<PAGE>

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                   FORM 10-QSB


(MARK ONE)

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                                       OR

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

                         COMMISSION FILE NUMBER: 0-20939

                                   CNET, INC.
                 (Name of small business issuer in its charter)

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


                               150 CHESTNUT STREET
                            SAN FRANCISCO, CA  94111
              (Address of principal executive officers) (zip code)

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

Indicate by check mark whether the registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes /X/  No / /

As of July 31, 1997 there were 13,597,745 shares of the registrant's common
stock outstanding.

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<PAGE>

                                      INDEX

                          PART I. FINANCIAL INFORMATION


Item 1.   Condensed Financial Statements
          Condensed Balance Sheets as of June 30, 1997 and
          December 31, 1996. . . . . . . . . . . . . . . . . . . . . . . .    3

          Condensed Statements of Operations for the three and
          six months ended June 30, 1997 and 1996. . . . . . . . . . . . .    4

          Condensed Statements of Cash Flows for the
          six months ended June 30, 1997 and 1996. . . . . . . . . . . . .    5

          Notes to Condensed Financial Statements. . . . . . . . . . . . .    6

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations. . . . . . . . . . . . . . . . . . . . . .    8

          Changes in securities. . . . . . . . . . . . . . . . . . . . . .   13

Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . .   13

                           PART II. OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . .   12
          Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

<PAGE>

                                   CNET, INC.
                            CONDENSED BALANCE SHEETS
                                   (UNAUDITED)


                                                       June 30,     December 31,
                                                         1997          1996
                                                    ------------   ------------

                                     ASSETS

Current assets:
     Cash and cash equivalents . . . . . . . . . .  $  4,996,354  $  20,155,935
     Accounts receivable, net. . . . . . . . . . .     6,919,969      5,292,177
     Other receivable  . . . . . . . . . . . . . .    10,000,000              -
     Other current assets. . . . . . . . . . . . .     1,280,455        940,691
                                                    ------------  -------------
          Total current assets . . . . . . . . . .    23,196,778     26,388,803
Property and equipment, net. . . . . . . . . . . .    15,334,202     11,743,291
Other assets . . . . . . . . . . . . . . . . . . .     4,818,961      1,709,775
                                                    ------------  -------------
                                                    $ 43,349,941  $  39,841,869
                                                    ------------  -------------
                                                    ------------  -------------

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
     Accounts payable. . . . . . . . . . . . . . .  $  3,740,552  $   2,911,663
     Accrued liabilities . . . . . . . . . . . . .     5,807,178      2,973,364
     Current portion of long-term debt . . . . . .       274,087        281,145
                                                    ------------  -------------
          Total current liabilities. . . . . . . .     9,821,817      6,166,172

Long-term debt . . . . . . . . . . . . . . . . . .       440,162        577,543
                                                    ------------  -------------
          Total liabilities. . . . . . . . . . . .    10,261,979      6,743,715

Stockholders' equity:
     Preferred stock . . . . . . . . . . . . . . .             -              -
     Common stock. . . . . . . . . . . . . . . . .         1,357          1,328
     Additional paid in capital. . . . . . . . . .    70,286,925     62,424,993
     Accumulated deficit . . . . . . . . . . . . .   (37,200,320)   (29,328,167)
                                                    ------------  -------------
          Total stockholders' equity . . . . . . .    33,087,962     33,098,154
                                                    ------------  -------------
                                                    $ 43,349,941  $  39,841,869
                                                    ------------  -------------
                                                    ------------  -------------

                 See accompanying notes to financial statements.

