expenses, will 
or may further affect our operating results.  From our inception 
until the third quarter of 1998, we incurred significant losses.  
As of December 31, 1998, we had an accumulated deficit of $51.2 
million.  We may continue to incur losses in the future.  For 
example, if we were to increase significantly our marketing 
expenses, which we are considering, it is possible that we would 
incur losses as a result.   In view of the rapidly evolving nature 
of our business and our limited operating history, we believe that 
period-to-period comparisons of our operating results are not 
necessarily meaningful and should not be relied upon as an 
indication of future performance.

     If currently available cash and cash generated by operations 
is insufficient to satisfy our liquidity requirements, we may be 
required to sell additional equity or debt securities.  The sale 
of additional equity or convertible debt securities would result 
in additional dilution to our stockholders.  There can be no 
assurance that financing will be available in amounts or on terms 
that we find acceptable.  

      We May Experience Fluctuations in Our Quarterly Operating 
Results. Our quarterly operating results may fluctuate 
significantly in the future as a result of a variety of factors, 
many of which are outside our control.  Factors that may 
adversely affect our quarterly operating results attributable to 
our Internet operations include, among others:

* demand for Internet advertising
* the addition or loss of advertisers, and the advertising 
  budgeting cycles of individual advertisers
* the level of traffic on our network of Internet channels
* the amount and timing of capital expenditures and other 
  costs (including marketing costs) relating to the 
  expansion of our Internet operations
* competition 
* our ability to manage effectively our development of new 
  business segments and markets
* our ability to successfully manage the integration of 
  operations and technology of acquisitions and other 
  business combinations 
* our ability to upgrade and develop our systems and 
  infrastructure 
* technical difficulties, system downtime or Internet 
  brownouts
* governmental regulation and taxation policies
* general economic conditions and economic conditions 
  specific to the Internet and Internet media.

     We may be unable to adjust spending in a timely manner to 
compensate for any unexpected revenue shortfall.  Accordingly, any 
significant shortfall in revenues in relation to our planned 
expenditures could materially reduce our operating results and 
adversely affect our financial condition.

     Quarterly operating results attributable to our television 
operations are generally dependent on the costs we incur in 
producing our television programming.  If the costs of producing 
television programs exceed licensing and distribution revenues, we 
could incur a gross deficit with respect to our television 
operations. As a result of our strategy to cross market our 
television and Internet operations, a decrease in the number of 
viewers of our television programs may have a negative effect on 
the usage of our Internet channels which would materially reduce 
our revenues and adversely affect our financial condition.

     Due to all of the foregoing factors, it is likely that our 
operating results may fall below our expectations or the 
expectations of securities analysts or investors in some future 
quarter.  In such event, the trading price of our common stock 
would likely be materially adversely affected.  

     Our Internet Content and Services May Not be Accepted. Our 
future success depends upon our ability to deliver original and 
compelling Internet content and services in order to attract and 
retain users.  We cannot assure you that our content and services 
will be attractive to a sufficient number of Internet users to 
generate revenues sufficient for us to sustain operations.  If we 
are unable to develop Internet content and services that allow us 
to attract, retain and expand a loyal user base possessing 
demographic characteristics attractive to advertisers and sellers 
of technology products, we will be unable to generate revenue.

     Our Television Programming May Not be Accepted. We cannot 
assure you that television broadcasters, cable networks or their 
viewers will accept our television programming.  The successful 
development and production of television programming is subject to 
numerous uncertainties, including the ability to:

* anticipate and successfully respond to rapidly changing 
  consumer tastes and preferences
* obtain favorable distribution rights
* fund new program development
* attract and retain qualified producers, writers, 
  technical personnel and television hosts.

     We may be unable to increase or sustain our revenues if we fail 
to develop television programming that allows us to attract, 
retain and expand a loyal television audience, or if we fail to 
retain or develop distribution channels for our television 
programming. 

     We Face Significant Competition.  The market for Internet 
content and services is new, intensely competitive and rapidly 
evolving; there are minimal barriers to entry, and current and 
new competitors can launch new sites at relatively low cost.  
There can be no assurance that we will compete successfully with 
current or future competitors. 

     We May Have Difficulties Managing Our Growth. We have 
rapidly and significantly expanded our operations and anticipate 
that further expansion of our operations may be required in order 
to address potential market opportunities.  This rapid growth has 
placed, and is expected to continue to place, a significant strain 
on our management, operational and financial resources.  We cannot 
assure you that our current personnel, systems, procedures and 
controls will be adequate to support our future operations, that 
management will be able to identify, hire, train, motivate or 
manage required personnel or that management will be able to 
successfully identify and exploit existing and potential market 
opportunities. 

      We Have Risks Associated With System Development and 
Operations.  Our Internet revenues consist primarily of revenues 
derived from the sale of advertisements and other fees from 
sellers of technology products on our Internet channels, in 
particular from arrangements with our advertising customers that 
provide for a guaranteed number of impressions.  Any system 
interruptions that result in the unavailability of our Internet 
channels may result in us being unable to deliver the number of 
impressions guaranteed by such agreements.  During 1998, we 
experienced two power interruptions which resulted in the 
unavailability of our Internet channels and services for portions 
of two days.  We can offer no assurance that we will be able to 
accurately project the rate or timing of increases, if any, in 
the use of our Internet channels or will be able to, in a timely 
manner, effectively upgrade and expand our systems. 

     We are Dependent on Our Advertising Revenues. Our revenues 
through December 31, 1998 were derived primarily from the sale of 
advertising and other fees from sellers of technology products on 
our Internet channels and from advertising and license fees from 
producing our television programs.  Most of our advertising 
contracts can be terminated by the customer at any time on very 
short notice. If we lose advertising customers, fail to attract 
new customers or are forced to reduce advertising rates in order 
to retain or attract customers, our  revenues and financial 
condition will be materially adversely affected.

      The Internet May Not Be Accepted as an Advertising Medium. 
Our Internet advertising customers have only limited experience 
with the Internet as an advertising medium and neither such 
customers nor their advertising agencies have devoted a 
significant portion of their advertising budgets to Internet-based 
advertising in the past.  Some of our potential customers have 
little or no experience with the Internet as an advertising medium 
and have not devoted significant portions of their advertising 
budgets to Internet-based advertising in the past.  In order for 
us to generate advertising revenues, advertisers and advertising 
agencies must direct a significant portion of their budgets to the 
Internet and, specifically, to our Internet sites.  Acceptance of 
the Internet among advertisers and advertising agencies also 
depends to a large extent on the growth of use of the Internet by 
consumers, which is highly uncertain, and on the acceptance of new 
methods of conducting business and exchanging information. If 
Internet-based advertising is not widely accepted by advertisers 
and advertising agencies, our revenues and financial condition 
will be materially adversely affected. In addition, users can 
purchase software that is designed to block banner advertisements 
from appearing on their computer screens as the user navigates on 
the Internet.  This software is intended to increase the 
navigation speed for the user.  Our revenues could be materially 
reduced if this software or other ad-blocking technology becomes 
widely-used.

     Brand May Not Be Accepted or Maintained.  Promotion of the 
CNET brand will depend largely on our success in providing high 
quality Internet and television programming.  If consumers do not 
perceive our existing Internet and television content to be of 
high quality, or if we introduce new Internet channels or 
television programs or enter into new business ventures that are 
not favorably received by consumers, we will not be successful in 
promoting and maintaining our brand.  If we are unable to provide 
high quality content and services or otherwise fail to promote 
and maintain our brand, or if we incur excessive expenses in an 
attempt to or promote and maintain our brand, our revenues and 
financial condition will be materially adversely affected. 

      The Loss of Key Personnel Could Adversely Affect Our 
Business. Our performance is substantially dependent on the 
continued services of Halsey M. Minor, Shelby W. Bonnie and the 
other members of our senior management team, as well as on our 
ability to retain and motivate our other officers and key 
employees.  We do not have "key person" life insurance policies 
on any of our officers or other employees. Our future success also 
depends on our ability to attract and retain highly qualified 
personnel.  The production of content and services for the 
Internet and television requires highly skilled writers and 
editors and personnel with sophisticated technical expertise.  We 
have encountered difficulties in attracting qualified software 
developers for our Internet channels and related technologies.  
The failure to attract and retain the necessary technical, 
managerial, editorial and sales personnel could have a material 
adverse effect on our business and operating results.

      We Have Risks Associated With Television Distribution and 
We Are Dependent on USA Networks. Our television programming is 
currently carried primarily on the USA Network and the Sci-Fi 
Channel, both of which are owned by USA Networks, pursuant to an 
agreement that expires on June 30, 1999.  We cannot assure you 
that we will be able to obtain distribution for our television 
programming after June 30, 1999.  In such event, our brand, 
revenues and financial condition may be materially and adversely 
affected.

      We Are Subject to Risks Associated With Technological 
Change. The market for Internet products and services is 
characterized by rapid technological developments, frequent new 
product introductions and evolving industry standards.  The 
emerging character of these products and services and their rapid 
evolution will require that we continually improve the 
performance, features and reliability of our Internet content, 
particularly in response to competitive offerings.  We can offer 
no assurance that we will be successful in responding quickly, 
cost effectively and sufficiently to these developments. In 
addition, the widespread adoption of new Internet technologies or 
standards could require substantial expenditures by us to modify 
or adapt our Internet channels and services and could 
fundamentally affect the character, viability and frequency of 
Internet-based advertising.  Any of these events could have a 
material adverse effect on our financial condition and operating 
results.  

     We Depend on Third Parties for Our Internet Operations. We 
rely on the cooperation of owners and operators of other Internet 
sites in connection with the operation of our Internet channels 
and services.  We can offer no assurance that such cooperation 
will be available on acceptable commercial terms or at all.  Our 
ability to develop original and compelling Internet content and 
service is also dependent on maintaining relationships with and 
using products provided by third party vendors of Internet 
development tools and technologies, such as:

* Macromedia's Shockwave
* Microsoft's ActiveX
* Progressive Networks' RealAudio 
* Sun Microsystems' Java

     Our ability to advertise on other Internet sites and the 
willingness of the owners of such sites to direct users to our 
Internet channels through hypertext links are also critical to the 
success of our Internet operations. If we are unable to develop 
and maintain satisfactory relationships with such third parties on 
acceptable commercial terms, or if our competitors are better able 
to leverage such relationships, our financial condition and 
operating results will be materially adversely affected.

