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

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

                                   FORM 10-QSB


(MARK ONE)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 October 31, 1997 there were 13,943,993 shares of the registrant's common
stock outstanding.

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

<PAGE>
Part 1.  Financial Information
Item 1.   Financial Statements

                                   CNET, INC.
                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                   September 30,  December 31,
                                                       1997           1996
                                                   -------------  -------------
<S>                                                <C>            <C>
                              ASSETS
Current assets:
     Cash and cash equivalents . . . . . . . . .    $13,119,208    $20,155,935
     Accounts receivable, net. . . . . . . . . .      8,011,757      5,292,177
     Other current assets. . . . . . . . . . . .      1,780,103        940,691
                                                   -------------  -------------
          Total current assets . . . . . . . . .     22,911,068     26,388,803

Property and equipment, net. . . . . . . . . . .     17,276,398     11,743,291
Other assets . . . . . . . . . . . . . . . . . .      5,142,470      1,709,775
                                                   -------------  -------------
                                                    $45,329,936    $39,841,869
                                                   =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
     Accounts payable. . . . . . . . . . . . . .     $2,430,533     $2,911,663
     Accrued liabilities . . . . . . . . . . . .      6,184,185      2,973,364
     Current portion of long-term debt . . . . .      1,164,350        281,145
                                                   -------------  -------------
          Total current liabilities. . . . . . .      9,779,068      6,166,172

Long-term debt . . . . . . . . . . . . . . . . .      2,927,814        577,543
                                                   -------------  -------------
          Total liabilities. . . . . . . . . . .     12,706,882      6,743,715

Stockholders' equity:
     Common stock. . . . . . . . . . . . . . . .          1,384          1,328
     Additional paid in capital. . . . . . . . .     75,974,225     62,424,993
     Accumulated deficit . . . . . . . . . . . .    (43,352,555)   (29,328,167)
                                                   -------------  -------------
          Total stockholders' equity . . . . . .     32,623,054     33,098,154
                                                   -------------  -------------
                                                    $45,329,936    $39,841,869
                                                   =============  =============
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>





                                   CNET, INC.
                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                            Three Months Ended           Nine Months Ended
                                              September 30,              September 30,
                                         -------------------------  ---------------------------
                                            1997         1996          1997          1996
                                         ------------ ------------  ------------- -------------
<S>                                      <C>          <C>           <C>           <C>
Revenues:
   Television. . . . . . . . . . . . . .  $1,813,052   $1,653,900     $5,288,054    $3,081,594
   Internet. . . . . . . . . . . . . . .   6,859,139    2,863,683     18,016,304     5,719,058
                                         ------------ ------------  ------------- -------------
      Total Revenues . . . . . . . . . .   8,672,191    4,517,583     23,304,358     8,800,652

Cost of revenues:
   Television. . . . . . . . . . . . . .   1,806,913    1,756,541      5,274,623     4,451,737
   Internet. . . . . . . . . . . . . . .   4,112,616    2,589,313     11,703,045     5,952,411
                                         ------------ ------------  ------------- -------------
      Total cost of revenues . . . . . .   5,919,529    4,345,854     16,977,668    10,404,148
                                         ------------ ------------  ------------- -------------
Gross profit (deficit) . . . . . . . . .   2,752,662      171,729      6,326,690    (1,603,496)

Operating expenses:
   Sales and marketing . . . . . . . . .   2,791,085    2,632,961      7,805,486     5,748,872
   Development . . . . . . . . . . . . .   4,735,718      915,481     10,943,340     2,049,029
   General and administrative. . . . . .   1,525,986    1,048,284      4,330,366     2,518,790
   Warrant compensation expense. . . . .       -             -         7,000,000          -
                                         ------------ ------------  ------------- -------------
      Total operating expenses . . . . .   9,052,789    4,596,726     30,079,192    10,316,691
                                         ------------ ------------  ------------- -------------
Operating loss . . . . . . . . . . . . .  (6,300,127)  (4,424,997)   (23,752,502)  (11,920,187)

Other income (expense):
   Gain (loss) on joint venture. . . . .       -         (678,779)     9,214,806      (954,177)
   Other income (expense). . . . . . . .     147,892      424,603        513,308       176,189
                                         ------------ ------------  ------------- -------------
   Total other income (expense). . . . .     147,892     (254,176)     9,728,114      (777,988)
                                         ------------ ------------  ------------- -------------
   Net loss . . . . . . . . . . . . . . .($6,152,235) ($4,679,173)  ($14,024,388) ($12,698,175)
                                         ============ ============  ============= =============

Net loss per share. . . . . . . . . . . .     ($0.45)      ($0.35)        ($1.04)       ($1.20)
                                         ============ ============  ============= =============

Shares used in calculating
   per share data. . . . . . . . . . . .  13,764,487   13,216,737     13,479,021    10,544,742
                                         ============ ============  ============= =============

</TABLE>
                 See accompanying notes to financial statements.