<PAGE>

                                   CNET, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                            Three Months Ended            Six Months Ended
                                                                  June 30,                     June 30,
                                                         -------------------------    ---------------------------
                                                            1997           1996           1997            1996
                                                         -----------    ----------    -------------   -----------


<S>                                                      <C>           <C>             <C>             <C>
Revenues:
   Television. . . . . . . . . . . . . . . . . . . . .   $1,695,207    $   819,998     $ 3,475,002     $ 1,427,695
   Internet. . . . . . . . . . . . . . . . . . . . . .    6,618,816      1,810,231      11,157,165       2,855,376
                                                         ----------    -----------     -----------     -----------
      Total Revenues . . . . . . . . . . . . . . . . .    8,314,023      2,630,229      14,632,167       4,283,071

Cost of revenues:
   Television. . . . . . . . . . . . . . . . . . . . .    1,694,008      1,340,718       3,467,710       2,695,196
   Internet. . . . . . . . . . . . . . . . . . . . . .    3,885,918      1,920,372       7,590,429       3,363,099
                                                         ----------    -----------     -----------     -----------
      Total cost of revenues . . . . . . . . . . . . .    5,579,926      3,261,090      11,058,139       6,058,295
                                                         ----------    -----------     -----------     -----------
Gross profit (deficit) . . . . . . . . . . . . . . . .    2,734,097       (630,861)      3,574,028     ( 1,775,224)

Operating expenses:
   Sales and marketing . . . . . . . . . . . . . . . .    2,661,133      1,809,645       5,014,401       3,115,911
   Development . . . . . . . . . . . . . . . . . . . .    3,674,224        643,634       6,207,622       1,133,547
   General and administrative. . . . . . . . . . . . .    1,459,833        822,195       2,804,380       1,470,506
   Warrant compensation expense. . . . . . . . . . . .         -              -          7,000,000            -   
                                                         ----------    -----------     -----------     -----------
      Total operating expenses . . . . . . . . . . . .    7,795,190      3,275,474      21,026,403       5,719,964
                                                         ----------    -----------     -----------     -----------

Operating loss . . . . . . . . . . . . . . . . . . . .   (5,061,093)    (3,906,335)    (17,452,375)     (7,495,188)

Other income (expense):
   Gain (loss) on joint venture. . . . . . . . . . . .    9,963,760       (258,978)      9,214,806        (275,397)
   Other income (expense). . . . . . . . . . . . . . .      113,383       (155,164)        365,416        (248,415)
                                                         ----------    ------------    -----------     ------------
   Total other income (expense). . . . . . . . . . . .   10,077,143       (414,142)      9,580,222        (523,812)
                                                         ----------    ------------    -----------     ------------
   Net income (loss) . . . . . . . . . . . . . . . . .   $5,016,050    $(4,320,477)    $(7,872,153)    $(8,019,000)
                                                         ----------    ------------    ------------    ------------
                                                         ----------    ------------    ------------    ------------

Net income (loss) per share. . . . . . . . . . . . . .   $     0.34    $     (0.47)    $     (0.59)    $     (0.87)
                                                         ----------    ------------    ------------    ------------
                                                         ----------    ------------    ------------    ------------

Shares used in calculating per share data. . . . . . .   14,947,215      9,216,045      13,368,429       9,216,045
                                                         ----------    -----------     -----------     ------------
                                                         ----------    -----------     -----------     ------------
</TABLE>


                 See accompanying notes to financial statements.

