---

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

# FORM 10-Q

(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, 2003

# OR

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

# For the transition
period from ________to _________

# Commission file number
0-20939

# CNET Networks, Inc.(Exact name of
Registrant as specified in its Charter)

|Delaware(State or Other Jurisdiction of Incorporation or Organization) |  | 13-3696170 (I.R.S. Employer Identification Number)
|---------------------------------------------------------------------- |  | --------------------------------------------------

# 235 Second Street, San
Francisco, CA 94105 (Address of Principal
Executive Offices including Zip Code)

# Telephone Number (415)
344-2000 (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, 2003 there were 141,624,657 shares of the registrants common stock
outstanding.

---

# CNET Networks, Inc. TABLE OF CONTENTS

|                                                                        | Page
No.
|----------------------------------------------------------------------- | --------
|PART I. FINANCIAL INFORMATION                                           |         
|                                                                        |         
|Item 1. Financial Statements (unaudited):                               |         
|                                                                        |         
|Condensed Consolidated Balance Sheets at September 30, 2003             |         
|and December 31, 2002                                                   |         
|                                                                        |         
|Condensed Consolidated Statements of Operations for the                 |         
|three and nine months ended September 30, 2003 and 2002                 |         
|                                                                        |         
|Condensed Consolidated Statements of Cash Flows for the nine            |         
|months ended September 30, 2003 and 2002                                |         
|                                                                        |         
|Notes to the Condensed Consolidated Financial Statements                |         
|                                                                        |         
|Item 2. Management's Discussion and Analysis of Financial Condition and |         
|Results of Operations                                                   |         
|                                                                        |         
|Item 3. Quantitative and Qualitative Disclosures About Market Risk      |         
|                                                                        |         
|Item 4. Controls and Procedures                                         |         
|                                                                        |         
|                                                                        |         
|PART II. Other Information                                              |         
|                                                                        |         
|Item 1. Legal Proceedings                                               |         
|                                                                        |         
|Item 2. Changes in Securities and Use of Proceeds                       |         
|                                                                        |         
|Item 3.  Defaults Upon Senior Securities                                |         
|                                                                        |         
|Item 4. Submission of Matters to a Vote of Security Holders             |         
|                                                                        |         
|Item 5. Other Information                                               |         
|                                                                        |         
|Item 6. Exhibits and Reports on Form 8-K                                |         
|                                                                        |         
|Signatures                                                              |         



# CNET NETWORKS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (UNAUDITED)(000s, except share
and per share data)

|                                                    | September 30,
2003 | December 31,
2002
|--------------------------------------------------- | ------------------ | -----------------
|ASSETS                                              |                    |                  
|Current Assets:                                     |                    |                  
|Cash and cash equivalents                           |                    |                  
|Investments in marketable debt securities           |                    |                  
|Accounts receivable, net                            |                    |                  
|Other current assets                                |                    |                  
|                                                    |                    |                  
|Total current assets                                |                    |                  
|Restricted cash                                     |                    |                  
|Investments in marketable debt securities           |                    |                  
|Property and equipment, net                         |                    |                  
|Other assets                                        |                    |                  
|Intangible assets, net                              |                    |                  
|Goodwill                                            |                    |                  
|                                                    |                    |                  
|Total assets                                        |                    |                  
|                                                    |                    |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                |                    |                  
|Current liabilities:                                |                    |                  
|Accounts payable                                    |                    |                  
|Accrued liabilities                                 |                    |                  
|Current portion of long-term debt                   |                    |                  
|                                                    |                    |                  
|Total current liabilities                           |                    |                  
|Non-current liabilities:                            |                    |                  
|Long-term debt                                      |                    |                  
|Other liabilities                                   |                    |                  
|                                                    |                    |                  
|Total liabilities                                   |                    |                  
|Stockholders' equity:                               |                    |                  
|Common stock; $0.0001 par value; 400,000,000 shares |                    |                  
|authorized; 141,286,733 outstanding at              |                    |                  
|September 30, 2003 and 139,251,879                  |                    |                  
|outstanding at December 31, 2002                    |                    |                  
|Notes receivable from stockholders                  |                    |                  
|Additional paid-in-capital                          |                    |                  
|Accumulated other comprehensive loss                |                    |                  
|Treasury stock, at cost                             |                    |                  
|Accumulated deficit                                 |                    |                  
|                                                    |                    |                  
|Total stockholders' equity                          |                    |                  
|                                                    |                    |                  
|Total liabilities and stockholders'equity           |                    |                  
|                                                    |                    |                  

See accompanying notes to the condensed consolidated financial statements.