<PAGE>

                                   CNET, INC.
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                               September 30,
                                                      ---------------------------
                                                         1997          1996
                                                      ------------- -------------
<S>                                                   <C>           <C>
Cash flows from operating activities:
   Net loss . . . . . . . . . . . . . . . . . . . . . ($14,024,388) ($12,698,175)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization. . . . . . . . . .    3,467,006     1,136,556
     Amortization of program costs. . . . . . . . . .    5,548,481     3,201,017
     Interest expense converted into preferred stock.           -        222,141
     Allowance for doubtful accounts. . . . . . . . .      202,092        25,000
     Reserve for joint venture. . . . . . . . . . . .   (1,665,299)      954,177
     Warrant compensation expense. . . . . . . . .       7,000,000            -
     Changes in operating assets and liabilities:
        Accounts receivable . . . . . . . . . . . . .   (3,222,165)   (1,931,353)
        Other current assets. . . . . . . . . . . . .     (879,314)      (72,824)
        Other assets. . . . . . . . . . . . . . . . .     (419,922)     (843,419)
        Accounts payable. . . . . . . . . . . . . . .     (481,131)    3,131,039
        Accrued liabilities . . . . . . . . . . . . .    1,731,874     2,328,273
        Deferred revenue. . . . . . . . . . . . . . .    1,478,919            -
                                                      ------------- -------------
           Net cash used in operating activities. . .   (1,263,847)   (4,547,568)
                                                      ------------- -------------
Cash flows from investing activities:
  Purchases of equipment, excluding capital leases. .   (8,621,329)   (6,378,151)
  Purchases of programming assets . . . . . . . . . .   (5,208,049)   (3,913,779)
  Investment in Vignette Corporation  . . . . . . . .           -       (511,500)
  Loan to joint venture . . . . . . . . . . . . . . .   (1,531,945)   (1,031,690)
                                                      ------------- -------------
           Net cash used in investing activities. . .  (15,361,323)  (11,835,120)
                                                      ------------- -------------
Cash flows from financing activities:
  Net proceeds from issuance of convertible
    preferred stock . . . . . . . . . . . . . . . . .           -      4,643,826
  Net proceeds from initial public offering . . . . .           -     37,938,000
  Proceeds from stockholder receivable  . . . . . . .           -        594,654
  Allocated proceeds from issuance of warrants. . . .           -        164,000
  Net proceeds from issuance of stock . . . . . . . .    5,250,000            -
  Proceeds from debt. . . . . . . . . . . . . . . . .    3,280,806     3,636,000
  Net proceeds from employee stock purchase plan. . .      525,837            -
  Net proceeds from exercise of options . . . . . . .      773,450            -
  Principal payments on capital leases. . . . . . . .     (144,320)           -
  Principal payments on equipment note. . . . . . . .      (97,330)     (132,629)
                                                      ------------- -------------
           Net cash provided by financing activities.    9,588,443    46,843,851
                                                      ------------- -------------
Net increase (decrease) in cash and cash equivalents.   (7,036,727)   30,461,163
Cash and cash equivalents at beginning of period  . .   20,155,935       703,083
                                                      ------------- -------------
Cash and cash equivalents at end of period  . . . . .  $13,119,208   $31,164,246
                                                      ============= =============
Supplemental disclosure of cash flow information:
  Interest paid . . . . . . . . . . . . . . . . . . .     $131,073       $62,850
                                                      ============= =============
Supplemental disclosure of noncash transactions:
  Capital Lease obligations incurred. . . . . . . . .     $194,317      $431,820
                                                      ============= =============
  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
                                                      ============= =============

  Conversion of preferred stock into common stock . .    $      -        $42,610
                                                      ============= =============
</TABLE>
                 See accompanying notes to financial statements.
<PAGE>



































        CNET, INC.