<PAGE>
                                   CNET, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                             June 30,
                                                                    ----------------------------
                                                                         1997           1996
                                                                    -------------   ------------
<S>                                                               <C>             <C>
Cash flows from operating activities:
   Net loss  . . . . . . . . . . . . . . . . . . . . . . . . . .  $  (7,872,153)  $  (8,019,000)
   Adjustments to reconcile net loss to net cash used
      in operating activities:
      Depreciation and amortization. . . . . . . . . . . . . . .      2,146,418         592,588
      Amortization of program costs. . . . . . . . . . . . . . .      3,639,729       1,287,854
      Interest expense converted into preferred stock. . . . . .              -         222,141
      Allowance for doubtful accounts. . . . . . . . . . . . . .        156,338          25,000
      Reserve for joint venture. . . . . . . . . . . . . . . . .     (1,665,299)        275,397
      Changes in operating assets and liabilities:
         Accounts receivable . . . . . . . . . . . . . . . . . .    (11,784,130)     (1,136,581)
         Other current assets. . . . . . . . . . . . . . . . . .       (589,706)       (301,096)
         Other assets. . . . . . . . . . . . . . . . . . . . . .       (113,663)       (520,090)
         Accounts payable. . . . . . . . . . . . . . . . . . . .        828,889       2,254,806
         Accrued liabilities . . . . . . . . . . . . . . . . . .      1,063,780         727,552
         Deferred revenue. . . . . . . . . . . . . . . . . . . .      1,770,031               -
         Warrant Compensation Expense. . . . . . . . . . . . . .      7,000,000               -
                                                                  -------------   -------------
            Net cash used in operating activities. . . . . . . .     (5,419,766)     (4,591,429)
                                                                  -------------   -------------
Cash flows from investing activities:
   Purchases of equipment, excluding capital leases. . . . . . .     (5,611,911)     (2,534,562)
   Purchases of programming assets . . . . . . . . . . . . . . .     (3,389,746)     (1,775,427)
   Loan to joint venture . . . . . . . . . . . . . . . . . . . .     (1,455,643)       (260,830)
                                                                  -------------   -------------
            Net cash used in investing activities. . . . . . . .    (10,457,300)     (4,570,819)
                                                                  -------------   -------------
Cash flows from financing activities:
   Net proceeds from issuance of convertible preferred stock . .              -       4,643,826
   Allocated proceeds from issuance of warrants. . . . . . . . .              -         164,000
   Proceeds from debt. . . . . . . . . . . . . . . . . . . . . .              -       3,636,000
   Net proceeds from employee stock purchase plan. . . . . . . .        334,184               -
   Net proceeds from exercise of options . . . . . . . . . . . .        527,743               -
   Principal payments on capital leases. . . . . . . . . . . . .        (79,090)              -
   Principal payments on equipment note. . . . . . . . . . . . .        (65,352)        (73,812)
                                                                  -------------   -------------
         Net cash provided by financing activities . . . . . . .        717,485       8,370,014
                                                                  -------------   -------------
Net decrease in cash and cash equivalents. . . . . . . . . . . .    (15,159,581)       (792,234)
Cash and cash equivalents at beginning of period . . . . . . . .     20,155,935         703,083
                                                                  -------------   -------------
Cash and cash equivalents at end of period . . . . . . . . . . .  $   4,996,354   $     (89,151)
                                                                  -------------   -------------
                                                                  -------------   -------------
Supplemental disclosure of cash flow information:
   Interest paid . . . . . . . . . . . . . . . . . . . . . . . .  $      46,283   $      42,338
                                                                  -------------   -------------
                                                                  -------------   -------------
Supplemental disclosure of noncash transactions:
  Capital Lease obligations incurred . . . . . . . . . . . . . .  $           -   $     270,203
                                                                  -------------   -------------
                                                                  -------------   -------------
  Conversion of debt and interest into convertible
  preferred stock. . . . . . . . . . . . . . . . . . . . . . . .  $           -   $   3,858,141
                                                                  -------------   -------------
                                                                  -------------   -------------

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

</TABLE>

                 See accompanying notes to financial statements

<PAGE>

                                   CNET, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (UNAUDITED)



(1) BASIS OF PRESENTATION

     In the opinion of management, the accompanying unaudited condensed 
financial statements reflect all adjustments, consisting only of normal 
recurring adjustments, considered necessary for a fair presentation of the 
financial condition, results of operations and cash flows for the periods 
presented.  These condensed financial statements should be read in 
conjunction with the audited financial statements included in the Company's 
10-KSB, as filed with the Securities and Exchange Commission which contains 
additional financial and operating information and information concerning the 
significant accounting policies followed by the Company.

     The results of operations for the three and six months ended June 30, 
1997 are not necessarily indicative of the results to be expected for the 
current year or any other period.

NET INCOME (LOSS) PER SHARE

     Net income (loss) per share is computed based on the weighted average 
number of shares of common stock outstanding and common equivalent shares 
from stock options and warrants (under the treasury stock method, if 
dilutive).  In accordance with certain SEC Staff Accounting Bulletins, such 
computations include all common equivalent shares (using the treasury stock 
method) issued subsequent to May 10, 1995 as if they were outstanding for all 
periods presented using the IPO price.  Common equivalent shares issued prior 
to May 10, 1995 are excluded from the computation if their effect is 
anti-dilutive.  Furthermore, common equivalent shares from convertible 
preferred stock that automatically or voluntarily converted upon the 
completion of the Company's IPO are included in the calculation using the 
as-converted method from the original date of issuance.