# CNET NETWORKS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED) (000s, except share and per share data)

|                                             | Three Months Ended
September 30, | Nine Months Ended
September 30,
|-------------------------------------------- | -------------------------------- | -------------------------------
|
|Revenues:                                    |                                  |                                
|Internet                                     |                                  |                                
|Publishing                                   |                                  |                                
|                                             |                                  |                                
|Total revenues                               |                                  |                                
|                                             |                                  |                                
|Operating expenses:                          |                                  |                                
|Cost of revenues                             |                                  |                                
|Sales and marketing                          |                                  |                                
|General and administrative                   |                                  |                                
|Depreciation                                 |                                  |                                
|Amortization of intangible assets            |                                  |                                
|Asset impairment                             |                                  |                                
|                                             |                                  |                                
|Total operating expenses                     |                                  |                                
|                                             |                                  |                                
|Operating loss                               |                                  |                                
|Non-operating income (expense):              |                                  |                                
|Realized gains on sale of investments        |                                  |                                
|Realized losses on sale or impairment of     |                                  |                                
|investments                                  |                                  |                                
|Interest income                              |                                  |                                
|Interest expense                             |                                  |                                
|Other                                        |                                  |                                
|                                             |                                  |                                
|Total non-operating expense                  |                                  |                                
|                                             |                                  |                                
|Loss before income taxes                     |                                  |                                
|Income tax expense (benefit)                 |                                  |                                
|                                             |                                  |                                
|Net loss                                     |                                  |                                
|                                             |                                  |                                
|Basic and diluted net loss per share         |                                  |                                
|                                             |                                  |                                
|Shares used in calculating basic and diluted |                                  |                                
|net loss per share                           |                                  |                                
|                                             |                                  |                                
|                                             |                                  |                                

See accompanying notes to the condensed consolidated financial statements.

# CNET NETWORKS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) (000s)

|                                                    | September 30,
|--------------------------------------------------- | -------------
|
|Cash flows from operating activities:               |              
|Net Loss                                            |              
|Adjustments to reconcile net loss to net cash used  |              
|in operating activities:                            |              
|Depreciation and amortization                       |              
|Asset impairment and disposals                      |              
|Gain on disposal of fixed assets                    |              
|Deferred taxes                                      |              
|Noncash interest                                    |              
|Gain on debt retirement                             |              
|Noncash stock compensation                          |              
|Allowance for doubtful accounts                     |              
|(Gain) loss on sale and impairment of marketable    |              
|securities and privately held investments           |              
|Changes in operating assets and liabilities, net of |              
|acquisitions:                                       |              
|Accounts receivable                                 |              
|Other assets                                        |              
|Accounts payable                                    |              
|Accrued liabilities                                 |              
|Other long-term liabilities                         |              
|Foreign currency translation gain (loss)            |              
|                                                    |              
|Net cash used in operating activities               |              
|                                                    |              
|Cash flows from investing activities:               |              
|Purchase of marketable debt securities              |              
|Proceeds from sale of marketable debt securities    |              
|Proceeds from sale of marketable equity             |              
|investments                                         |              
|Proceeds from sale of (investments in)              |              
|privately held companies                            |              
|Proceeds from asset sales                           |              
|Net cash paid for acquisitions                      |              
|Capital expenditures                                |              
|                                                    |              
|Net cash provided by investing activities           |              
|                                                    |              
|Cash flows from financing activities:               |              
|Payments received on stockholders' notes            |              
|Net proceeds from employee stock purchase plan      |              
|Net proceeds from exercise of options & warrants    |              
|Principal payments on borrowings and debt           |              
|retirement                                          |              
|                                                    |              
|Net cash provided by (used in) financing            |              
|activities                                          |              
|                                                    |              
|Net increase (decrease) in cash and cash            |              
|equivalents                                         |              
|Cash and cash equivalents at the beginning of the   |              
|period                                              |              
|                                                    |              
|Cash and cash equivalents at the end of the period  |              
|                                                    |              
|                                                    |              

# CNET NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED) (Continued) (000s)

|                                     | Nine Months Ended
September 30,
|------------------------------------ | -------------------------------
|
|Supplemental disclosure of cash flow |                                
|information:                         |                                
|Interest paid                        |                                
|                                     |                                
|Taxes refunded                       |                                
|                                     |                                

See accompanying notes to the condensed consolidated financial statements.



# CNET NETWORKS, INC. NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2003

# (1) BASIS OF FINANCIAL
STATEMENTS

BUSINESS AND BASIS OF
PRESENTATION

CNET Networks, Inc. (CNET) is a leading global media company informing and connecting buyers, users and sellers
of personal technology, business technology and games and entertainment products.

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 CNETs most recent Annual
Report on Form 10-K, as filed with the Securities and Exchange Commission, which contains
additional financial and operating information and information concerning the significant
accounting policies followed by CNET.

The condensed consolidated results of operations for the three and nine months ended September 30, 2003 are not necessarily
indicative of the results to be expected for the current year or any other future period.

CONCENTRATION OF CREDIT
RISK

No revenues from any one customer exceeded 10% of
 total revenues for the three months ended September 30, 2003. Revenues from one
customer, Gateway Inc., approximate 11% of total revenues for the nine months ended
September 30, 2003. Revenues from this one customer approximated 14% and 11% of total
revenues for the three and nine month-periods ended September 30, 2002, respectively. As
of September 30, 2003, approximately 66% of the year-to-date revenues from Gateway, Inc.
were generated from a custom publishing contract. Approximately 1% of CNETs accounts
receivable balance at September 30, 2003 related to Gateway Inc.

INCOME TAXES

Income tax expense has been recorded based on
an estimated effective tax rate for the year ended December 31, 2003. The
estimated effective tax rate has taken into account any change in the valuation allowance
for deferred tax assets where the realization of various deferred tax assets is subject to
uncertainty. Management believes that sufficient uncertainty exists regarding the future
realization of deferred tax assets and, accordingly, a full valuation allowance has been
provided against the gross deferred tax assets. During the second quarter of 2003, CNET
was refunded approximately $8.6 million of recoverable taxes. During the second quarter of
2002, CNET was refunded approximately $31.7 million of recoverable taxes.