      We Have Risks Associated With Our Potential Acquisitions 
and Investments. From time to time, we consider new business 
opportunities and ventures, including acquisitions, in a broad 
range of areas.  Any decision by us to pursue a significant 
business expansion or new business opportunity would likely 
require a substantial investment of capital, which could have a 
material adverse effect on our financial condition and our ability 
to implement our existing business strategy, or the issuance of 
additional equity interests, which would be dilutive to our 
current stockholders.  Any investment could also result in 
operating losses for us. Further, the pursuit of expansion or new 
business opportunities would place additional, substantial burdens 
on our management personnel and our financial and operational 
systems.  In addition, we can offer no assurance that we will have 
sufficient capital to pursue any investment or acquisition.  We 
can offer no assurance that we will be able to develop any new 
Internet channel or service or other new business venture in a 
cost effective or timely manner or that it would achieve market 
acceptance.  We cannot assure you that any significant business 
expansion or new business opportunity would ever be profitable.  

      We Have Risks Associated With Business Combinations and 
Strategic Alliances. We may choose to expand our operations or 
market presence by entering into agreements, business 
combinations, investments, joint ventures or other strategic 
alliances with third parties, such as our agreement with America 
Online, or our joint venture with an affiliate of NBC to operate 
the snap. Internet portal service.  Any such transaction will be 
accompanied by risks commonly encountered in such transactions, 
which include, among others:

* the difficulty of assimilating the operations, 
  technology and personnel of the combined companies
* the potential disruption of our ongoing business
* the possible inability to retain key technical and 
  managerial personnel
* additional expenses associated with amortization of 
  goodwill and other purchased intangible assets
* additional operating losses and expenses associated with 
  the activities and expansion of acquired businesses
* the possible impairment of relationships with existing 
  employees and advertising customers.

There can be no assurance that we will be successful in 
overcoming these risks or any other problems encountered in 
connection with such business combination, investments, joint 
ventures or other strategic alliances, or that such transactions 
will be profitable.

        We Are Dependent on Intellectual Property Rights and Others 
May Infringe Upon Those Rights.  We rely on trade secret and 
copyright laws to protect our proprietary technologies.  We 
cannot assure you that such laws will provide sufficient 
protection, that others will not develop technologies that are 
similar or superior to ours, or that third parties will not copy 
or otherwise obtain and use our technologies without 
authorization.  

        We Have Risks Associated with Domain Names. We currently 
hold various Web domain names relating to our brand and sites.  
The acquisition and maintenance of domain names generally is 
regulated by governmental agencies and their designees.  For 
example, in the United States, the National Science Foundation 
has appointed Network Solutions, Inc. as the current exclusive 
registrar for the ".com," ".net" and  ".org" generic top-
level domains.  The regulation of domain names in the United 
States and in foreign countries is subject to change.  We cannot 
assure you that we will be able to acquire or maintain relevant 
domain names in all countries in which we conduct business.  
Furthermore, the relationship between regulations governing 
domain names and laws protecting trademarks and similar 
proprietary rights is unclear.  We, therefore, may be unable to 
prevent third parties from acquiring domain names that are 
similar to, or infringe upon or otherwise decrease the value of 
our trademarks and other proprietary rights.  Any such inability 
could have a material adverse effect on our business.

      We Have Risks Associated With Government Regulation and 
Legal Uncertainties.  Although there are currently few laws and 
regulations directly applicable to the Internet, it is possible 
that new laws and regulations will be adopted covering issues 
such as privacy, copyrights, obscene or indecent communications 
and the pricing, characteristics and quality of Internet products 
and services.  The adoption of restrictive laws or regulations 
could decrease the growth of the Internet or expose us to 
significant liabilities. 

      We are Dependent on the Continued Growth in Use of the 
Internet. Rapid growth in the use of and interest in the Internet 
is a recent phenomenon.  We can offer no assurance that 
acceptance and use of the Internet will continue to develop or 
that a sufficient base of users will emerge to support our 
business. 

     To the extent that the Internet continues to experience an 
increase in users, an increase in frequency of use or an increase 
in the bandwidth requirements of users, we can offer no assurance 
that the Internet infrastructure will be able to support the 
demands placed upon it.  In addition, the Internet could lose its 
viability as a commercial medium due to delays in the development 
or adoption of new standards and protocols required to handle 
increased levels of Internet activity, or due to increased 
government regulation.  If use of the Internet does not continue 
to grow or grows more slowly than expected, or if the Internet 
infrastructure does not effectively support growth that may 
occur, our revenues and financial condition would be materially 
adversely affected.  

     We Have Capacity Constraints and May be Subject to System 
Disruptions. The satisfactory performance, reliability and 
availability of our  Internet channels and our network 
infrastructure are critical to attracting Internet users and 
maintaining relationships with advertising customers.  Our 
Internet advertising revenues are directly related to the number 
of advertisements delivered by us to users.  System interruptions 
that result in the unavailability of our Internet channels or 
slower response times for users would reduce the number of 
advertisements delivered and reduce the attractiveness of our 
Internet channels to users and advertisers.  We have experienced 
periodic system interruptions in the past and believe that such 
interruptions will continue to occur from time to time in the 
future. Any increase in system interruptions or slower response 
times resulting from the foregoing factors could have a material 
adverse effect on our revenues and financial condition. 

     Our Internet and television operations are vulnerable to 
interruption by fire, earthquake, power loss, telecommunications 
failure and other events beyond our control. All of our servers 
and television production equipment is currently located in San 
Francisco, California, an area that is susceptible to 
earthquakes.  Since launching our first Internet site in June 
1995, we have experienced system downtime for limited periods of 
up to a few hours due to power loss and telecommunications 
failures, and there can be no assurance that interruptions in 
service will not materially adversely affect our operations in 
the future.  We do not carry sufficient business interruption 
insurance and do not carry earthquake insurance to compensate us 
for losses that may occur, and any losses or damages incurred by 
us could have a material adverse effect on our financial 
condition.

      We May Be Liable for Our Internet and Television Content.  
As a publisher and a distributor of content over the Internet and 
television, we also face potential liability for defamation, 
negligence, copyright, patent or trademark infringement and other 
claims based on the nature and content of the materials that we 
publish or distribute.  Such claims have been brought, and 
sometimes successfully pressed, against online services.  In 
addition, we could be exposed to liability with respect to 
material indexed or offered on our sites.  Although we carry 
general liability insurance, our insurance may not cover 
potential claims of this type or may not be adequate to indemnify 
us for all liability that may be imposed.  Any imposition of 
liability that is not covered by insurance or is in excess of 
insurance coverage could have a material adverse effect on our 
financial condition. 

      We Have Security Risks. A party who is able to circumvent 
our security measures could misappropriate proprietary 
information or cause interruptions in our Internet operations. We 
may be required to expend significant capital and resources to 
protect against the threat of such security breaches or to 
alleviate problems caused by such breaches.  For example, so-
called "spiders" have and can be used in efforts to copy our 
databases, including our database of technology products and 
prices.

      Concerns over the security of Internet transactions and the 
privacy of users may also inhibit the growth of the Internet, 
particularly as a means of conducting commercial transactions.  
To the extent that activities of us or third party contractors 
involve the storage and transmission of proprietary information, 
such as computer software or credit card numbers, security 
breaches could expose us to a risk of loss or litigation and 
possible liability.  There can be no assurance that contractual 
provisions attempting to limit our liability in such areas will 
be successful or enforceable, or that other parties will accept 
such contractual provisions as part of our agreements.

      We Are Dependent on Licensed Technology. We rely on certain 
technology licensed from third parties, and there can be no 
assurance that these third party technology licenses will be 
available or will continue to be available to us on acceptable 
commercial terms or at all.

      We Have Substantial Indebtedness.  As a result of the sale 
of our 5% convertible subordinated notes in March 1999 we 
incurred $172.9 million of additional indebtedness.  Along with 
the notes, we may incur substantial additional indebtedness in 
the future.  The level of our indebtedness, among other things, 
could:

* make it difficult for us to make payments on the notes
* make it difficult for us to obtain any necessary 
  financing in the future for working capital, capital 
  expenditures, debt service requirements or other 
  purposes
* limit our flexibility in planning for, or reacting to 
  changes in, our business 
* make us more vulnerable in the event of a downturn in 
  our business.  

      We can offer no assurance that we will be able to meet our 
debt service obligations including our 
obligations under the notes.

      We May Be Unable To Pay Our Debt Service and Other 
Obligations. Our operating income and cash flow generated during 
1998 would have been insufficient to pay the amount of interest 
payable annually on our indebtedness, including our notes.  We 
can offer no assurance that we will be able to pay interest and 
other amounts due on the notes or our other indebtedness.  If we 
are unable to generate sufficient cash flow or otherwise obtain 
funds necessary to make required payments, or if we otherwise 
fail to comply with the various covenants in our indebtedness, we 
would be in default under the terms thereof, which would permit 
the holders of such indebtedness to accelerate the maturity of 
such indebtedness and could cause defaults under our other 
indebtedness.  Any such default could have a material adverse 
effect on our financial condition. 

      We Face Uncertainty Relating to the Year 2000 Issue.  We 
are in the assessment phase of our year 2000 program.  We can 
offer no assurance that we will not experience serious 
unanticipated negative consequences and/or additional material 
costs caused by undetected errors or defects in the technology 
used in our internal systems, or by failures of our 
vendors/partners to address their year 2000 issues in a timely 
and effective manner.

     The Price of Our Common Stock Is Subject to Wide 
Fluctuation. The trading price of our common stock is subject to 
wide fluctuations.  Trading prices of our common stock may 
fluctuate in response to a number of events and factors, such as:

* quarterly variations in operating results
* announcements of innovations
* new products, strategic developments or business 
  combinations by us or our competitors
* changes in our expected operating expense levels or 
  losses
* changes in financial estimates and recommendations of 
  securities analysts 
* the operating and securities price performance of other 
  companies that investors may deem comparable to us
* news reports relating to trends in the Internet.
* other events or factors many of which are beyond our 
  control.  

     In addition, the stock market in general, and the market 
prices for Internet-related companies in particular, have 
experienced extreme volatility that often has been unrelated to 
the operating performance of such companies.  These broad market 
and industry fluctuations may adversely affect the trading price 
of our common stock, regardless of our operating performance.

     Certain Provisions of Our Certificate of Incorporation, 
Bylaws and Delaware Law Could Deter Takeover Attempts.  Some 
provisions in our certificate of incorporation and bylaws could 
delay, prevent or make more difficult a merger, tender offer, 
proxy contest or change of control.  Our stockholders might view 
any such transaction as being in their best interest since the 
transaction could result in a higher stock price than the current 
market price for our common stock.  Among other things, our 
certificate of incorporation and bylaws:

* authorize our board of directors to issue preferred 
  stock in series with the terms of each series to be 
  fixed by our board of directors
* divide our board of directors into three classes so that 
  only approximately one-third of the total number of 
  directors is elected each year
* permit directors to be removed only for cause
* specify advance notice requirements for stockholder 
  proposals and director nominations

       In addition, with certain exceptions, the Delaware General 
Corporation Law restricts mergers and other business combinations 
between us and any stockholder that acquires 15% or more of our 
voting stock.