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

        (Unaudited)


(1) Basis of Presentation

        In the opinion of management, the accompanying unaudited condensed 
consolidated 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 consolidated financial 
statements included in the Company's most recent annual report on Form 
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 nine months ended 
September 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 EPS as presented in the 
accompanying consolidated financial statements and diluted EPS will not 
differ materially from EPS 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:

                                              September 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:

                                              September 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) Debt

During the quarter ended September 30, 1997 the Company secured a $10.0 
million line of credit from a bank.  The line of credit consists of a 
$5.0 million operating line of credit secured by all of the Company's 
tangible and intangible assets and a $5.0 million line of credit for up 
to 65% of capital equipment purchases.  The capital proceeds from the 
equipment line will convert to a two year term loan in July, 1998. As of 
September 30, 1997 the Company had not yet drawn any of the operating 
line of credit and had drawn $768,000 on the capital equipment line of 
credit.  In addition, the Company had proceeds of $2.5 million for an 
asset-based loan secured by certain capital equipment.  Both the $10.0 
million bank financing and the $2.5 million asset based loan are subject 
to certain financial covenants including, but not limited to, financial 
covenants relating to financial performance, tangible net worth, 
encumbrance of assets and creation of indebtedness.  At September 30, 
1997, the Company was in compliance with all financial covenants.



(4) 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 in cash, a $3.2 million note receivable, which 
is included in other assets, and certain additional payments for up to 
three years. 


(5) Commitments

        In September 1997, the Company entered into a lease for 
approximately 97,000 square feet of additional office space in San 
Francisco, California. The lease, which will commence on June 1, 1998, 
has a ten year term.  As security against the Lessor's tenant 
improvements, the Company must deliver to the Lessor on January 1, 1998, 
an irrevocable stand-by letter of credit in the amount of $3.25 million. 
 The Lessor will release the security should the Company meet certain 
financial goals, but in no case will the letter of credit be released 
earlier than January 1, 2000.  The Company plans to use the additional 
office space to consolidate its operations and for future growth.  The 
Company's current operations in San Francisco are housed in four separate 
buildings and the consolidation of its operations may require subleasing 
one or more of its existing locations. There can be no assurance that the 
Company will be able to negotiate a sublease for any of its property or 
that any sublease will generate sufficient rental rates to offset the 
Company's obligations.

(6) Legal Proceedings

        On August 15, 1997, Snap-on Incorporated and Snap-on Technologies 
commenced an action against the Company in the U.S. District Court of the 
Northern District of Illinois alleging trademark infringement and 
trademark dilution in connection with the Company's announcement of its 
Snap! Online service.  The plaintiffs sought a temporary restraining 
order, which was denied, and are now seeking an injunction to require 
modification of the name of the service.  The plaintiffs are not seeking 
monetary damages.  The Company believes the plaintiffs' claims are 
without merit and will continue to defend the case vigorously.  
Nevertheless, there can be no assurance as to whether, or on what terms, 
the Company will be able to continue using the Snap! Online name.



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 a 
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 September 30, 1997, had an accumulated deficit of $43.4 
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 $8.7 million and $4.5 million for the three 
months and $23.3 million and $8.8 million for the nine months ended 
September 30, 1997 and 1996, respectively. 

 Television Revenues

        Television revenues were $1.8 million and $1.7 million for the 
three months and $5.3 million and $3.1 million for the nine months ended 
September 30, 1997 and 1996, respectively.  The increase of $2.2 million 
for the nine month period was primarily due to the launch of three new 
television series during the second half of 1996. The three new programs 
ran for approximately one quarter during the nine month period ended 
September 30,1996 as compared to three quarters for the comparable period 
in 1997. Through September 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 exercised 
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 new programs carried on USA Networks, the 
Company entered into an agreement in August 1996 with Golden Gate 
Productions, L.P. ("GGP") whereby the Company produced the syndicated 
television series TV.COM, which was distributed exclusively by GGP.  The 
program commenced distribution in September 1996. In August 1997 the 
assets of GGP were acquired by a third party who has agreed to distribute 
the program through Trans World International. The Company cannot predict 
the effect of the transaction on the distribution of TV.COM, or on the 
advertising sales for TV.COM. 