IMPAIRMENT OF LONG-LIVED
ASSETS

CNET reviews its long-lived assets if events or
 changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to the estimated undiscounted (and without interest
charges) future cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the asset exceeds the fair value of the asset. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less costs to
sell.

GOODWILL AND INTANGIBLE
ASSETS

Under Statement of Financial Accounting Standard
 (SFAS) 142, Goodwill and Other Intangible Assets, goodwill
and intangible assets with indefinite useful lives are to be tested for impairment at
least annually. Intangible assets with definite useful lives will continue to be amortized
over their respective estimated useful lives.

Goodwill and intangible assets of a reporting
unit are reviewed for impairment if events or changes in circumstances indicate
that the carrying amount of its goodwill or intangible assets may not be recoverable.
Impairment of reporting unit goodwill is evaluated based on a comparison of the reporting
units carrying value to the implied fair value of the reporting unit. Conditions
that indicate that impairment of goodwill should be evaluated include a sustained decrease
in our market value or an adverse change in business climate. CNET reviews goodwill for
impairment on at least an annual basis. CNET has established August 31 as the valuation
date on which this annual review takes place.

CNET performed its annual evaluation of goodwill
and intangible assets impairment as of August 31, 2003. CNET determined that
the carrying value of goodwill and other intangible assets for all its reporting units did
not exceed their implied fair values.

STOCK-BASED COMPENSATION

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

CNET applies APB Opinion No. 25 in
accounting for its stock-based compensation plans and, accordingly, no compensation cost
has been recognized for the plans in the financial statements because options are granted
at the current market price. Had CNET determined compensation cost based on the fair value
at the grant date for its stock options under SFAS 123, CNETs net loss and net loss
per share would have been increased to the pro forma amounts indicated below:

|(000s except per share data)          | Three Months Ended
September 30, | Nine Months Ended
September 30,
|------------------------------------- | -------------------------------- | -------------------------------
|
|Net loss:                             |                                  |                                
|As reported                           |                                  |                                
|Fair value based method               |                                  |                                
|compensation expense                  |                                  |                                
|                                      |                                  |                                
|Proforma                              |                                  |                                
|                                      |                                  |                                
|Basic and diluted net loss per share: |                                  |                                
|As reported                           |                                  |                                
|Proforma                              |                                  |                                

The effects of applying SFAS 123 in
this pro forma disclosure is not indicative of the effects on reported results for future
periods. SFAS No. 123 does not apply to awards prior to 1995. The weighted-average fair
value of options granted in the three and nine months ended September 30, 2003 was $4.54
and $2.92, and in the three and nine months ended September 30, 2002 was $0.96 and $3.87,
respectively. The fair value of each option grant is estimated on the date of grant using
the Black Scholes option-pricing model with the following weighted-average assumptions
used for grants in the three and nine months ended September 30, 2003 and 2002: no
dividend yield; expected volatility of 102% and 103% for the three and nine months ended
September 30, 2003, respectively, and 105% for both periods in 2002; risk-free interest
rate of 2.24% and 2.66% for the three and nine months ended September 30, 2003,
respectively, and of 3.45% and 4.07% for the three and nine months ended September 30,
2002, respectively; and an expected life of 3.0 years and 4.96 years for the three and
nine months ended September 30, 2003, respectively, and of 5.0 years for both the three
and nine months ended September 30, 2002.  Beginning with the third quarter of 2003, CNET
decreased the estimate of the expected life of new options granted to employees from five years
to three years.  CNET based its expected life assumption on historical experience as well as the
terms and vesting periods of the options granted.  The reduction in the estimated expected life
was a result of an analysis of CNET's historical experience.

At the annual meeting of stockholders
on June 12, 2002, CNETs stockholders approved the amendment of CNETs stock
option plans to permit the exchange of options having a strike price in excess of $12.00
for a lesser number of new options to be granted at least six months and one day from
cancellation of the surrendered options. The offer to participate in the exchange expired
on July 26, 2002. All surrendered options were cancelled as of July 27, 2002. A total of
8,690,250 options were surrendered. On January 28, 2003, 3,218,547 options were regranted
at an exercise price of $2.535. Certain employees on leave of absence as of January 28,
2003 have subsequently returned to work and have been issued 10,060 options at an average
exercise price of $2.03. For those employees who were on leave of absence as of January
28, 2003 and have not yet returned to work, their potential regrants, which total 7,273
options if issued, will be effective on the date of their return to work at an exercise
price to be set on the fifth day of the month following their return. The regranted
options retained the same vesting schedule as the options they replaced, subject to a
six-month standstill period that expired on July 28, 2003.

RECENT ACCOUNTING
PRONOUNCEMENTS

In June 2002, the FASB issued SFAS
146, Accounting for Costs Associated with Exit or Disposal Activities. This
statement supercedes Emerging Issues Task Force (EITF) Issue 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized and
measured initially at fair value only when the liability is incurred. Under EITF 94-3, a
liability for an exit cost was recognized at the date of an entitys commitment to an
exit plan. Under SFAS 146, the FASB has concluded that an entitys commitment to a
plan does not necessarily create a present obligation to others that meets the definition
of a liability. The provisions of SFAS 146 are effective for exit and disposal activities
initiated after December 31, 2002. CNET has adopted SFAS 146. This adoption has not had a
material effect on our operating results or financial position.