Item 7A.  Quantitative and Qualitative Disclosures About Market 
Risk

      We are exposed to the impact of interest rate changes and changes 
in the market values of our investments.

      Interest Rate Risk.  Our exposure to market rate risk for 
changes in interest rates relates primarily to our investment 
portfolio.  We have not used derivative financial instruments in 
our investment portfolio.  We invest our excess cash in debt 
instruments of the U.S. Government and its agencies, and in high-
quality corporate issuers and, by policy, limits the amount of 
credit exposure to any one issuer.  We protect and preserve our 
invested funds by limiting default, market and reinvestment risk. 

     Investments in both fixed rate and floating rate interest 
earning instruments carries a degree of interest rate risk.  Fixed 
rate securities may have their fair market value adversely 
impacted due to a rise in interest rates, while floating rate 
securities may produce less income than expected if interest rates 
fall.  Due in part to these factors, our future investment income 
may fall short of expectations due to changes in interest rates or 
we may suffer losses in principal if force to sell securities 
which have declined in market value due to changes in interest 
rates.

      Investment Risk.  We invest in equity instruments of 
privately-held, information technology companies for business and 
strategic purposes.  These investments are included in other long-
term assets and are accounted for under the cost method when 
ownership is less that 20%.  For these non-quoted investments, our 
policy is to regularly review the assumptions underlying the 
operating performance and cash flow forecasts in assessing the 
carrying values.  We identify and record impairment losses on 
long-lived assets when events and circumstances indicate that such 
assets might be impaired.  In February 1999, one of these 
investments in a privately-held company became a marketable equity 
security when the investees completed an initial public offering.  
Such investment, which is in the Internet industry, is subject to 
significant fluctuations in fair market value due to the 
volatility of the stock market, and is recorded as long-term 
investments.


Item 7A.  Quantitative and Qualitative Disclosures About Market 
Risk

     We are exposed to the impact of interest rate changes and changes 
in the market values of our investments.

     Interest Rate Risk.  Our exposure to market rate risk for 
changes in interest rates relates primarily to our investment 
portfolio.  We have not used derivative financial instruments in 
our investment portfolio.  We invest our excess cash in debt 
instruments of the U.S. Government and its agencies, and in high-
quality corporate issuers and, by policy, limits the amount of 
credit exposure to any one issuer.  We protect and preserve our 
invested funds by limiting default, market and reinvestment risk. 

     Investments in both fixed rate and floating rate interest 
earning instruments carries a degree of interest rate risk.  Fixed 
rate securities may have their fair market value adversely 
impacted due to a rise in interest rates, while floating rate 
securities may produce less income than expected if interest rates 
fall.  Due in part to these factors, our future investment income 
may fall short of expectations due to changes in interest rates or 
we may suffer losses in principal if force to sell securities 
which have declined in market value due to changes in interest 
rates.

     Investment Risk.  We invest in equity instruments of 
privately-held, information technology companies for business and 
strategic purposes.  These investments are included in other long-
term assets and are accounted for under the cost method when 
ownership is less that 20%.  For these non-quoted investments, our 
policy is to regularly review the assumptions underlying the 
operating performance and cash flow forecasts in assessing the 
carrying values.  We identify and record impairment losses on 
long-lived assets when events and circumstances indicate that such 
assets might be impaired.  In February 1999, one of these 
investments in a privately-held company became a marketable equity 
security when the investees completed an initial public offering.  
Such investment, which is in the Internet industry, is subject to 
significant fluctuations in fair market value due to the 
volatility of the stock market, and is recorded as long-term 
investments.


<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent Auditors Report

The Board of  Directors, 
CNET, Inc.

We have audited the accompanying consolidated balance sheets of CNET, 
Inc. and subsidiaries as of December 31, 1998 and 1997 and the 
related consolidated statements of operations, stockholders' equity, 
and cash flows for each of the years in the three-year period ended 
December 31, 1998.  These consolidated financial statements are the 
responsibility of the Company's management. Our reponsibility is to 
express an opinion on these consolidated financial statements based on
our audits.

We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial 
statements are free of material misstatements.  An audit includes 
examining, on a test basis, evidence supporting the amounts and 
disclosures in the financial statements.  An audit also includes 
assessing the accounting principles used and significant estimates 
made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to 
above present fairly, in all material respects, the consolidated 
financial position of CNET, Inc. and subsidiaries as of December 31, 
1998 and 1997, and the results of their operations and their cash 
flows for each of the years in the three-year period ended December 
31, 1998, in conformity with generally accepted accounting 
principles.

                                                        KPMG LLP
San Francisco, California
February 9, 1999, except
as to paragraph 5 of 
footnote 5 and footnote 10,
which are as of March 22, 1999


<PAGE>


                               CNET, INC.
                       CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                          December 31,
                                                  --------------------------
                                                      1998          1997
                                                  ------------  ------------
<S>                                               <C>           <C>
                     ASSETS
Current assets:
  Cash and cash equivalents                       $51,533,655   $22,553,988
  Accounts receivable, net of allowance for
   doubtful accounts of $1,721,625 and $461,000
   in 1998 and 1997, respectively                  15,074,639     9,149,762
  Accounts receivable, related party                1,710,745          --
  Other current assets                              1,704,765     1,134,957
  Restricted cash                                     945,330     1,599,113
                                                  ------------  ------------
   Total current assets                            70,969,134    34,437,820

Property and equipment, net                        15,325,512    19,553,537
Other assets                                        2,059,806     4,270,321
                                                  ------------  ------------
   Total assets                                   $88,354,452   $58,261,678
                                                  ============  ============

        LIABILITIES AND  STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                 $3,476,654    $3,567,783
  Accrued liabilities                               6,592,819    10,080,504
  Current portion of long-term debt                 1,112,512     1,358,772
                                                  ------------  ------------
     Total current liabilities                     11,181,985    15,007,059

Long-term debt                                        569,245     2,611,815
                                                  ------------  ------------
     Total liabilities                             11,751,230    17,618,874

Commitments and contingencies

Stockholders' equity:
  Common stock; $0.0001 par value;
    50,000,000 shares authorized; 34,119,948
    and 29,324,370 shares issued and
    outstanding in 1998 and 1997,
    respectively                                        3,412         2,936
  Additional paid-in capital                      127,770,245    94,696,127
  Accumulated deficit                             (51,170,435)  (54,056,259)
                                                  ------------  ------------
     Total stockholders' equity                    76,603,222    40,642,804
                                                  ------------  ------------
     Total liabilities and stockholders' equity   $88,354,452   $58,261,678
                                                  ============  ============
<FN>
     See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>

                                     CNET, INC.
                           CONDOLIDATED STATEMENTS OF OPERATIONS

<TABLE> 
<CAPTION> 
                                                Year Ended December 31,
                                     ------------------------------------------
                                         1998           1997           1996
                                     -------------  -------------  ------------
<S>                                  <C>            <C>            <C>
Revenues:
   Internet                           $49,374,195    $26,717,280   $10,133,684
   Television                           7,057,885      6,922,309     4,696,664
                                     -------------  -------------  ------------
     Total revenues                    56,432,080     33,639,589    14,830,348
                                     -------------  -------------  ------------
Cost of revenues:
   Internet                            23,291,215     19,812,604     9,120,545
   Television                           6,741,133      6,904,471     6,212,959
                                     -------------  -------------  ------------
      Total cost of revenues           30,032,348     26,717,075    15,333,504
                                     -------------  -------------  ------------
      Gross profit (deficit)           26,399,732      6,922,514      (503,156)
                                     -------------  -------------  ------------
Operating expenses:
   Sales and marketing                 14,530,355     11,602,746     7,821,454
   Development                          3,454,387     13,608,846     3,438,333
   General and administrative           6,806,886      6,848,793     3,772,368
   Unusual items                         (921,839)     9,000,000          --
                                     -------------  -------------  ------------
     Total operating expenses          23,869,789     41,060,385    15,032,155
                                     -------------  -------------  ------------
     Operating income(loss)             2,529,943    (34,137,871)  (15,535,311)

Other income(expense):
   Equity losses                      (11,795,944)    (2,228,430)   (1,865,299)
   Gain on sale of equity investments  10,450,342     11,026,736          --
   Interest income (expense), net       1,415,616        611,473       451,948
                                     -------------  -------------  ------------
     Total other income (expense)          70,014      9,409,779    (1,413,351)
                                     -------------  -------------  ------------
     Net income (loss)                 $2,599,957   ($24,728,092) ($16,948,662)
                                     =============  =============  ============

Basic net income (loss) per share           $0.08         ($0.91)       ($1.06)
                                     =============  =============  ============

Diluted net income (loss) per share         $0.07         ($0.91)       ($1.06)
                                     =============  =============  ============

Shares used in calculating             31,932,530     27,223,642    15,927,794
  basic per share data               =============  =============  ============

Shares used in calculating
  diluted per share data               34,852,938     27,223,642    15,927,794
                                     =============  =============  ============

<FN>
     See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>

                                  CNET, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                 Convertible
                               Preffered Stock       Common Stock     Additional                  Total
                            -------------------- -------------------   Paid-in    Accumulated  Stockholders'
                              Shares     Amount    Shares    Amount    Capital      Deficit       Equity
                            ----------- -------- ----------- ------- ------------ ------------ ------------
<S>                         <C>         <C>      <C>         <C>     <C>          <C>          <C>
Balances as of
 December 31, 1995           3,439,202   34,392   5,400,000     540   15,143,363  (12,379,505)   2,798,790
Issuance of Series B
 convertible preferred
 stock                         366,144    3,661        --        --      362,483         --        366,144
Issuance of Series D
 convertible preferred
 stock                           2,588       26        --        --       33,307         --         33,333
Issuance of Series E
 convertible preferred
 stock                         453,169    4,532        --        --    8,364,102         --      8,368,634
Issuance of warrants             --         --         --        --      164,000         --        164,000
Public stock offering,
 net of $3,151,406
 issuance costs                  --         --    5,200,000     520   37,776,074         --     37,776,594
Conversion of preferred
 stock into common stock    (4,261,103) (42,611) 15,633,346    1564       41,047         --          --
Exercise of stock options        --         --      306,000      30      369,530         --        369,560
Employee stock purchase
 plan                            --         --       23,578       2      169,759         --        169,761
Net loss                         --         --         --        --          --   (16,948,662) (16,948,662)
                            ----------- -------- ----------- ------- ------------ ------------ ------------
Balances as of
 December 31, 1996               --         --   26,562,924   2,656   62,423,665  (29,328,167)  33,098,154
Exercise of stock options        --         --      822,914      86    1,175,494         --      1,175,580
Employee stock purchase
 plan                            --         --       70,026       8      705,403         --        705,411
Issuances of common stock        --         --    1,868,506     186   23,391,565         --     23,391,751
Warrant compensation             --         --         --        --    7,000,000         --      7,000,000
Net loss                         --         --         --        --          --   (24,728,092) (24,728,092)
                            ----------- -------- ----------- ------- ------------ ------------ ------------
Balances as of
 December 31, 1997               --         --   29,324,370   2,936   94,696,127  (54,056,259)  40,642,804
Exercise of stock options
 and warrants                    --         --    2,027,662     202    6,246,092         --      6,246,294
Employee stock purchase
 plan                            --         --       56,386       4      723,553         --        723,557
Issuances of common stock        --         --    1,625,600     162   26,212,556         --     26,212,718
Issuance of common stock in
 relation to the UVision
 acquisition                     --         --    1,089,930     108     (108,083)     285,867      177,892
Net income                       --         --        --         --       --        2,599,957    2,599,957
                            ----------- -------- ----------- ------- ------------ ------------ ------------
Balances as of
 December 31, 1998               --         --   34,119,948   3,412  127,770,245  (51,170,435)  76,603,222
                            =========== ======== =========== ======= ============ ============ ============
<FN>                                                                                                   
         See accompanying notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>