     The Financial Accounting Standards Board recently issued Statement of 
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." SFAS 
No. 128 requires the presentation of basic earnings per share ("EPS") and, 
for companies with complex capital structures, diluted EPS. SFAS No. 128 is 
effective for annual and interim periods ending after December 15, 1997.  The 
Company expects that for profitable periods, basic EPS will be higher than 
primary earnings per share as presented in the accompanying consolidated 
financial statements and diluted EPS will not differ materially from earnings 
per share as presented in the accompanying financial statements.  
Computations for loss periods should not change significantly.

     The Financial Accounting Standards Board has also issued SFAS No. 129, 
"Disclosure of Information about Capital Structure," SFAS No. 130, "Reporting 
Comprehensive Income," and SFAS No. 131, "Disclosure about Segments of an 
Enterprise and Related Information."  These new accounting standards are for 
disclosure purposes and the Company is analyzing the impact of these 
standards for future reporting.

(2) BALANCE SHEET

PROPERTY AND EQUIPMENT

     A summary of property and equipment follows:

<PAGE>

                                                     JUNE 30,    DECEMBER 31,
                                                       1997         1996
                                                       ----         ----

 Computer Equipment. . . . . . . . . . . . . . . .  $9,601,298   $6,389,144
 Production Equipment. . . . . . . . . . . . . . .   2,096,381    2,017,546
 Office Equipment. . . . . . . . . . . . . . . . .   1,146,442    1,349,978
 Leasehold improvements. . . . . . . . . . . . . .   5,346,596    4,128,625
 Furniture & Fixtures. . . . . . . . . . . . . . .     514,779      156,861
 Other . . . . . . . . . . . . . . . . . . . . . .     998,739       50,169
                                                   -----------  -----------
                                                    19,704,235   14,092,323
 Less accumulated depreciation and amortization. .   4,370,033    2,349,032
                                                   -----------  -----------
                                                   $15,334,202  $11,743,291
                                                   -----------  -----------

ACCRUED LIABILITIES

      A summary of accrued liabilities follows:

                                                     JUNE 30,    DECEMBER 31,
                                                       1997         1996
                                                       ----         ----

 Compensation and related benefits . . . . . . . .  $1,904,701   $1,298,700
 Advertising . . . . . . . . . . . . . . . . . . .   1,323,373      734,934
 Deferred Revenue. . . . . . . . . . . . . . . . .   1,400,000            -
 Other . . . . . . . . . . . . . . . . . . . . . .   1,179,104      939,730
                                                    ----------   ----------
                                                    $5,807,178   $2,973,364
                                                    ----------   ----------

(3) GAIN (LOSS) ON JOINT VENTURE

     Gain (loss) on joint venture is derived from the Company's joint venture 
with E! Entertainment. The joint venture, which was owned 50% by the Company 
and 50% by E! Entertainment, was formed in January 1996 to launch an Internet 
site called E! ONLINE. The Company provided approximately $3.0 million in 
debt financing to the joint venture through June 30, 1997, which was the 
venture's sole source of financing. As a result of the Company's financing 
commitment to the joint venture, the Company recognized 100% of any losses 
incurred by the joint venture. 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 (which amount was 
subsequently received by the Company on July 11, 1997), a $3.2 million note 
receivable, which is included in other assets, and certain additional 
payments for up to three years.

(4) SUBSEQUENT EVENT

     On June 5, 1997, the Company agreed to sell Intel Corporation 201,253 
shares of common stock at a per share price of $26.34.  The transaction was 
completed and proceeds from the sale of $5.3 million were received by the 
Company on July 21, 1997.  The sale increased Intel's ownership position in 
the Company to 6.0 percent.