In November 2002, the FASB issued a
Consensus, which clarified certain issues within EITF 00-21, Revenue Arrangements
with Multiple Deliverables. The Consensus addresses how to allocate the revenue in
an arrangement involving multiple deliverables into separate units of accounting
consistent with the identified separate earnings processes of each deliverable for revenue
recognition purposes. The Issue also addresses how each element in a bundled sales
arrangement should be measured and allocated to the separate units of accounting in the
arrangement. The Consensus is effective prospectively for arrangements entered into in
fiscal periods beginning after June 15, 2003. The implementation of this Consensus has not had a
material effect on our operatiing results or financial position.

In November 2002, the FASB issued
FASB Interpretation (FIN) 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others, an Interpretation of SFAS 5, 57 and 107 and a rescission of FIN 34. The
Interpretation expands the disclosure requirements for most guarantees. FIN 45 also
clarifies that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair value of the obligations it assumes under that guarantee.
The initial recognition and initial measurement provisions apply on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosure requirements are
effective for financial statements of interim or annual periods ending after December 15,
2002. The adoption of FIN 45 has not had an impact on our consolidated financial
statements.

In December 2002, the FASB issued
Statement of Financial Accounting Standard (SFAS) 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, which amends SFAS 123,
Accounting for Stock-Based Compensation. SFAS 148 provides alternative methods
of transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirement
of SFAS 123 to require more prominent and more frequent disclosures in financial
statements about the effects of stock-based compensation, regardless of which accounting
method is used to account for stock-based compensation. The transition guidance and annual
disclosure provisions of SFAS 148 are effective for fiscal years ending after December 15,
2002. The interim disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December 15, 2002. CNET has
adopted the disclosure requirements of SFAS 148.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest Entities, an interpretation of
Accounting Research Bulletin 51, Consolidated Financial Statements. FIN 46
addresses the consolidation by business enterprises of variable interest entities as
defined in the Interpretation. FIN 46 expands disclosure if an enterprise consolidates a
variable interest entity, and the Interpretation requires disclosure for those companies
that hold significant variable interests in a variable interest entity but are not
required to consolidate that interest. FIN 46 applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities established
after that date. FIN 46 applies for the first period ending after December 15, 2003, to
variable interest entities in which a company holds a variable interest that it acquired
before February 1, 2003. Disclosure required by FIN 46 must be included in all financial
statements issued after January 31, 2003. As of September 30, 2003, CNET does not have any
variable interest entities, and therefore, the adoption of FIN 46 has not had a material
impact on our consolidated financial statements.

RECLASSIFICATIONS

Certain amounts in the financial
statements and notes thereto have been reclassified to conform to the current year
classification.

# (2) ACQUISITIONS

On April 1, 2003, CNET acquired intellectual property and certain other assets of European Technology Forum, Ltd., an
organizer of conferences and events aimed at the technology industry. On April 25, 2003,
CNET acquired intellectual property and certain other assets of eRankings, Inc., a
provider of news, reviews and in-depth information related to PC and video gaming. On May
6, 2003, CNET acquired intellectual property and certain other assets of GameFAQs.com,
Inc, which provides an online community for users to post gaming strategy, hints, codes,
tips and messages related to PC and video gaming. The aggregate purchase price for all
three unrelated acquisitions was $2.2 million. A total of $2.0 million was paid in cash
with the remainder outstanding under a note payable that is to be paid within two years of
the acquisition. The transactions have been accounted for using the purchase method of
accounting.

The total purchase price has been allocated to the tangible and intangible assets based on estimates of their respective
fair values. The aggregate purchase price of $2.2 million was allocated to intangible
assets of approximately $800,000 that are being amortized over a three-year period and
goodwill of approximately $1.4 million.

# (3) GOODWILL AND
INTANGIBLE ASSETS

# Acquired Intangible
Assets

The following table sets forth the
amount of intangible assets that are subject to amortization, including the related
accumulated amortization:

|(000s)                       | September 30, 2003 | December 31, 2002
|---------------------------- | ------------------ | -----------------
|
|Amortized intangible assets: |                    |                  
|Tradename/trademarks         |                    |                  
|Registered Users             |                    |                  
|Subscriptions                |                    |                  
|Content                      |                    |                  
|Noncompetition agreements    |                    |                  
|Developed technology         |                    |                  
|                             |                    |                  
|Total                        |                    |                  
|                             |                    |                  

Given the declines in the equity
markets and in CNETs stock price during the third quarter of 2002, the results of
CNETs annual impairment test performed as of August 31, 2002 indicated the carrying
value of goodwill and other intangible assets for the U.S. Media reporting unit exceeded
their implied fair values, and an impairment charge of $239.1 million for goodwill and
$40.5 million for intangible assets of that reporting unit was recorded in the third
quarter of 2002. Additionally, certain other assets, including fixed assets, totaling $1.8
million were deemed to be impaired and were written-off.