                                    CNET, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                        ----------------------------------------
                                            1998          1997          1996
                                        ------------- ------------- ------------
<S>                                     <C>           <C>           <C>
Cash flows from operating activities:
  Net income(loss)                        $2,599,957  ($24,728,092)($16,948,662)
  Adjustments to reconcile net loss
   to net cash provided (used) in 
   operating activities:
    Depreciation and amortization          6,341,217     5,054,980    1,928,496
    Amortization of program costs          5,802,074     6,548,937    4,673,201
    Interest expense converted into 
      preferred stock                            --            --       222,141
    Allowance for doubtful accounts        1,260,625       361,214       75,000
    Reserve for joint venture                    --     (1,248,799)   1,865,299
    Warrant compensation expense                 --      7,000,000           --
    Changes in operating assets and
     liabilities:
      Accounts receivable                 (9,730,143)   (4,218,799)  (4,165,939)
      Other current assets                   455,340      (916,690)      29,750
      Other assets                         4,933,084    (1,515,407)  (1,237,499)
      Accounts payable                       328,540       228,931    2,807,549
      Accrued liabilities                 (2,833,799)    7,534,213    1,839,558
                                        ------------- ------------- ------------
        Net cash provided (used) in 
          operating activities             9,156,895    (5,899,512)  (8,911,106)
                                        ------------- ------------- ------------
Cash flows from investing activities:
  Purchases of equipment, excluding
   capital leases                         (4,879,353)  (12,213,050) (10,739,354)
  Purchases of programming assets         (6,083,639)   (5,826,476)  (5,438,092)
  Loan to joint venture                          --     (1,639,139)  (1,776,588)
  Investment in Vignette Corporation             --            --      (511,500)
                                        ------------- ------------- ------------
        Net cash used in investing
          activities                     (10,962,992)  (19,678,665) (18,465,534)
                                        ------------- ------------- ------------
Cash flows from financing activities:
  Net proceeds from issuance of
   convertible preferred stock                   --            --     4,543,826
  Net proceeds from inital public
   offering                                      --            --    37,776,594
  Net proceeds from issuance of
   common stock                           26,212,718    23,391,751           --
  Net proceeds from the issuance of common
    stock in relation to the UVision 
    acquisition                             (107,975)
  Allocated proceeds from issuance 
   warrants                                      --            --       164,000
  Proceeds from stockholder reveivable           --            --       594,654
  Proceeds from employee stock
   purchase plan                             723,557       705,411      169,761
  Proceeds from debt                             --      3,280,806    3,636,000
  Proceeds from exercise of stock
  and warrants                             6,246,294     1,175,580      141,050
  Principal payments on capital leases      (416,377)     (238,688)    (104,542)
  Principal payments on equipment note    (1,872,453)     (338,630)     (91,851)
                                        ------------- ------------- ------------
        Net cash provided by
          financing activities            30,785,764    27,976,230   46,829,492
                                        ------------- ------------- ------------
Net increase (decrease) in cash and
 cash equivalents                         28,979,667     2,398,053   19,452,852
Cash and cash equivalents at
 beginning of period                      22,553,988    20,155,935      703,083
                                        ------------- ------------- ------------
Cash and cash equivalents at end
 of period                               $51,533,655   $22,553,988  $20,155,935
                                        ============= ============= ============

Supplemental disclosure of cash flow
 information:
  Interest paid                             $324,762      $254,790      $88,792


Supplemental disclosure of noncash
 transactions:
  Non cash portion of Investment          $3,066,449          --       $105,000


  Capital lease obligations incurred            --        $408,408     $297,436


  Note issued in exchange for
   equipment                                    --            --       $137,551

  Exercise of stock options through
    issuance of note receivable from
    stockholder                                 --            --       $594,654

  Conversion of preferred stock into
    common stock                                --            --        $42,611

  Conversion of debt and interest
   into 0,0, and 208,548
   shares of convertible preferred
   stock, respectively                          --            --     $3,858,141

<FN>
     See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>


                                CNET, INC.
                       NOTES TO FINANCIAL STATEMENTS


(1)   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 DESCRIPTION OF BUSINESS

     CNET, Inc. (the "Company") was incorporated in the state of 
Delaware in December 1992 and is a media company integrating television 
programming with a network of channels on the World Wide Web.  The Company 
produces five television programs and operates an Internet network
focused on computers and technologies.  Revenues for television are
derived primarily from licensing fees for the distribution of the  
television programming.  Internet revenues are primarily derived from
the sale of advertising. 


PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of 
CNET,Inc., and its majority owned controlled subsidiaries.  All significant 
intercompany balances and transactions have been eliminated in 
consolidation.

 CASH AND CASH EQUIVALENTS 

     The Company considers all highly liquid investments with original 
maturities of three months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost less accumulated 
depreciation and amortization. Depreciation is computed using the 
straight-line method over the estimated useful lives of the assets which 
range from three to seven years. Property and equipment recorded under 
capital leases and leasehold improvements are amortized on a straight-
line basis over the shorter of the lease terms or their estimated useful 
lives. 

 CONCENTRATION OF CREDIT RISK

     Financial instruments potentially subjecting the Company to 
concentrations of credit risk consist primarily of periodic 
investments of excess cash and trade accounts receivable.
Substantially all of the Company's accounts receivable are derived from
domestic sales.  Historically, the Company has not incurred material
credit related losses.  The Company invests excess cash in low risk,
liquid instruments.  No losses have been experienced on such investments.

 DEVELOPMENT

     Development expenses include expenses which were incurred in the 
development of new Internet channels and in research and development of 
new or improved technologies that enhance the performance of the 
Company's Internet channels. Costs for development are expensed as 
incurred. Costs are no longer recognized as development expenses when a 
new Internet channel is launched and is generating revenue.

 INCOME TAXES

     The Company accounts for income taxes using the asset and liability 
method. Deferred tax assets and liabilities are recognized for the 
future tax consequences attributable to differences between the 
financial statement carrying amounts of existing assets and liabilities 
and their respective tax bases. Deferred tax assets and liabilities are 
measured using enacted tax rates expected to apply to taxable income in 
the years in which those temporary differences are expected to be 
recovered or settled. The effect on deferred income tax assets and 
liabilities of changes in tax rates is recognized in income in the 
period that includes the enactment date. 

 REVENUE RECOGNITION

     Through June 30, 1996, television revenues were principally derived 
from the sale of advertising during the Company's CNET CENTRAL 
television program and were recognized upon broadcast based on the 
number of viewers of the program. Effective July 1, 1996, and subsequently
renewed through June 30, 1999, the Company licensed a two hour programming
block it produces for broadcast on a cable network for a license fee
limited to the costs of production of the programming block and
further limited to certain maximum amounts per the contract.  In
September 1996, the Company began producing TV.com which was exclusively
exclusively distributed by Golden Gate Productions, L.P., ("GGP").
The revenue from this program was used first to offset costs of
distribution and production and thereafter was shared equally by the
Company and GGP. In August 1997, the assets of GGP were acquired by a 
third party who agreed to distribute the program through Trans World
International, ("TWI"), under the same terms.  Beginning March 1, 1998,
the Company assumed responsibility for the sale of advertisements on
TV.com and pays a distribution fee to the third party.

     Internet revenues consist primarily of revenues derived from the
sale of advertisements on pages delivered to users of our Internet
network.  Advertising programs are generally delivered on either an
"impression" based program or a "performance" based program.  An
impression based program earns revenues when an advertisement is
delivered to a user of our Internet network.  A performance based
program earns revenues when a user of our Internet network responds to
an advertisement by linking to an advertisers Internet network.
Advertising revenues are recognized in the period in which the 
advertisements are delivered.  In the fourth quarter of 1998, the
Company began generating revenue from lead-based compensation from
its shopping services.

NET INCOME (LOSS) PER SHARE

Basic net income per share is computed using the weighted average
number of outstanding shares of common stock and diluted net income
per share is computed using the weighted average number of 
outstanding shares of common stock and common stock equivalents.
Basic and diluted net loss per share are computed using the
weighted average number of outstanding shares of common stock. Net
loss per share for the years ended December 31, 1997 and 1996, does
not include the effect of approximately 5,077,844 and 3,128,932
stock options, with weighted average exercise prices of $12.37 and
$3.55, respectively, because their effects are anti-dilutive.

     The following table sets forth the computation of net income
(loss) per share (in thousands, except per share data):

                                                Year Ended December 31,
                                       ---------------------------------------
                                             1998         1997        1996
                                       -------------- ------------ -----------
Net income (loss)                            $2,600     ($24,728)   ($16,949)
Basic and diluted:                     ============== ============ ===========
 Weighted average common shares
  outstanding used in computing basic        31,933       27,224      15,928 
  net income(loss) per share           ============== ============ ===========
 Basic net income(loss) per share             $0.08       ($0.91)     ($1.06)
                                       ============== ============ ===========
 Weighted average common shares
  and common stock equivalents 
  outstanding used in computing diluted
  net income(loss) per share                 34,853       27,224      26,928 
                                       ============== ============ ===========
 Diluted net income(loss) per share           $0.07       ($0.91)     ($1.06)
                                       ============== ============ ===========


 STOCK-BASED COMPENSATION

      The Company accounts for its stock-based employee compensation plans 
using the intrinsic value method.  As such, compensation expense is recorded 
on the date of grant if the current market price of the underlying stock 
exceeded the exercise price.

 COMPREHENSIVE INCOME(LOSS)

     The Company has no significant comprehensive income(loss) and, 
accordingly, the comprehensive income(loss) is the same as net income
(loss) for all periods.