Internet Revenues

        Internet revenues were $6.9 million and $2.9 million for the three 
months and $18.0 million and $5.7 million for the nine months ended 
September 30, 1997 and 1996, respectively.  The increase in Internet 
revenues of $4.0 million for the three months and $12.3 million for the 
nine months was primarily the result of additional delivery of 
advertising attributable to the increase in Internet sites produced by 
the Company from three on September 30, 1996 to nine on September 30, 
1997 as well as increased traffic and delivery of advertising on the 
three Internet sites existing on September 30, 1996.  The number of 
banner advertising units delivered on all sites grew 124% to 426 for the 
three month period and 171% to 1,116 for the nine month period ended 
September 30, 1997 as compared to the comparable periods in 1996.  In 
addition, Internet revenues include non-advertising revenues of $1.3 
million for the three months and $3.1 million for the nine months ended 
September 30, 1997. Non-advertising revenues include electronic commerce 
revenue, content licensing revenue, technology licensing and consulting. 
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 $136,000 and $351,000 
for the three months and $632,000 and $691,000 for the nine months ended 
September 30, 1997 and 1996, respectively.

        In September 1997, the Company, E! Online and E! Online's parent 
entered into an amendment to their preexisting consulting agreement, 
pursuant to which E! Online agreed to provide certain advertising 
promotions for the Company and to accelerate the payment of certain 
consulting fees to the Company, and the Company agreed to provide E! 
Online with certain banner advertisements and to reduce the total 
consulting fees that could ultimately be required from E! Online to the 
Company under this agreement.



        Cost of Revenues



 Total Cost of Revenues

        Total cost of revenues were $5.9 million and $4.3 million for the 
three months and $17.0 million and $10.4 million for the nine months 
ended September 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 $1.8 million for each of the three 
months and $5.3 million and $4.5 million for the nine months ended 
September 30, 1997 and 1996, representing 100%, 106%, 100% and 144% of 
the related revenues, respectively.  The increase of $823,000 for the 
nine month period ended September 30, 1997 as compared to the same period 
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 distribution agreement for TV.COM, 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 
the distributor. There can be no assurance that distribution revenue will 
be sufficient to cover these costs. 

 Cost of Internet Revenues

        Cost of Internet revenues were $4.1 million and $2.6 million for 
the three months and $11.7 million and $6.0 million for the nine months 
ended September 30, 1997 and 1996, representing 60%, 90%, 65% and 104% of 
the related revenues, respectively.  The increase of $1.5 million for the 
three months and $5.7 million for the nine months ended September 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 
September 30, 1996 to nine on September 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.  The Company launched its free 
consumer online service SNAP! Online in late September, 1997.  Through 
September 30, 1997 the costs of the production of SNAP! Online were 
classified as development expenses, however, commencing October 1, 1997 
the Company will classify the expenses for SNAP! Online as cost of 
Internet revenues. In addition, the Company expects to launch an 
additional Internet site, COMPUTERS.COM in November 1997 and the related 
costs will also shift from development expense to cost of Internet 
revenues. The classification of SNAP! Online expenses and COMPUTERS.COM 
expenses as cost of Internet revenues will significantly increase cost of 
revenues beginning October 1, 1997.  The increase may cause a  
significant reduction in  gross profit depending on revenues generated by 
the newly launched services. 

Sales and Marketing

        Sales and marketing expenses consist primarily of payroll and 
related expenses, consulting fees and advertising expenses.  Sales and 
marketing expenses were $2.8 million and $2.6 million for the three 
months and $7.8 million and $5.7 million for the nine months ended 
September 30, 1997 and 1996, representing 32%, 58%, 33% and 65% of total 
revenues, respectively. The increase in sales and marketing expenses for 
the three months ended September 30, 1997 compared to the same period in 
1996 is primarily attributable to expenses of $564,000 related to Snap! 
Online.  The increase in sales and marketing expenses for the nine months 
ended September 30, 1997 of $2.1 million compared to the same period in 
1996 was primarily attributable to increases in payroll and related 
benefits and additional expenses of $1.2 million related to SNAP! Online. 