Intangibles that are subject to
amortization are amortized on a straight-line basis over three years, except for certain
trademarks that are amortized over ten years. Estimated future amortization expense
related to other intangible assets at September 30, 2003 is as follows:

|(000s)     | 
|---------- | 
|Q4 2003    | 
|2004       | 
|2005       | 
|2006       | 
|2007       | 
|Thereafter | 
|           | 
|           | 
|           | 

# Goodwill

The following table sets forth the
changes in goodwill for the nine months ended September 30, 2003:

|(000s)                           | Total | U.S.
Media | Computer
Shopper | Channel
Services | Asia | Europe
|-------------------------------- | ----- | ---------- | ---------------- | ---------------- | ---- | ------
|Balance as of December 31, 2002  |       |            | $                | 59,150           |      | $     
|Acquisitions                     |       |            |                  | 1,474            |      |       
|                                 |       |            |                  |                  |      |       
|Balance as of September 30, 2003 |       |            | $                | 60,624           |      | $     
|                                 |       |            |                  |                  |      |       

# (4) NET LOSS PER SHARE

The following table sets forth the computation
of net loss per share:

|(000s except share and per share data)      | Three Months Ended
September 30, | Nine Months Ended
September 30,
|------------------------------------------- | -------------------------------- | -------------------------------
|
|Basic and Diluted Earnings Per Share        |                                  |                                
|Loss available to common stockholders       |                                  |                                
|                                            |                                  |                                
|Weighted average shares - basic and diluted |                                  |                                
|                                            |                                  |                                
|Basic and diluted loss per common share     |                                  |                                
|                                            |                                  |                                

Basic net loss per share is computed
using the weighted average number of shares of common stock outstanding during the period.
Diluted net loss per share is computed using the weighted average number of shares of
common stock and dilutive common stock equivalents outstanding during the period.

Basic and diluted net loss per share
for the three months ended September 30, 2003 does not include the effect of 6,955,718
common shares related to options at an average exercise price of $7.49 or 524 shares of
unvested restricted stock with an average exercise price of $1.18 per share or 3,040,242
common shares related to the 5% Convertible Subordinated Notes offering with an average
conversion price of $37.41 per share because their effect is anti-dilutive. Basic and
diluted net loss per share for the three months ended September 30, 2002 does not include
the effect of 6,584 shares of unvested restricted stock with an average exercise price of
$1.18 per share because their effect is anti-dilutive. In addition, diluted net loss per
share for the three months ended September 30, 2002 does not include the effect of 12,397
common shares related to options with an average exercise price of $1.28 per share and
4,622,624 common shares related to the 5% Convertible Subordinated Notes offering with an
average conversion price of $37.41 per share because their effect is anti-dilutive.

Basic and diluted net loss per share
for the nine months ended September 30, 2003 does not include the effect of 3,336,048
common shares related to options at an average exercise price of $4.69 or 1,838 shares of
unvested restricted stock with an average exercise price of $1.18 per share or 3,040,242
common shares related to the 5% Convertible Subordinated Notes offering with an average
conversion price of $37.41 per share because their effect is anti-dilutive. Basic and
diluted net loss per share for the nine months ended September 30, 2002 does not include
the effect of 9,464 shares of unvested restricted stock with an average exercise price of
$1.23 per share because their effect is anti-dilutive. In addition, diluted net loss per
share for the three months ended September 30, 2002 does not include the effect of
1,174,946 common shares related to options with an average exercise price of $3.79 per
share and 4,622,624 common shares related to the 5% Convertible Subordinated Notes
offering with an average conversion price of $37.41 per share because their effect is
anti-dilutive.

# (5) COMPREHENSIVE LOSS

The changes in the components of
other comprehensive income (loss) for the three and nine months ended September 30, 2003
and 2002 are as follows:

|(000s)                                   | Three Months Ended
September 30, | Nine Months Ended
September 30,
|---------------------------------------- | -------------------------------- | -------------------------------
|
|Unrealized holding gain (loss) from:     |                                  |                                
|Marketable debt securities               |                                  |                                
|Deferred taxes related to                |                                  |                                
|unrealized holding (gains) losses        |                                  |                                
|                                         |                                  |                                
|                                         |                                  |                                
|Foreign currency translation gain (loss) |                                  |                                
|                                         |                                  |                                
|                                         |                                  |                                
|                                         |                                  |                                

The components of other comprehensive
loss are:

|(000s)                            | Three Months Ended
September 30, | Nine Months Ended
September 30,
|--------------------------------- | -------------------------------- | -------------------------------
|
|Net loss                          |                                  |                                
|                                  |                                  |                                
|Other comprehensive income:       |                                  |                                
|Unrealized holding gains arising  |                                  |                                
|during the period, net of tax     |                                  |                                
|Unrealized holding losses arising |                                  |                                
|during the period, net of tax     |                                  |                                
|Foreign currency translation gain |                                  |                                
|(loss)                            |                                  |                                
|                                  |                                  |                                
|Comprehensive loss                |                                  |                                
|                                  |                                  |                                

# (6) SEGMENTS

CNETs primary areas of
measurement and decision-making include three principal business segments. Based upon the
criteria established by SFAS 131, Disclosures about Segments of an Enterprise and
Related Information, CNET has determined that its business segments are U.S. Media,
International Media and Channel Services. U.S. Media consists of an online network
including Internet sites providing sources of technology information, as well as shopping
services and a technology print publication providing technology news and information.
International Media includes the delivery of online technology information and several
technology print publications in non-U.S. markets. Channel Services includes a product
database licensing business and an online technology marketplace for resellers,
distributors and manufacturers.