 ADVERTISING EXPENSE

     The cost of advertising is expensed as incurred.  Such costs are
included in selling and marketing expense and totalled approximately
$5,081,308, $2,267,154 and $3,697,314 during the years ended December 31,
1998, 1997 and 1996, repectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of the Company's cash and cash equivalents, 
accounts receivable, accounts payable and long-term debt approximate 
their respective fair values.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

     The Company reviews its long-lived assets and certain    
identifiable intangibles whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a 
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset.  If such assets are
considered to be impaired, the impairment to be recognized is 
measured by the amount by which the carrying amount of the assets
exceed the fair value of the assets.  Assets to be disposed of are
reported at the lower of the carrying amount or fair  value less 
costs to sell. 

USE OF ESTIMATES

     The Company's management has made a number of estimates and 
assumptions relating to the reporting of assets and liabilities, 
revenues and expenses, and the disclosure of contingent assets and 
liabilities to prepare these financial statements in conformity with 
generally accepted accounting principles. Actual results could differ 
from those estimates. 

 BARTER TRANSACTIONS

     The Company trades advertisements on its Internet sites in exchange 
for advertisements on the Internet channels of other companies. These 
revenues and marketing expenses are recorded at the fair market value of 
services provided or received, whichever is more determinable in the 
circumstances. Revenue from barter transactions is recognized as income 
when advertisements are delivered on the Company's Internet channels and 
expense from barter transactions is recognized when advertisements are 
delivered on the other companies' Internet sites.  Barter revenues were
approximately $3,369,000, $905,000, and $760,000 for the years ended 
December 31, 1998, 1997 and 1996, respectively. 


RECENT ACCOUNTING PRONOUNCEMENTS

     The FASB recently issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities."  SFAS No. 133 establishes 
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively
referred to as derivatives), and for hedging activities.  It requires
that an entity recognize all derivatives as either assets or liabilities
in the statement of financial position and measure those instruments at
fair value.  For a derivative not designated as a hedging instrument,
changes in the fair value of the derivative are recognized in earnings
in the period of change.  The Company must adopt SFAS No. 133 by July 1,
1999.  Management does not believe the adoption of SFAS No. 133 will
have a material effect on the financial position or operations of the
Company.



(2)   BALANCE SHEET COMPONENTS


CASH AND CASH EQUIVALENTS

     The carrying value of cash and cash equivalents consisted of: 

                                              December 31,
                                       ---------------------------
                                            1998          1997
                                       -------------- ------------
      Commercial paper                   $21,452,792   $2,004,131
      Money market mutual funds           23,447,941   17,034,006
      Cash                                 6,632,922    3,515,851
                                       -------------- ------------
                                         $51,533,655  $22,553,988
                                       ============== ============

     All cash equivalents have been classified as available for sale
securities as of December 31, 1998 and 1997.  

RESTRICTED CASH

     Restricted cash balance relates to certain deposits in escrow for 
leasehold improvements and as collateral for letters of credit relating   
to security deposits.


PROPERTY AND EQUIPMENT

     A summary of property and equipment follows: 

                                                      December 31,
                                               ---------------------------
                                                    1998          1997
                                               -------------- ------------
      Computer equipment                         $12,270,491  $11,769,291
      Production equipment                         2,552,420    2,241,597
      Office equipment, furniture & fixtures       3,131,737    2,230,267
      Software                                     1,845,777    1,745,660
      Leasehold improvements                       7,644,246    7,193,769
      Assets in progress                             620,165    1,533,198
                                               -------------- ------------
                                                  28,064,836   26,713,782

      Less accumulated depreciation
        and amortization                          12,739,324    7,160,245
                                               -------------- ------------
                                                 $15,325,512  $19,553,537
                                               ============== ============


     As of December 31, 1998 and 1997, the Company had equipment under
capital lease agreements of $1,168,134 , and accumulated amortization of
$1,084,125 and $694,747, respectively. 

     As of December 31, 1998,  the Company had purchased equipment
pursuant to loan agreements in the amount of $948,982.  As of
December 31, 1998 and 1997, the equipment had accumulated amortization of
$702,408 and $512,612, respectively.


 ACCRUED LIABILITIES

   A summary of accrued liabilities follows:

                                                December 31,
                                       ---------------------------
                                            1998          1997
                                       -------------- ------------
   Compensation and related benefits      $4,007,614   $2,594,386
   Marketing and advertising                 577,872      619,101
   Deferred Revenue                          594,212    3,233,681
   Lease Abandonment                              --    1,300,000
   Other                                   1,413,121    2,333,336
                                       -------------- ------------
                                          $6,592,819  $10,080,504
                                       ============== ============

 DEBT

   During 1997, the Company secured a $10.0 million line of credit from
a bank.  The line of credit consisted of a $5.0 million operating line of 
credit at an interest rate of prime (8.5%) plus 0.5%, secured by all of the 
Company's tangible assets and a $5.0 million equipment line at an interest
rate of prime (8.5%) plus 1%, for up to 65% of capital equipment purchases. 
The Company did not renew the $10.0 million line of credit upon its
expiration in July 1998.  As of December 31, 1997, the Company had not yet
drawn any of the operating line of credit and had drawn $768,000 on the 
capital equipment line which was paid off in July, 1998.  In addition, the
Company had proceeds of $2.5 million from an asset based loan bearing
interest equal to the treasury rate plus 5.56% secured by certain 
capital equipment.  The $2.5 million asset based loan is subject to 
certain financial covenants.  At December 31, 1998 the Company was in 
compliance with those covenants.

   During 1996 and 1995, the Company financed certain production equipment 
in the amounts of $189,256 and $759,726, repectively, through notes at an
an interest rate of 12.25%. The notes are secured by the equipment 
financed. The current and long-term portion of the notes are included
in current portion of long-term debt and long-term debt, respectively, 
in the accompanying balance sheet (along with capital lease obligations,
Note 4). The aggregate annual principal payments for notes payable
outstanding as of December 31, 1998, are summarized as follows:

     YEAR ENDING DECEMBER 31,          
     -----------------------
          1999                               994,177
          2000                               535,728
          2001                                33,517
                                       --------------
                                          $1,563,422
                                       ==============

(3)   INCOME TAXES

     The Company's effective tax rate differs from the statutory federal income
tax rate of 34% as shown in the following schedule: 

                                                Year Ended December 31,
                                       ----------------------------------------
                                            1998          1997            1996
                                       -------------- ------------ ------------
 Income tax benefit at statutory rate          34.0%        34.0%        34.0%
 Operating losses with no current tax
  benefit                                     (34.0%)      (34.0%)      (34.0%)
                                       -------------- ------------ ------------
  Effective tax rate                              --           --          --
                                       ============== ============ ============


The tax effects of temporary differences that give rise to significant portions
of deferred tax assets are presented below: 

                                                Year Ended December 31,
                                       ----------------------------------------
                                            1998         1997         1996
                                       -------------- ------------ ------------
 Capitalized "start-up" expenses         $457,000       $818,000   $1,217,000
 Net operating losses                  22,184,000     16,268,000    9,596,000
 Accruals, reserves and other           3,275,000      6,289,000    1,027,000
                                       -------------- ------------ ------------
                                       25,916,000     23,375,000   11,840,000
 Less valuation allowance              25,916,000     23,375,000   11,840,000
                                       -------------- ------------ ------------
                                      $        --    $        --  $     --
                                       ============== ============ ============



     The Company has a valuation allowance as of December 31, 1998, which fully 
offsets its gross deferred tax assets due to the Company's historical losses
and the fact that there is no guarantee the Company will generate sufficient
taxable income in the future to be able to realize any or all of the deferred
tax assets.  The net change in the total valuation allowance for the year 
ended December 31, 1998, was $2,541,000

     As of December 31, 1998, the Company has approximately $61,000,000 of net
operating losses for federal income tax purposes, which expire between 2008 and
2018. The Company also has approximately $24,000,000 of net operating loss
carryforwards for state income tax purposes, which expire between 1999 and 2003.
Included in the deferred tax assets above is approximately $5,500,000 related
to stock option compensation for which the benefit, when realized, will be
an adjustment to equity.

     The Company may have experienced an "ownership change" as defined by
section 382 of the Internal Revenue Code.  If an ownership change has occurred,
the Company's ability to utilize its net operating losses may be limited. 


(4)   LEASES

     The Company has several non-cancelable leases primarily for general office,
facilities, and equipment that expire over the next ten years. Future minimum
lease payments under these leases are as follows: 

                                          Capital      Operating
     YEAR ENDING DECEMBER 31,              Leases        Leases
     -----------------------           -------------- ------------
 1999                                       $129,140   $4,548,163
 2000                                            --     3,519,185
 2001                                            --     2,396,254
 2002                                            --     1,421,819
 2003                                            --       981,674
 Thereafter                                      --       598,910
                                       -------------- ------------
 Total minimum lease payments                129,140  $13,466,005
                                                      ============
 Less amount representing 
  interest                                    10,805
                                       --------------
 Capital lease obligation, all current      $118,335
                                       ==============

     Rental expense from operating leases amounted to $3,226,310, $2,242,186,  
and $789,678 for the years ended December 31, 1998, 1997 and 1996,
respectively.

(5)   STOCKHOLDERS' EQUITY

ISSUANCE OF COMMON STOCK

     On July 2, 1996, the Company effected an initial public offering (IPO) of 
4,000,000 shares of its common stock for $8 per share.  Simultaneously with 
the IPO, the Company sold 1,200,000 shares of common stock to Intel Corporation 
at 93% of the IPO price.  The net proceeds from these two offerings (after 
deducting underwriting discounts and commissions and offering expenses) were 
$37.8 million, and were received on July 8, 1996.

      On July 21, 1997, the Company sold 402,506 shares of common stock in
a private placement to Intel for aggregate proceeds of approximately $5.3
million.  On December 18, 1997, the Company sold 1,466,000 shares of common
stock in a private placement to three "accredited investors" (as defined
in Rule 501(a) under the Securities Act of 1933) for aggregate net proceeds
of approximately $18.1 million.

     On May 12, 1998, the Company completed the acquisition of
U.Vision, Inc., a California corporation ("U.Vision"), through a merger
between U.Vision and a wholly-owned acquisition subsidiary of the Company
("the merger"), in which the Company issued 1,089,930 shares of common stock
in exchange for all of the outstanding shares of U.Vision.  U.Vision
owned and operated ComputerEsp, a pricing and availability engine for
buying computer products on the Internet.  Subsequent to the merger, the 
Company relaunched the service as Shopper.com.  The Company recorded
this transaction using the pooling-of-interests accounting method and
recorded the financial results of U.Vision in its financial statements
effective April, 1, 1998.  The financial statements of the Company prior
to April 1, 1998 have not been adjusted for the financial results of
U.Vision as the impact was not material.  The shares used in calculating
the basic and diluted net loss per share data have been adjusted in
prior periods to reflect the U.Vision transaction as outstanding
for all periods.