<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
          FINANCIAL CONDITION

     The Company was founded in December 1992 and first recognized revenues 
from its television operations in April 1995 and from its Internet operations 
in October 1995.  Accordingly, the Company has an extremely limited operating 
history upon which an evaluation of the Company and its prospects can be 
based. The Company's prospects must be considered in light of the risks, 
expenses and difficulties frequently encountered by start-up companies in the 
television programming industry and in the new and rapidly evolving market of 
Internet products, content and services.  To address these risks, the Company 
must, among other things, effectively develop new relationships and maintain 
existing relationships with its advertising customers, their advertising 
agencies and other third parties, provide original and compelling content to 
Internet users and television viewers, develop and upgrade its technology, 
respond to competitive developments and attract, retain and motivate 
qualified personnel. There can be no assurance that the Company will succeed 
in addressing such risks and the failure to do so could have a material 
adverse effect on the Company's business, financial condition or operating 
results.  Additionally, the limited history of the Company makes the 
prediction of the future operating results difficult or impossible, and there 
can be no assurance that the Company's revenues will increase or even 
continue at their current level or that the Company will achieve or maintain 
profitability or generate cash from operations in future periods.  Since 
inception, the Company has incurred significant losses and, as of June 30, 
1997, had an accumulated deficit of $37.2 million.  The Company expects to 
continue to incur significant losses on a quarterly and annual basis in the 
future.

RESULTS OF OPERATIONS

     REVENUES

     TOTAL REVENUES

     Total revenues were $8.3 million and $2.6 million for the three months 
and $14.6 million and $4.3 million for the six months ended June 30, 1997 and 
1996, respectively.

     TELEVISION REVENUES

     Television revenues were $1.7 million and $820,000 for the three months 
and $3.5 million and $1.4 million for the six months ended June 30, 1997 and 
1996, respectively.  The increase of $875,000 for the three month and $2.0 
million for the six month period was due to the launch of three new 
television series during the second half of 1996.  Through June 30, 1996 
television revenues were principally derived from the sale of advertising 
during the Company's CNET CENTRAL television series, which was carried 
nationally on USA Network and Sci-Fi Channel pursuant to an agreement with 
USA Networks.  In April 1996, the Company and USA Networks amended their 
agreement, effective July 1, 1996.  Under the amended agreement, USA Networks 
licensed the right to carry CNET CENTRAL and two additional programs 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 Network excercised an option to extend its agreement with the 
Company to carry the Company's three television programs through June 30, 
1998 for a fee equal to the cost of production of the program up to a maximum 
of $5.5 million. Fees derived under the agreement will vary on a quarterly 
basis depending on the delivery of original or refreshed programming.

     In addition to the two additional programs carried on USA Networks, the 
Company entered into an agreement in August 1996 with Golden Gate 
Productions, L.P. ("GGP") whereby the Company produces the syndicated 
television series TV.COM, which is exclusively distributed by GGP.  The 
program commenced distribution in September 1996. In August 1997 the assets 
of GGP were acquired by a third party. The Company cannot predict the effect 
of the transaction on the distribution of TV.COM, or on the advertising sales 
for TV.COM.

<PAGE>

INTERNET REVENUES

     Internet revenues were $6.6 million and $1.8 million for the three 
months and $11.2 million and $2.9 million for the six months ended June 30, 
1997 and 1996, respectively.  The increase in Internet revenues of $4.8 
million for the three months and $8.3 million for the six months was 
primarily the result of additional delivery of advertising attributable to 
the increase in Internet sites produced by the Company from three on June 30, 
1996 to nine on June 30, 1997 as well as increased traffic and delivery of 
advertising on the three Internet sites existing on June 30, 1996.  The 
number of banner advertising units delivered on all sites grew 196% to 420 
for the three month period and 212% to 690 for the six month period ended 
June 30, 1997 as compared to the comparable periods in 1996.  In addition, 
Internet revenues include non-advertising revenues of $1.1 million for the 
three months and $1.7 million for the six months ended June 30, 1997. 
Non-advertising revenues include electronic commerce revenue, content 
licensing revenue and technology sales and licensing. The Company first 
realized non-advertising revenue in the third quarter of 1996.

     A portion of the Company's Internet revenues were derived from barter 
transactions whereby the Company delivered advertisements on its Internet 
sites in exchange for advertisements on the Internet sites of other 
companies.  Barter transactions accounted for $472,000 and $216,000 for the 
three months ended and $496,000 and $340,000 for the six months ended June 
30, 1997 and 1996, respectively.