Summarized information by segment as
excerpted from the internal management reports is as follows:

|(000s)                 | Three Months Ended September 30, 2003
|---------------------- | -------------------------------------
|
|Revenues               |                                      
|Operating expenses     |                                      
|                       |                                      
|Operating income(loss) |                                      
|                       |                                      
|
|
|Revenues               |                                      
|Operating expenses     |                                      
|                       |                                      
|Operating loss         |                                      
|                       |                                      
|                       |                                      
|
|
|Revenues               |                                      
|Operating expenses     |                                      
|                       |                                      
|Operating income(loss) |                                      
|                       |                                      
|
|
|Revenues               |                                      
|Operating expenses     |                                      
|                       |                                      
|Operating loss         |                                      
|                       |                                      
|                       |                                      

Since operating income (loss) before depreciation
and amortization is the measure of operating performance that management uses for making
decisions and allocating resources, certain operating costs are not allocated across
segments. These unallocated operating costs, included in Other in the tables
above, represent all costs related to the realignment of CNETs business and all
depreciation and amortization expenses, as well as asset impairment and disposal charges.
For the three months ended September 30, 2003, Other includes depreciation and
amortization expenses of $5.6 million. For the three months ended September 30, 2002,
Other includes $281.4 million of asset impairment and depreciation and
amortization expenses of $15.6 million.

For the nine months ended September
30, 2003, Other includes $9.8 million of realignment expenses and depreciation
and amortization expenses of $18.5 million. The $9.8 million of realignment expenses
consisted of $2.8 million of lease abandonment expense, $890,000 of costs associated with
the termination of CNETs on-air radio operations, and $6.1 million of severance
(relating to 135 employees). This $9.8 million of expense was included in the statement of
operations as $3.9 million in cost of revenue, $925,000 in sales and marketing and $5.0
million in general and administrative expenses. Of the $7.0 million of severance and radio
termination costs that were expensed in the first half of 2003, $127,000 had not yet been
paid out by September 30, 2003. For the nine months ended September 30, 2002,
Other includes $281.4 million of asset impairment, $10.6 million of
realignment expenses and depreciation and amortization expenses of $52.9 million. The
$10.6 million of realignment expenses consisted of $3.1 in lease abandonment charges, $5.6
million in severance and $1.9 million of other realignment related expenses. This $10.6
million of expense was included in the statement of operations as $659,000 in cost of
revenue, $339,000 in sales and marketing and $9.7 million in general and administrative
expenses.

Assets are not allocated to segments
for internal reporting purposes. Segment operating income (loss) before realignment
expenses and depreciation and amortization should not be considered a substitute for
operating income, cash flows or other measures of financial performance prepared in
accordance with accounting principles generally accepted in the United States of America.

# (7) COMMITMENTS AND
CONTINGENCIES

# Lease Abandonment

In 2001, CNET performed an evaluation
of its domestic and international real estate requirements. This evaluation resulted in
the consolidation or abandonment of several leased facilities. In connection with these
abandoned leases, CNET established an accrual for lease abandonment. The balance in this
accrual was $9.8 million at December 31, 2002. During the nine-month period ended
September 30, 2003, cash expenditure reductions to this accrual were $8.4 million, and an
additional $3.1 million was added to the accrual due to modifications of certain
assumptions regarding the timing of subleasing the facilities and higher than anticipated
costs to terminate two of the leases. At September 30, 2003, a balance of $4.5 million
remained in this accrual. The total undiscounted liability under these leases, assuming
that the spaces cannot be sublet, is approximately $7.1 million.

# Legal

In August 1999, Simon Property Group
(SPG) filed a trademark infringement suit in federal district court in Indianapolis
against mySimon, Inc. (mySimon), a subsidiary of CNET acquired on February 29, 2000. SPG
alleged that the mySimon trademark infringed SPGs Simon trademark. On
August 31, 2000, following a trial on the subject, the jury found in favor of SPG and
awarded damages against mySimon in the amount of $11.5 million in compensatory damages,
$5.3 million for corrective advertising, and $10.0 million in punitive damages. On
September 25, 2000, the court entered an order establishing an escrow for royalties
pending final resolution of the litigation where mySimon pays into escrow 2% of its gross
cash receipts each month.

On January 24, 2001, the judge
eliminated the $11.5 million compensatory damages award, reduced the $10.0 million
punitive damages award to the statutory minimum of $50,000, and offered SPG the
opportunity to accept ten dollars (a remittitur) for damages attributable to corrective
advertising in exchange for immediate entry of judgment for the entire case in lieu of a
re-trial on the subject of corrective advertising. On February 14, 2001, SPG filed its
election to seek a re-trial on the issue of corrective advertising in lieu of the
ten-dollar remittitur. The judges January 24, 2001 order also provided that if the
jurys verdict of trademark infringement is upheld on appeal, mySimon will be
required to change its name and domain name. The judges January 24, 2001 order
stated that when final judgment was entered he would stay the name change pending the
completion of the appeal process.