     In June of 1998, the Company completed the sale of 1,625,600 shares
of common stock to National Broadcasting Company, Inc., ("NBC").  The
aggregate purchase price for the shares sold was $26.2 million.

STOCK SPLIT

     On March 8, 1999, the Company effected a two-for-one split of its
common stock.  The accompanying consolidated financial statements
have been retroactively adjusted to reflect the stock split.

     In May 1996, the Company effected a three-for-two split of its common 
stock in connection with the IPO. The accompanying consolidated financial 
statements have been retroactively adjusted to reflect the stock split.

 STOCK OPTION PLAN

     In 1994, the Board of Directors adopted a Stock Option Plan (the "1994 
Plan") pursuant to which the Company's Board of Directors may grant stock
options to officers and key employees. The 1994 Plan authorizes grants of 
options to purchase up to 5,500,000 shares of authorized but unissued common 
stock. In 1997, the stockholders approved the 1997 Stock Option Plan (the
1997 Plan").  The 1997 Plan authorizes grants of options to purchase up to
5,000,000 shares of authorized but unissued common stock.  Stock options for
both the 1994 and 1997 Plans are granted with an exercise price equal to the
fair market value at the date of grant.  All stock options have 10-year 
terms and generally vest and become fully exercisable between three and
four years from the date of grant.

     A summary of the status of the Company's stock option plans as of December
31, 1998, 1997 and 1996, and changes during each of the years then ended:

                                                        Weighted
                                           Number       Average
                                             of         Exercise
                                           Shares        Prices
                                       -------------- ------------
 Balance as of December 31, 1995           2,952,500         0.80
 Granted                                   1,728,400         5.72
 Exercised                                (1,393,934)        0.52
 Cancelled                                  (158,034)        2.73
                                       -------------- ------------
 Balance as of December 31, 1996           3,128,932         3.55
 Granted                                   2,647,046        11.87
 Exercised                                  (889,392)        1.44
 Cancelled                                  (243,504)        7.04
                                       -------------- ------------
 Balance as of December 31, 1997           4,643,082         8.42
 Granted                                   2,472,900        16.74
 Exercised                                  (920,638)        5.12
 Cancelled                                (1,117,460)       11.60
                                       -------------- ------------
 Balance as of December 31, 1998           5,077,884       $12.37
                                       ============== ============

     As of December 31, 1998, 1997 and 1996, the number of options
exercisable was 1,050,016, 858,888 and 804,794, respectively, and the 
weighted average of those options was $7.01, $3.06, and $1.11, respectively. 
As of December 31, 1998, there were 2,218,152 additional shares available
for grant under the Plans.


     The Company applies APB Opinion No. 25 in accounting for the Plans and, 
accordingly, no compensation cost has been recognized for the Plans in the 
financial statements.  Had the Company determined compensation cost based on 
the fair value at the grant date for its stock options under SFAS 123, 
the Company's net income(loss) and net income (loss) per share would have 
been increased to the pro forma amounts indicated below:

                                                Year Ended December 31,
                                       ----------------------------------------
                                                1998      1997         1996
                                       -------------- ------------ ------------
     Net income(loss)                   
       As reported                       $2,599,957 ($24,728,092)($16,948,662)
       Pro forma                       ($13,130,574)($29,872,164)($18,259,031)
     Basic net income(loss) per share
       As reported                            $0.08       ($0.91)      ($1.06)
       Pro forma                             ($0.41)      ($1.10)      ($0.81)
     Diluted net income(loss) per share
       As reported                            $0.07       ($0.91)      ($1.06)
       Pro forma                             ($0.38)      ($1.10)      ($0.81)


     The effects of applying SFAS 123 in this pro forma disclosure is
not indicative of the effects on reported results for future years.  SFAS
No. 123 does not apply to awards prior to 1995.

     The weighted-average fair value of options granted in 1998, 1997 and 1996,
was $16.74, $11.87 and  $5.72, respectively.  

     The fair value of each option grant is estimated on the date of grant
using Black Scholes option-pricing model with the following
weighted-average assumptions used for grants in 1998, 1997 and 1996,
respectively: no dividend yield, expected volatility of 75%, risk-free
interest rate of 6%, and an expected life of five years, five years
and one year.

     The following table summarizes information about stock options 
outstanding as of December 31, 1998:
<TABLE>
<CAPTION>
                           Options Oustanding               Options Exercisable
                   ------------------------------------  ------------------------
                                 Weighted
                      Number      Average    Weighted       Number     Weighted
                   Outstanding   Remaining    Average    Exercisable    Average
     Range of         As of     Contractual  Exercise       As Of      Exercise
 Exercise Prices      12/31/98     Life        Price        12/31/98     Price
------------------ ------------ ----------- -----------  ------------ -----------
<S>                <C>          <C>         <C>          <C>          <C>

 $0.6000    $4.2950    543,544        6.86     $2.5307       376,086     $1.9915
 $6.0000    $7.3150    551,624        7.56     $6.5059       253,860     $6.4988
 $7.7500   $10.0650     80,250        8.10     $8.9125        18,626     $8.4692
$10.3750   $10.3750    638,298        8.92     $6.9167       154,700    $10.3750
$10.6900   $12.0650    805,124        8.63    $11.7106       168,184    $11.6537
$12.1250   $13.7500    173,736        8.53    $13.3392        36,138    $13.3415
$13.9400   $13.9400    921,574        9.24    $13.9400         3,876    $13.9400
$14.0000   $14.7500    121,086        8.65    $14.2317        20,320    $14.0931
$16.1250   $16.1250    664,000        9.42    $16.1250          --          --
$16.4400   $34.2500    578,648        9.63    $23.3122        18,226    $22.6535
                   ------------                          ------------
 $0.6000   $34.2500  5,077,884        8.68    $12.3702     1,050,016     $7.0065
                   ============                          ============

</TABLE>
401(k) PROFIT SHARING PLAN

In 1996, the Company adopted a 401(k) Profit Sharing Plan (the "401(k) 
Plan") that is intended to qualify under Section 401(k) of the Internal 
Revenue Code of 1986, as amended. The 401(k) Plan covers substantially 
all of the Company's employees. Participants may elect to contribute a 
percentage of their compensation to this plan, up to the statutory 
maximum amount. The Company may make discretionary contributions to the 
401(k) Plan, but has not done so to date. 

     EMPLOYEE STOCK PURCHASE PLAN

     In July 1996, the Company adopted an Employee Stock Purchase Plan 
that covers substantially all employees. Participants may elect to 
purchase the Company's stock at a 10% discount of the lower of the
closing price at the beginning or end of the quarter by contributing a. 
percentage of their compensation.  The maximum percentage allowed is 10%.

(6)   MAJOR CUSTOMERS AND CONTRACTS

 CUSTOMERS

     For the year ended December 31, 1998, one customer, USA Networks,
accounted for approximately 10% of the Company's revenues.  For the years
ended December 31, 1997 and 1996, two customers accounted for over 10%
of the Company's revenues with USA Networks accounting for approximately 
16% and 19%, and Microsoft Corporation accounting for approximately 10%
and 12% of total revenues, respectively.


CONTRACTS

     In February 1995, the Company entered into an agreement with USA 
Networks to carry its television program, CNET CENTRAL. The contract 
allowed the Company to sell the available advertising on the program. In 
connection with this agreement, the Company issued 1,033,500 common stock 
warrants at an exercise price of $1.21 per share to USA Networks. As of 
December 31, 1998, all such warrants were exercised.

    Effective July 1, 1996, the agreement with USA Networks was amended
to license to USA Networks the right to carry a two hour programming block
produced by the Company, called "Digital Domain" for broadcast on the USA
Network and The SciFi Channel for an initial term of one year.  Under
the amended agreement, USA Networks licensed the rights to Digital
Domain for a fee equal to the cost of production of the programs
up to a maximum of $5,250,000 for the first year with an option to extend
the term for an additional year.  In January 1997, USA Networks exercised
this option. 

     In addition, pursuant to the amended agreement, the Company agreed 
to pay USA Networks a fee of $1.0 million for the right to cross-market 
the Company's Internet channels on the television programs produced by the 
Company for USA Networks. During the second year extension the Company 
paid a fee of $750,000 for the right to continue such cross-
marketing activities. These fees are reported by the Company as 
marketing expenses.

     In January 1997, USA Networks exercised its option to extend its 
agreement with the Company to carry Digital Domain through June 30,
1998.  In connection with this extension to the agreement, the 
Company agreed that the warrants held by USA Networks would vest in
full on December 31, 2006, to the extent they had not previously
vested. As a result of this change, the Company incurred a one-time
charge to earnings of approximately $7.0 million during the first
quarter of 1997.

     In July 1998, the Company entered into an agreement with USA
Networks to again license to USA Networks the right to carry Digital
Domain for broadcast on the USA Network and The SciFi Channel for a
one year period.  The Company agreed to pay USA Networks a fee of
$750,000 for the right to cross-market the Company's Internet
channels on the television programs produced by the Company for USA
Networks.

     In January 1996, the Company entered into a joint venture agreement 
with E! Entertainment Television, Inc. ("E! Entertainment") that 
launched an Internet site in August 1996, called E! ONLINE, focusing on 
entertainment, news, gossip, movies and television. The Company agreed 
to provide $3,000,000 in debt financing to the joint venture during its 
first two years of operations, which amount was advanced pursuant to a 
seven year note, bearing interest at 9% per annum. In addition, the 
Company agreed to provide up to an additional $3,000,000 in equity 
capital to the joint venture through January 1999.  The Company 
accounted for its financing and investments under the modified equity 
method. Accordingly, the Company recorded all of the losses incurred by 
the joint venture through June 30, 1997, in its consolidated statement 
of operations.  The joint venture, E! Online LLC, was owned 50% by the 
Company and 50% by E! Entertainment.

      In June 1997, the Company sold its 50% equity position and certain 
technology licenses and marketing and consulting services to its joint 
venture partner for $10.0 million in cash and a $3.2 million note 
receivable, which was included in other assets in the balance sheet and  
certain additional payments for up to three years.  The note receivable
was paid in full in November, 1998.

      In August 1996, the Company entered into an agreement with  GGP 
whereby the Company produced a television program, TV.COM, which was 
exclusively distributed by GGP.  Any revenues from the distribution of 
TV.COM were first used to offset costs of distribution and production 
and thereafter were shared equally by CNET and GGP.  In August 1997, the 
assets of GGP were acquired by a third party who has agreed to 
distribute the program through TWI under the same terms and conditions. 
Beginning March 1, 1998, the Company assumed responsibility for the
sale of advertisements on TV.com and pays a distribution fee to TWI.