COST OF REVENUES

TOTAL COST OF REVENUES

     Total cost of revenues were $5.6 million and $3.3 million for the three 
months and $11.1 million and $6.1 million for the six months ended June 30, 
1997 and 1996, respectively.  Cost of revenues includes costs associated  
with the production and delivery of the Company's television programming and 
the production of its Internet sites.  The principal elements of cost of 
revenues for the Company's television programming have been the production 
costs of its television programs, which primarily consist of payroll and 
related expenses for the editorial and production staff and costs for 
facilities and equipment.  The principal elements of cost of revenues for the 
Company's Internet sites 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 television revenues were $1.7  million and $1.3 million for the 
three months and $3.5 million and $2.7 million for the six months ended June 
30, 1997 and 1996, representing 100%, 164%, 100% and 189% of the related 
revenues, respectively.  The increase of $353,000 for the three month period 
and $773,000 for the six month period ended June 30, 1997 as compared to the 
same periods in 1996 was primarily due to costs incurred from the production 
of two additional programs under the Company's amended contract with USA 
Networks and to additional costs incurred for the production of TV.COM.

     Under the Company's agreement with GGP, any revenues from the 
distribution of TV.COM will be first used to offset costs of distribution and 
production and thereafter be shared equally by CNET and GGP. There can be no 
assurance that distribution revenue will be sufficient to cover these costs.

COST OF INTERNET REVENUES

     Cost of Internet revenues were $3.9 million and $1.9 million for the 
three months and $7.6 million and $3.4 million for the six months ended June 
30, 1997 and 1996, representing 59%, 106%, 68% and 118% of the 

<PAGE>

related revenues, respectively.  The increase of $2.0 million for the three 
months and $4.2 million for the six months ended June 30, 1997 as compared to 
the same periods in 1996 is primarily attributable to the increase in Internet 
sites produced by the Company from three on June 30, 1996 to nine on June 30, 
1997.  The increase in Internet sites produced by the Company required 
significant additional expenditures in payroll and related expenses, and for 
facilities and equipment.  The Company anticipates substantial increases in 
cost of revenues for Internet production in the future.

SALES AND MARKETING

     Sales and marketing expenses consist primarily of payroll and related 
expenses, consulting fees and advertising expenses.  Sales and marketing 
expenses were $2.7 million and $1.8 million for the three months and $5.0 
million and $3.1 million for the six months ended June 30, 1997 and 1996, 
representing 32%, 69%, 34% and 73% of total revenues, respectively.  The 
increase in sales and marketing expenses for the three and six months ended 
June 30, 1997 of $851,000 and $1.9 million compared to the same periods in 
1996 was primarily attributable to increases in payroll and related benefits 
and additional expenses of $318,000 and $626,000 related to the Company's 
SNAP! Online project.

DEVELOPMENT

     Development expenses consist of expenses incurred in the development of 
new Internet sites and in research and development of new or improved 
technologies designed to enhance the performance of the Company's Internet 
sites.  Development expenses for Internet operations include 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 site are no longer recognized as development expenses when the 
new site begins generating revenue.  Development expenses were $3.7 million 
and $644,000 for the three months and $6.2 million and $1.1 million for the 
six months ended June 30, 1997 and 1996, representing 44%, 24%, 42% and 26% 
of total revenues, respectively. The increase in development expenses of $3.0 
million for the three months and $5.1 million for the six months ended June 
30, 1997 as compared to the same periods in 1996 was primarily attributable 
to $2.7 million and $4.6 million in development expenses related to SNAP! 
Online. SNAP! Online is a free consumer online service built on the open 
standards of the Internet. The Company anticipates a continued increase in 
development expenses in the future.

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 $1.5 million and $822,000 for the three months and $2.8 million 
and $1.5 million for the six months ended June 30, 1997 and 1996, 
representing 18%, 31%, 19% and 34% of total revenues, respectively.  The 
increase for the three months and six months ended June 30, 1997 as compared 
to the same periods in 1996 were primarily attributable to increases in 
payroll and related expenses and are primarily associated with the growth 
of the Company.