On December 7, 2001, mySimon filed a
motion for a dismissal of the case or, alternatively a new trial based on newly discovered
evidence it believes SPG should have produced prior to the August 2000 trial. On March 26,
2003, the court granted mySimons motion for a new trial on all issues, thereby
eliminating the original jury verdict. The court also granted mySimons motion that
sanctions be imposed against SPG and reserved a decision about what the appropriate
sanctions should be until later proceedings. No date for a new trial has been set. It is
not possible to predict the amount of damages, if any, that could be awarded in a
re-trial; however, such amounts could be material to our results of operations and
financial condition.

Two shareholder class action lawsuits
were filed in the United States District Court for the Southern District of New York on
August 16, 2001 and September 26, 2001, against Ziff-Davis, Eric Hippeau and Timothy
OBrien, and investment banks that were the underwriters of the public offering of
ZDNet series of Ziff-Davis stock (the ZDNet Offering). One of the complaints also names
CNET as a defendant, as successor in liability to Ziff-Davis. The complaints are similar
and allege violations of the Securities Act of 1933, and one of the complaints also
alleges violations of the Securities Exchange Act of 1934. The complaints allege the
receipt of excessive and undisclosed commissions by the underwriters in connection with
the allocation of shares of common stock to certain investors in the ZDNet Offering and
agreements by those investors to make additional purchases of stock in the aftermarket at
pre-determined prices. Plaintiffs allege that the Prospectus for the ZDNet Offering was
false and misleading and in violation of the securities laws because it did not disclose
the arrangements. The action seeks damages in an unspecified amount. The action is being
coordinated with over 300 nearly identical actions filed against other companies and their
underwriters. No date has been set for any responses to the complaints. On February 19,
2003, the Court granted CNETs motion to dismiss the Section 10(b) claim with leave
to replead, and denied the motion to dismiss the Section 11 claim.

The majority of the issuers,
including CNET, and their insurers have entered into a Memorandum of Understanding with
the plaintiffs to dismiss the issuers from the litigation in exchange for a
back-stop guarantee from the issuers and their insurers pursuant to which they
will pay the plaintiffs any shortfall between $1 billion and the amounts recovered in the
ongoing litigation against the underwriters. The parties are currently negotiating
definitive settlement documents, which are subject to the approval of the court. Based on
its insurance coverage and the number of issuers participating in the settlement, if the
settlement is finalized CNET does not believe that it will face any material liability as
a result of the litigation. If the settlement does not occur, CNET intends to seek
indemnification from the underwriters, though it is not possible to predict whether the
litigation will have a material adverse effect on CNETs financial condition or
results of operations.

# ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking
statements that are subject to risks and uncertainties that could cause actual results to
differ materially. Further information about these forward-looking statements and risks
associated with our business can be found below under the subheading Special Note
Regarding Forward-Looking Statements and Risk Factors.

GENERAL

CNET Networks, Inc. is a leading global media
company focused on three primary content categories - personal technology, businesss technology and games
and entertainment.  CNET has established its leadership position through its ability to effectively create,
manage, and monetize interactive content.  CNET Networks combines
its award-winning content with the power of interactive technology to provide its users an
intuitive, dynamic and relevant environment. CNETs content portfolio features top
brands including CNET, ZDNet, TechRepublic, Download, GameSpot, and mySimon, as well as
Computer Shopper magazine and Channel Services. With a strong presence in the U.S., Asia
and Europe, CNET Networks has operations in 12 countries.

During 2002 and 2003, we took actions
to simplify our organizational structure by realigning our business around key business
categories. We initiated reductions in our global workforce and have incurred additional
expenses as we continued to lower our cost structure through the discontinuance of
non-profitable or non-growth areas of our Internet operations and the abandonment of
certain leases. We have referred to the costs incurred to realign our business as
realignment costs. These realignment costs amounted to $9.8 million and $10.6
million in the nine months ended September 30, 2003 and 2002, respectively, and are
included in cost of revenues, sales and marketing, and general and administrative expense,
as more fully described below. We do not anticipate that we will incur any significant
additional realignment charges during the remainder of 2003.

We have invested in several
meaningful technology initiatives including sales force automation, a unified ad delivery
platform and a unified publishing platform. These investments are expected to simplify our
operations and build a scalable infrastructure. We believe our realignment efforts and the
creation of a standardized, global technology platform have resulted in costs savings and
scalable systems that will enable us to grow more efficiently.

RESULTS OF OPERATIONS

# Revenues

Total Revenues

We earn revenues from sales of
advertising on our Internet network and in our print publications, fees earned when our
Internet network users click on an advertisement or text link to visit the websites of our
merchant partners (which we refer to as leads), licensing our Channel Services
product database, and subscriptions to our ChannelOnline product procurement service, as
well as other fee-based services.

Total revenues were $57.7 million,
$56.3 million, $172.7 million and $169.2 million for the three and nine months ended
September 30, 2003 and 2002, respectively. Total revenues increased for both the quarter
and year-to-date 2003 primarily due to an increase in Internet advertising revenue.
Publishing revenues have decreased for the three and nine months ended September 30, 2003
as compared to the same periods of 2002. We expect that the trend of higher Internet
revenues and lower publishing revenues may continue.