(7)   UNUSUAL ITEMS

      In the fourth quarter of 1997, the Company recognized an expense 
of $1.3 million related to lease abandonment costs and recognized an 
expense of $700,000 relating to a write off of Internet domain names that
the Company had determined that it would no longer use.  Through the
fourth quarter of 1998, the Company had incurred expenses of $379,000
related to the abandonment of excess real estate and during the fourth 
quarter the Company determined that it had completed the abandonment
of excess real estate.  Accordingly, the Company reversed approximately
$922,000 of this expense in the fourth quarter of 1998.

      In the first quarter of 1997, the Company incurred a one-time, 
non-cash expense of $7.0 million related to an amendment to the warrant 
agreement with USA Networks whereby the Company agreed that the warrants 
held by USA would vest in full on December 31, 2006, to the extent that 
they had not previously vested. 

(8)   RELATED PARTY TRANSACTIONS

     Included in other assets on the accompanying balance sheets is an 
advance to an officer of the Company for $26,250. 

     An affiliate of an officer and stockholder of the Company
loaned the Company $800,000 in 1996 at an interest rate 
of 8% and was granted 9,800 warrants to purchase Series D Convertible 
preferred stock at an exercise price of $12.88 per share. This loan was 
subsequently converted to Series E convertible preferred stock, which 
were subsequently converted to 29,400 warrants to purchase common stock. 
at an exercise price of $4.29 per share.  As of December 31, 1997,
all of these warrants were outstanding and exercisable and expire in
January 2001. Such warrants were valued at estimated fair market value 
at the date of issuance. 

     A stockholder loaned the Company $3,000,000 in 1996 at an interest rate
of 8%. Interest expense related  to the loan was $34,000 in 1996.
This loan was subsequently converted to Series E convertible preferred
stock. In connection with this loan agreement, the Company granted the 
lender 36,750 warrants to purchase Series D convertible preferred  
stock at an exercise price of $12.88 per share, which were subsequently
converted to 110,250 warrants to purchase common stock at an exercise
price of $4.29 per share.  As of December 31, 1998, all of these warrants
were outstanding and exercisable and expire on dates from May 2000 to
February 2001. Such warrants were valued at estimated fair market value
at the date of issuance. 

     In April 1996, a stockholder exercised options to purchase 366,144 
shares of Series B preferred stock and 273,000 shares of common stock 
for an aggregate of $694,654. The consideration was paid by $100,000 in 
cash and the issuance of a note for $594,654, which was repaid in July 
1996. Such shares of Series B preferred stock were converted into  
1,098,432 shares of common stock at the IPO.

     In December 1997, an officer of the Company purchased 16,000 shares 
of common stock for $198,000 as a participant in a private placement.

     BUYDIRECT.COM (BuyDirect) was a wholly owned division of the Company
that distributed electronic software.  On March 31, 1998, the Company
contributed its ownership in BuyDirect, and net assets related to
BuyDirect of approximately $744,000, to a new venture that is separately
owned and operated by BuyDirect's existing management group.  As part of
the transaction, the Company received a 19% ownership interest in
the new venture.  The Company uses the cost method of accounting for its
BuyDirect investment thus recorded an investment of approximately
$744,000 on its balance sheet. Initially,  the Company also entered
into a multi-year arrangement with the new venture to provide marketing
and promotion through April 30, 2000.  Effective October 31, 1998, the
Company terminated the inital contract and entered into a new agreement
in exhange for approximately $7.5 million for marketing and promotion 
through September 30, 2000.  In conjunction with the new agreement, the
Company received a promissory note maturing on October 31, 2002 in the
amount of $5.6 million.
      For the year ended December 31, 1998, the Company recognized $2,510,422
in revenues related to advertising purchased by BuyDirect and to the 
licensing of technology. As of December 31, 1998, the Company had a
$1.7 million receivable balance from BuyDirect related to 
advertising purchased, licensing of technology and payments made by
CNET on behalf of the venture.  The balance is included on the 
balance sheet as a related party accounts receivable.

     Pursuant to an agreement dated June 4, 1998 among the Company, NBC
Multimedia, Inc. a Delaware corporation ("NBC Multimedia"), and Snap
LLC, a Delaware limited liability company (the LLC), the Company and
NBC Multimedia agreed to form the LLC to operate the Snap Internet 
portal service, which was previously operated as a division of
the Company.  In connection with the formation and initial capitalization
of the LLC, which was completed on June 30, 1998, the Company 
contributed to the LLC substantially all of its assets used exclusively
in the operation of the Snap service.  Initially, the LLC will be owned
81% by the Company and 19% by NBC Multimedia, however, NBC Multimedia 
has an option to increase its ownership stake in the LLC to 60% and 
currently shares control of the LLC with the Company.  The
accompanying financial statements present Snap's financial results using
the equity method of accounting effective January 1, 1998.   Included in
equity losses on the accompanying 1998 statement of operations are losses 
of $11,796,344 related to Snap. As of December 31, 1998 the Company's 
investment in Snap has been reduced to zero.

(9)    SEGMENT INFORMATION

     The Company has adopted the provisions of SFAS No. 131, "Disclosure 
About Segments of an Enterprise and Related Information."  SFAS No. 131
establishes standards for the reporting by public business enterprises
of information about operating segments, products and services, 
geographic areas and major customers.  The method for determining what
information to report is based on the way that management organizes the
operating segments within the Company for making operating decisions and
assessing financial performance.
     The Company's chief operating decision maker is considered to be the
Company's Chief Executive Officer ("CEO").  The CEO reviews financial
information presented on a consolidated basis accompanied by disaggregated
information about revenue and cost of revenue by operating segment for 
purposes of making operating decisions and assessing financial performance.
The consolidated information reviewed by the CEO is identical to the
information presented in the accompanying financial statement of  
operations.  The Company operates in two segments, television and CNET
Online, the Company's Internet operation.

(10)   SUBSEQUENT EVENTS

     On February 9, 1999, the Company announced an agreement with America
Online, Inc., ("AOL"), whereby the Company will become the exclusive provider 
of computer hardware and software buying guides on the AOL service and on
AOL.com, as well as the primary provider of computer buying guides on
CompuServe, Digital City, AOL Hometown and certain AOL international
properties.  Under the terms of the agreement, AOL will receive 
guaranteed payments from the Company in the amount of $14.5 million over
approximately 27 months.

     On February 16, 1999, the Company acquired NetVentures, Inc., in a stock
("NetVentures"), in a stock-for-stock exhange valued at approximately $12.5
million.  NetVentures owns and operates ShopBuilder, an online store-creation 
system.

     On February 19, 1999, the Company acquired AuctionGate Interactive, Inc.,
("AuctionGate"),in a stock-for-stock exchange valued at approximately $6.5
million.  AuctionGate owns and operates AuctionGate.com, an auction site
specializing in computer products.

     On February 26, 1999, the Company acquired the assets of Winfiles.com,
a leading downloading service, from Jenesys, LLC, for a total purchase price
of $11.5 million, payable in cash in two installments of $5.75 million 

     On March 8, 1999, the Company completed a private placement with 
gross proceeds of $172,915,0000 of 5% converitble subordinated notes.  The 
placement will be subject to certain fees and expenses.  The notes are
convertible, at the option of the noteholder, into shares of common stock.

     On March 22, 1999, the Company acquired KillerApp Corporation in a
stock-for-stock exchange valued at approximately $46 million.  KillerApp
owns and operates KillerApp.com, an online comparison shopping service
for computer and consumer related products.

     In March 1999, BuyDirect entered into a merger agreement with 
beyond.com.  This merger will result in our owning approximately
800,000 shares of beyond.com as a result of our ownership interest
in BuyDirect.



<PAGE>


                                SCHEDULE II

                           CNET, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                     YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
                           (Numbers presented in thousands)
<TABLE>
<CAPTION>
                                 Additions
                                -----------------------

                   Balance at   Charged to  Charged to                  Balance
                    Beginning    Costs and     Other      Deductions    at End
                    of Period    Expenses    Accounts      Describe    of Period
                   ------------ ----------- -----------  ------------ -----------
<S>                <C>          <C>         <C>          <C>          <C>
             1998
------------------
Allowance for 
  doubtful accounts     $461      $1,443        $621(3)    $743 (1)     $1,722
                                                            $60 (2)
             1997
------------------
Allowance for 
  doubtful accounts     $100        $578        --         $217 (1)       $461

             1996
------------------
Allowance for 
  doubtful accounts      $25        $75         --            --          $100

</TABLE>

(1) Accounts written off.
(2) Part of sale of Buy Direct, Inc.
(3) Amounts charged to revenu to cover underdelivery of quaranteed impressions.

<PAGE>

S-2  Independent Auditors' Report on Schedule

The Board of Directors
CNET, Inc.

Under date of February 9, 1999, except as to paragraph 5 of footnote 5
and foonote 10, which are as of March 22, 1999, we reported on the
consolidated balance sheets of CNET, Inc., and subsidiaries as of 
December 31, 1998 and 1997, and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of the 
years in the three-year period ended December 31, 1998, as contained
in the annual report on Form 10-K for the year 1998.  In connection 
with our audits of the aforementioned consolidated financial 
statements, we also audited the related consolidated financial 
statements schedule in the annual report on Form 10-K for the year
1998.  This financial statement schedule is the responsibility of
the Company's management.  Our responsibility is to express an 
opinion on this financial statement schedule based on our audits.
audits.

In our opinion, such consolidated financial statement schedule, when 
considered in relation to the basic consolidated financial statements 
taken as a whole presents fairly, in all material respects, the 
information set forth therein.

                                                        KPMG LLP
San Francisco, California
March 22, 1999


<PAGE>



ITEM 9.  CHANGES IN AND DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.


                                  PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


        Incorporated by reference from the Registrant's definitive Proxy 
Statement for its 1999 annual meeting, which will be filed pursuant 
to Regulation 14A (the "1999 Proxy Statement"), under the caption 
"Management."


ITEM 11.  EXECUTIVE COMPENSATION

        Incorporated by reference from the 1999 Proxy Statement, under 
the caption "Executive Compensation and Other Information," but 
specifically excluding the information under the captions "-- 
Performance Graph" and "-- Compensation Committee's Report on 
Executive Compensation."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        Incorporated by reference from the 1999 Proxy Statement under 
the caption "Security Ownership of Certain Beneficial Owners and 
Management."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Incorporated by reference from the 1999 Proxy Statement under 
the caption "Certain Relationships and Related Transactions."