WARRANT COMPENSATION EXPENSE

     In January 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 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 the Company's three television 
programs through June 30, 1998.

<PAGE>

OTHER INCOME (EXPENSE)

     Other income (expense) consists of interest income and interest expense 
and gains (losses) from the Company's joint venture with E! Entertainment.  
The joint venture, which was owned 50% by the Company and 50% by E! 
Entertainment, was formed in January 1996 to launch an Internet site called 
E! ONLINE.  The Company provided approximately $3.0 million in debt financing 
to the joint venture through June 30, 1997, which was the venture's sole 
source of financing.  As a result of the Company's financing commitment to 
the joint venture, the Company recognized 100% of any losses incurred by the 
joint venture.  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 a $10.0 million, (which amount was subsequently 
received by the Company on July 11, 1997), a $3.2 million note receivable, 
which is included in other assets, and certain additional payments for up to 
three years.

     Total other income (expense) was $10.1 million and $(414,000) for the 
three months and $9.6 million and $(524,000) for the six months ended June 
30, 1997 and 1996, respectively.  Included in other income (expense) were 
gains of $10.0 million and $9.2 million for the three month and six month 
periods ended June 30, 1997 primarily related to the sale of the Company's 
equity interest in the joint venture as compared to losses of $(259,000) and 
$(275,000) for the comparable periods in 1996 primarily related to the 
recognition of 100% of the losses by the joint venture.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities of $5.4 million and $4.6 million 
for the six months ended June 30, 1997 and 1996, respectively, was primarily 
attributable to net losses in such periods.  Net cash used in investing 
activities of $10.5 million and $4.6 million for the six months ended June 
30, 1997 and 1996 respectively, was primarily attributable to purchases of 
equipment and programming assets.  Cash flows provided by financing 
activities for the six months ended June 30, 1997 consisted primarily of 
proceeds from the issuance of common stock and for the six months ended June 
30, 1996 consisted primarily of proceeds from the issuance of preferred stock 
and the issuance debt.

     The Company currently has obligations under notes payable and capital 
leases of $714,000.  Such obligations were incurred to finance equipment 
purchases and are payable through June 2001.

     As of June 30, 1997, the Company's principal source of liquidity was 
approximately $5.0 million in cash and cash equivalents.  In July 1997, the 
Company had proceeds of approximately $15.3 million, consisting of payment of 
the $10.0 million from E! Entertainment and proceeds of $5.3 million for the 
sale of common stock to Intel Corporation.  (See "Other Income (Expense)" and 
"Notes to Condensed Financial Statements-Subsequent Event")  The Company 
believes that these funds, together with other sources of capital expected to 
be available to the Company, will be sufficient to meet its anticipated cash 
needs for working capital and capital expenditures for at least the next 12 
months.  However, any projections of future cash needs and cash flows is 
subject to substantial uncertainty.  See "Additional Factors That May Affect 
Future Results" below.  If currently available cash and cash generated by 
operations is insufficient to satisfy the Company's liquidity requirements, 
the Company 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 the Company's stockholders.  There can be no assurance 
that financing will be available to the Company in amounts or on terms 
acceptable to the Company.

<PAGE>

SEASONALITY AND CYCLICALITY

     The Company believes 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 the Company's business, financial condition or operating results.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

     The Company's financial condition and quarterly operating results may 
fluctuate significantly in the future as a result of a variety of factors, 
many of which are outside the Company's control.  Factors that may adversely 
affect the Company's quarterly operating results attributable to its Internet 
operations include the level of use of the Internet, demand for Internet 
advertising, seasonal trends in both Internet use and advertising placements, 
the addition or loss of advertisers, advertising budgeting cycles of 
individual advertisers, the level of traffic on the Company's Internet sites, 
the amount and timing of development costs, capital expenditures and other 
costs relating to the expansion of the Company's Internet operations, the 
introduction of new sites and services by the Company or its competitors, 
price competition or pricing changes in the industry, technical difficulties 
or system downtime, general economic conditions and economic conditions 
specific to the Internet and Internet media.  Quarterly operating results 
attributable to the Company's television operations are generally dependent 
on the costs incurred by the Company in producing its television programming. 
Further, the size and demographic characteristics of the Company's viewing 
audience may be adversely affected by the popularity of competing television 
programs, including special events, the time slots chosen for the Company's 
programs by the cable network carrying such programs and the popularity of 
programs immediately preceding the Company's programs.  As a result of the 
Company's strategy to cross market its television and Internet operations, 
the Company believes that any decrease in the number of viewers of its 
television programs will have a negative effect on the usage of its Internet 
sites.  Accordingly, a decrease in viewership of the Company's television 
programs could have a material adverse effect on the Company's business, 
financial condition or operating results.