 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 $4.7 million and $915,000 for the 
three months and $10.9 million and $2.0 million for the nine months ended 
September 30, 1997 and 1996, representing 55%, 20%, 47% and 23% of total 
revenues, respectively. The increase in development expenses of 
$3.8 million for the three months and $8.9 million for the nine months 
ended September 30, 1997 as compared to the same periods in 1996 was 
primarily attributable to $3.0 million and $7.6 million in development 
expenses related to SNAP! Online. SNAP! Online is a free consumer online 
service built on the open standards of the Internet and was launched in 
late September 1997. Additional development expenses of $1.3 million and 
$2.4 million were incurred for the three and nine months ended September 
30, 1997 for the development of COMPUTERS.COM, which is expected to 
launch in November, 1997.  The costs relating to the production of Snap! 
Online and COMPUTERS.COM will no longer be recognized as development 
costs on October 1, 1997 for Snap! Online and the date of launch for 
COMPUTERS.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 $1.5 million and $1.0 million for the three 
months and $4.3 million and $2.5 million for the nine months ended 
September 30, 1997 and 1996, representing 18%, 23%, 19% and 29% of total 
revenues, respectively.  The increase for the three months and nine 
months ended September 30, 1997 as compared to the same periods in 1996 
was 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. 

 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 $10.0 million in 
cash, 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 $148,000 and $(254,000) for the 
three months and $9.7 million and $(778,000) for the nine months ended 
September 30, 1997 and 1996, respectively.  Included in other income 
(expense) were gains of $9.2 million for the nine month period ended 
September 30, 1997 primarily related to the sale of the Company's equity 
interest in the joint venture as compared to losses of $(954,000) for the 
comparable period 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 $1.3 million and $4.5 
million for the nine months ended September 30, 1997 and 1996, 
respectively, was primarily attributable to net losses in such periods.  
Net cash used in investing activities of $15.4 million and $11.8 million 
for the nine months ended September 30, 1997 and 1996 respectively, was 
primarily attributable to purchases of equipment and programming assets. 
 Cash flows provided by financing activities for the nine months ended 
September 30, 1997 consisted primarily of proceeds from the issuance of 
common stock and debt, and for the nine months ended September 30, 1996 
consisted primarily of proceeds from the issuance of common stock, 
preferred stock and debt. 

        The Company currently has obligations under notes payable and 
capital leases of $4.1 million. Such obligations were incurred to finance 
equipment purchases and are payable through June 2001. 

        As of September 30, 1997, the Company's principal source of 
liquidity was approximately $13.0 million in cash and cash equivalents. 
During the quarter ended September 30, 1997 the Company secured a $10.0 
million line of credit from a bank.  The line of credit consists of a 
$5.0 million operating line of credit secured by all of the Company's 
tangible and intangible assets and a $5.0 million line of credit for up 
to 65% of capital equipment purchases.  The capital proceeds from the 
equipment line will convert to a two year term loan in July, 1998. As of 
September 30, 1997 the Company had not yet drawn any of the operating 
line of credit and had drawn $768,000 on the capital equipment line of 
credit.  In addition, the Company had proceeds of $2.5 million for an 
asset based loan secured by certain capital equipment. Both the $10.0 
million bank financing and the $2.5 million asset- based loan are subject 
to certain financial covenants.  At September 30,1997, the Company was in 
compliance with the financial covenants. 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. 

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. 



                           PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS

        On August 15, 1997, Snap-on Incorporated and Snap-on Technologies 
commenced an action against the Company in the U.S. District Court of the 
Northern District of Illinois alleging trademark infringement and 
trademark dilution in connection with the Company's announcement of its 
Snap! Online service.  The plaintiffs sought a temporary restraining 
order, which was denied, and are now seeking an injunction to require 
modification of the name of the service.  The plaintiffs are not seeking 
monetary damages.  The Company believes the plaintiffs' claims are 
without merit and will continue to defend the case vigorously.  
Nevertheless, there can be no assurance as to whether, or on what terms, 
the Company will be able to continue using the Snap! Online name.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

10.31  Security and Loan Agreement between Imperial Bank and CNET dated July 24,
       1997.
10.32  Note with Imperial Bank and CNET dated July 24, 1997.
10.33  Loan and Security Agreement between The CIT Group dated September 5,
       1997.
10.34  Office Lease between One Beach Street, LLC, and CNET dated September 24,
       1997.
11.1   Statement of Computation of Net Loss per Share
27.    Financial Data Schedule

          (b)  Reports on Form 8-K

On July 11, 1997, the Company filed a current report on Form 8-K in connection
with its disposition of E! Online.




<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

November 14, 1997

Date