ITEM 14.  EXHIBITS,FINANCIAL STATEMENT SCHEDULES LIST AND REPORTS ON FORM 8-K

(a)   EXHIBITS:

(1) Financial Statements.  The following consolidated financial 
      statements are filed as a part of this report 
      under Item 8, "Financial Statements and Supplementary Data": 

    Consolidated Balance Sheets as of December 31, 1998 and 1997

    Consolidated Statements of Income for the years ended December 31, 
      1998, 1997 and 1996

    Consolidated Statements of Stockholders' Equity for the years 
      ended December 31, 1998, 1997 and 1996

    Consolidated Statements of Cash Flow for the years ended December 
      31, 1998, 1997 and 1996

    Notes to Consolidated Financial Statements

    Independent Auditors' Report of KPMG LLP

(2) Financial Statement Schedules.  The following financial 
      statement schedules are filed as part of this report:

       S-1 Schedule II Valuation and Qualifying Accounts


       S-2  Independent auditors report on schedule


(3) Exhibits.

 3.1(1)       --    Finder.com, Inc. and Virtual Software Library, Inc. into
                    CNET, Inc.
 3.2(2)       --    Certificate of Amendment of Certificate of Incorporation
                    of the Company
 3.3(3)       --    Certificate of Ownership and Merger of Gamecenter.com, 
                    Inc., Finder.com, Inc., Buyer.com, Inc. and Virtual
                    Software Library, Inc. into CNET, Inc.
 3.4(1)       --    Amended and Restated Bylaws of the Company
 4.1(1)       --    Specimen of Common Stock Certificate
10.1(1)       --    CNET, Inc. Amended and Restated Stock Option Plan
10.2(1)       --    Employment Agreement, dated as of October 19, 1994,
                    between the Company and Halsey M. Minor
10.3(3)       --    Employment Agreement, dated as of October 19, 1994,
                    between the Company and Shelby W. Bonnie
10.4(1)       --    Employment Agreement, dated to be effective as
                    of December 1, 1993 and amended as of August 1,
                    1995 and as of April 1, 1996, between the
                    Company and Kevin Wendle
10.5(1)       --    Employment Agreement, dated to be effective as
                    of February 20, 1995 and amended as of September
                    19, 1995, between the Company and Jonathan
                    Rosenberg
10.6(1)       --    Option Exercise Agreement, dated as of April 9,
                    1996, between the Company and Kevin Wendle
10.7(1)       --    Promissory Note of Kevin Wendle, payable to the
                    Company, dated as of April 9, 1996
10.8(1)       --    Lease Agreement, dated as of January 28, 1994,
                    between the Company and Montgomery/North
                    Associates and amended as of January 31, 1995
                    and as of October 19, 1995
10.9(1)       --    Lease, dated as of October 19, 1995, between the
                    Company and The Ronald and Barbara Kaufman
                    Revocable Trust, et al.
10.10(1)      --    Agreement, dated as of February 1, 1995, between the
                    Company to USA Networks.
10.11(1)      --    Warrant to Purchase Common Stock, dated February 9
                    1995, issued by the Company to USA Networks
10.12(1)      --    Series C Converible Preferred Stock Purchase Warrant,
                    dated as of May 25, 1995, issued by the Company to
                    Vulcan Ventures Incorporated
10.13(1)      --    Series D Converible Preferred Stock Purchase Warrant,
                    dated as of January 23, 1996.  issued by the Company to
                    the Bonnie Family Partnership
10.14(1)      --    Operating Agreement of E! Online, LLC, dated as of January 
                    30, 1996, between the Company and E! Entertainment 
                    Television, Inc.
10.15(1)      --    Series D Converible Preferred Stock Purchase Warrant,
                    dated as of February 20, 1996.  issued by the Company to
                    Vulcan Ventures Incorporated
10.16(1)      --    Amended and Restated Agreement , dated as of July 1, 1996,
                    between the Company and USA Networks               
10.17(1)      --    Subscription Agreement, dated as of April 26, 1996,
                    between the Company and the Series E Purchasers  
                    identified therein
10.18(1)      --    1996 Employee Stock Purchase Plan of the Company
10.19(1)      --    Stock Purchase Agreement between Intel Corporation and
                    the Company dated July 1, 1996
10.20(4)      --    Stock Purchase Agreement betweenVignette Corporation and
                    the Company
10.21(5)      --    Letter Agreement, dated February 20, 1997, between the
                    Company and Kevin Wendle.
10.22(2)      --    CNET, Inc. 1997 Stock Option Plan
10.23(6)      --    Stock Purchase Agreement, dated as of June 4, 1997, between
                    Intel Corporation and the Company
10.24(7)      --    Master Agreement, dated as of June 30, 1997, amoung the
                    Company, E! Entertainment Television, Inc. and E! Online,
                    LLC
10.25(8)      --    Security and Loan Agreement between Imperial Bank and the
                    Company, dated July 24, 1997
10.26(8)      --    Note from the Company to Imperial Bank dated July 24, 1997
10.27(8)      --    Loan and Security Agreement between The CIT Group and the
                    Company dated September 5, 1997
10.28(8)      --    Office Lease between One Beach Street, LLC and the Company 
                    dated September 24, 1997
10.29(9)      --    Stock Purchase Agreement, dated as of December 18, 1997,
                    amoung the Company and the Purchasers identified therein
10.30(10)     --    Agreement and Plan of Merger, dated as of May 7, 1998
                    by and among CNET, Inc., and CNET Acquisition Corp., 
                    U. Vision Inc. and the stockholders of U.Vision Inc.
10.31(11)     --    Contribution Agreement, dated as of June 4, 1998,
                    by and among the Company, NBC and Snap! LLC.
10.32(11)     --    Amended and Restated Limited Liability Company
                    Agreement of Snap! LLC, dated as of June 30, by and
                    among the Company and NBC Multimedia, Inc.
10.33(11)     --    Stock Purchase Agreement, dated as of June 4, 1998, 
                    by and between the Company and NBC
10.34(2)      --    Agreement, dated as of July 1, 1998, between USA
                    Networks and the Company
10.35(12)     --    Agreement and Plan of Merger, dated as of February 2,
                    1999, by and among CNET, Inc., NetVentures, Inc. and
                    the stockholders of NetVentures, Inc.
10.36(12)     --    Purchase Agreement, dated as of December 18, 1998,
                    by and among Jenesys LLC and Steve Jenkins
10.37(12)     --    Amendment No. 1 to Purchase Agreement, dated as of 
                    January 22, 1999, by and among CNET, Inc. and Jenesys
                    LLC and Steve Jenkins
10.38(12)     --    Amendment No. 2 to Purchase Agreement, dated as of 
                    February 11, 1999, by and among CNET, Inc. and Jenesys
                    LLC and Steve Jenkins
10.39(12)     --    Agreement and Plan of Merger, dated as of February 19,
                    1999, by and among CNET, Inc., AuctionGate Interactive,
                    Inc. and the stockholders of AuctionGate, Inc.
10.40*        --    Indenture dated March 8, 1999 between the Company
                    and The Bank of New York, as trustee
10.41*        --    Form of 5% Convertible Subordinated Note due 2006
10.42*        --    Registration Agreement dated March 8, 1999 between the
                    Company and Salomon Smith Barney Inc. BancBoston 
                    Robertson Stephens Inc. and Volpe Brown & Company, LLP,
                    as Representatives of the Initial Purchasers
21.1(1)       --    List of Subsidiary Corporations
23.1*         --    Consent of Independent Auditors


*       Filed herewith.

(1)     Incorporated by reference from a previously filed exhibit to 
        the Company's Registration Statement on Form SB-2, registration no. 
        333-4752-LA.

(2)     Incorporated by reference from a previously filed exhibit to 
        the Company's Quarterly Report on Form 10-Q for the quarter
        ended June 30, 1998.

(3)     Incorporated by reference from a previously filed exhibit to 
        the Company's Registration Statement on Form S-8, registration 
        no. 333-34491.

(4)     Incorporated by reference from a previously filed exhibit to the 
        Company's Quarterly Report on Form 10-QSB for the quarter ended
        June 30, 1996.

(5)     Incorporated by reference from an exhibit to the Company's Annual
        Report on Form 10-K for the year ended December 31, 1996.

(6)     Incorporated by reference from a previously filed exhibit to the 
        Company's Quarterly Report on Form 10-QSB for the quarter ended
        June 30, 1997.

(7)     Incorporated by reference from a previously filed exhibit to 
        the Company's Current Report on Form 8-K dated July 11, 1997.

(8)     Incorporated by reference from a previously filed exhibit to the 
        Company's Quarterly Report on Form 10-QSB for the quarter ended
        September  30, 1997.

(9)     Incorporated by reference from a previously filed exhibit to 
        the Company's Annual Report on Form 10-K for the year ended 
        December 31, 1997.

(10)    Incorporated by reference from a previously filed exhibit to 
        the Company's Current Report on Form 8-K filed May 22, 1998.

(11)    Incorporated by reference from a previously filed exhibit to 
        the Company's Current Report on Form 8-K filed July 15, 1998.

(12)    Incorporated by reference from a previously filed exhibit to 
        the Company's Current Report on Form 8-K filed March 1,1999.




(b)  No reports on Form 8-K were filed during the last quarter of the 
period covered by this report.



                                        SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the 
registrant has caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.


                          By   /s/ Halsey M. Minor
                               ----------------------------------
                                Halsey M. Minor
                                Chairman of the Board, President
                                and Chief Executive Officer

                         Date   March 31, 1999
                               ----------------------------------

                         By     /s/  Douglas N. Woodrum
                               ----------------------------------
                                Douglas N. Woodrum
                                Chief Financial Officer

                         Date   March 31, 1999
                               ----------------------------------


In accordance with the Exchange Act, this report has been signed 
below by the following persons on behalf of the registrant and in the 
capacities and on the dates indicated.



                         By     /s/ Halsey M. Minor
                               ----------------------------------
                                Halsey M. Minor
                                Chairman of the Board, President
                                and Chief Executive Officer

                         Date   March 31, 1999
                               ----------------------------------

                         By     /s/  Shelby W. Bonnie
                               ----------------------------------
                                Shelby W. Bonnie
                                Director, Executive Vice President, Chief 
                                Operating Officer and Secretary

                         Date   March 31, 1999
                               ----------------------------------

                         By     /s/  Douglas N. Woodrum
                               ----------------------------------
                                Douglas N. Woodrum
                                Chief Financial Officer

                         Date   March 31, 1999
                               ----------------------------------

                         By      /s/  John C. "Bud" Colligan
                               ----------------------------------
                                John C. "Bud" Colligan
                                Director

                         Date   March 31, 1999
                               ----------------------------------

                         By      /s/  Mitchell Kertzman
                               ----------------------------------
                                Mitchell Kertzman
                                Director

                         Date   March 31, 1999
                               ----------------------------------

                         By      /s/  Eric Robison
                               ----------------------------------
                                Eric Robison
                                Director

                         Date   March 31, 1999
                               ----------------------------------