     Due to all of the foregoing factors, it is likely that the Company's 
operating results will fall below the expectations of the Company, securities 
analysts or investors in some future quarter.  In such event, the trading 
price of the Common Stock would likely be materially and adversely affected.

     Certain information in this Quarterly Report may contain 
"forward-looking statements" within the meaning of Section 21E of the 
Securities Exchange Act of 1934, as amended.  All statements other than 
statements of historical fact are "forward-looking statements" for purposes 
of these provisions, including any projections of earnings, revenues, 
expenses or other financial items, any statements of the plans and objectives 
of management for future operations, any statements concerning proposed new 
services, any statements regarding future economic conditions or performance, 
and any statement of assumptions underlying any of the foregoing.  Although 
the Company believes that the expectations reflected in its forward-looking 
statements are reasonable, it can give no assurance that such expectations or 
any of its forward-looking statements will prove to be correct, and actual 
results could differ materially from those projected or assumed in the 
Company's forward-looking statements.  The Company's future financial 
condition and results, as well as any forward-looking statements, are subject 
to inherent risks and uncertainties, including those summarized in this 
section.  Additional information concerning these and other risk factors is 
contained in the Company's Annual Report on Form 10-KSB for the fiscal year 
ended December 31, 1996, a copy of which may be obtained from the Company 
upon request.

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

          (c) On June 4, 1997, the Company entered into an agreement with 
Intel Corporation ("Intel"), pursuant to which Intel agreed to purchase 
201,253 shares of the Company's common stock for an aggregate purchase price 
of $5,300,000. The transaction was completed and proceeds from the sale were 
received by the Company on July 21, 1997. As a result of this transaction, 
Intel's ownership position in the Company increased to 6.0 percent. The sale 
of common stock to Intel in this transaction was exempt from the registration 
requirements of the Securities Act of 1933 pursuant to Section 4(2) thereof.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its annual meeting on May 22, 1997, and the following 
matters were submitted to the Company's stockholders for approval: (i) the 
election of three Class I directors for a three year term; (ii) the adoption 
of the CNET, Inc. 1997 Stock Option Plan (the "1997 Plan"); and (iii) the 
ratification of KPMG Peat Marwick LLP as the Company's independent auditors 
for fiscal 1997. At the meeting, the three nominees for director were 
elected, the 1997 Plan was adopted and the selection of independent auditors 
was ratified. The vote of the stockholders with respect to each such matter 
was as follows:

Election of Class I Directors:

     Shelby W. Bonnie     7,920,631 votes for; 24,300 votes withheld
     Douglas Hamilton     7,920,631 votes for; 24,300 votes withheld
     Eric Robison         7,920,631 votes for; 24,300 votes withheld

Adoption of 1997 Plan     6,892,148 votes for
                          364,592 votes against
                          12,506 abstentions
                          675,685 broker non-votes

Ratification of Auditors  7,938,384 votes for
                          1,675 votes against
                          4,872 abstentions

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          (1)  Exhibits

10.1  Stock Purchase Agreement, dated as of June 4, 1997, between Intel 
      Corporation and CNET, Inc.

11.1  Statement of Computation of Net Income (Loss) per Share
27.   Financial Data Schedule

          (2)  Reports on Form 8-K

                           None.

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                        CNET, INC.
                                        (Registrant)

                                        /s/ SHELBY W. BONNIE
                                        ____________________
                                        Shelby W. Bonnie
                                        CHIEF OPERATING OFFICER/
                                        CHIEF FINANCIAL OFFICER

August 14, 1997

Date