For the three and nine months ended
September 30, 2003, approximately $2.9 million and $8.8 million of our revenues were
derived from barter transactions compared to $3.0 million and $8.6 million for the three
and nine months ended September 30, 2002, whereby we delivered advertisements on our
Internet channels in exchange for advertisements on the Internet sites of other companies.
These revenues and marketing expenses were recognized at the fair value of the
advertisements delivered.

Internet Revenues

Internet revenues were $46.1 million
and $42.1 million and represented 80% and 75% of total revenues for the three months ended
September 30, 2003 and 2002, respectively. Internet revenues were $135.0 million and
$129.8 million and represented 78% and 77% of total revenues for the nine months ended
September 30, 2003 and 2002, respectively. The increase in revenues of $4.0 million for
the three months ended September 30, 2003 and of $5.2 million for the nine months ended
September 30, 2003 compared to the same periods of the prior year was primarily due to an
increase in revenues from online impression-based advertising partially offset by a
decline in lead revenue. We believe that our award-winning editorial content and buying
advice have helped to attract greater online brand advertising dollars as the overall
market for Internet advertising slowly improves. We completed the transition of our
shopping services to the new uniform publishing platform in the second quarter of 2003,
which has allowed us to turn our focus to product enhancement and innovation in the area
of shopping services.

Publishing Revenues

Publishing revenues were $11.6
million and $14.2 million and represented 20% and 25% of total revenues for the three
months ended September 30, 2003 and 2002, respectively. Publishing revenues were $37.7
million and $39.3 million and represented 22% and 23% of total revenues for the nine
months ended September 30, 2003 and 2002, respectively. The decrease in publishing
revenues was primarily due to lower custom publishing revenues than in the prior year
periods, as well as a decrease in advertising revenues from our Computer Shopper
publication.

# Segment Revenues and
Operating Expenses

For the three and nine months ended
September 30, 2003 as compared to the same periods of the prior year, revenues have
decreased for the U.S. Media segment, while they have increased for the International
Media and Channel Services segments. The decrease in revenues for U.S. Media is primarily
related to a decrease in print and lead revenue partially offset by an increase in
Internet advertising revenue. The increase in revenues for the International Media segment
is partially due to acquisitions, as well as growth in Internet advertising revenue and
exchange rate differences. The increase in revenues for Channel Services is due to an
increase in licensing.

For the three and nine months ended
September 30, 2003, all three business segments have decreased operating costs as a
percent of related revenues as compared to the same periods of prior year primarily as an
effect of headcount reductions and other cost saving measures.

# Cost of Revenues

Cost of revenues includes costs
associated with the production and delivery of our Internet channels, print publications
and creation of our product database and related technology. The principal elements of
cost of revenues for our operations are payroll and related expenses for the editorial,
production and technology staff, and costs for facilities.

Total cost of revenues was $33.2
million and $35.9 million for the three months ended September 30, 2003 and 2002,
representing approximately 58% and 64% of total revenues, respectively. Total cost of
revenues was $103.5 million and $110.2 million for the nine months ended September 30,
2003 and 2002, representing approximately 60% and 65% of total revenues, respectively. The
decrease in cost of revenues is primarily related to workforce reductions, and, in part,
from cost efficiencies gained through the implementation of our new uniform publishing
platform. Approximately $3.9 million and $659,000 of realignment costs were included in
cost of revenues for the nine months ended September 30, 2003 and 2002, respectively.

# Sales and Marketing

Sales and marketing expenses consist
primarily of payroll and related expenses, consulting fees and advertising expenses.

Sales and marketing expenses were
$16.2 million and $17.1 million for the three months ended September 30, 2003 and 2002,
representing 28% and 30% of total revenues for each of the periods, respectively. Sales
and marketing expenses were $51.3 million and $58.0 million for the nine months ended
September 30, 2003 and 2002, representing 30% and 34% of total revenues for each of the
periods, respectively. The decrease in both periods of 2003 as compared to 2002 was
primarily due to workforce reductions. Approximately $925,000 of realignment costs was
included in sales and marketing for the nine months ended September 30, 2003.
Approximately $339,000 of realignment costs were included in sales and marketing for the
nine months ended September 30, 2002.

# 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 $7.3 million and $6.8 million for the three months ended September 30, 2003 and 2002,
representing 13% and 12% of total revenues for each of the periods, respectively. General
and administrative expenses were $28.4 million and $35.5 million for the nine months ended
September 30, 2003 and 2002, representing 16% and 21% of total revenues for each of the
periods, respectively. The increase of approximately $500,000 for the three months ended
September 30, 2003 compared to the three months ended September 30, 2002 is primarily due
to approximately $400,000 of lease abandonment costs in the current year quarter whereas
there were no lease abandonment costs in the prior year quarter. The decrease of $7.1
million for the nine months ended September 30, 2003 over the same period of prior year
was due to higher realignment costs in the first two quarters of 2002, as well as the
impact of our workforce reductions taken in 2002 that resulted in lower general and
administrative expenses in year-to-date 2003. Approximately $5.0 million of realignment
costs were included in general and administrative for the nine months ended September 30,
2003. Approximately $9.7 million of realignment costs were included in general and
administrative for the nine months ended September 30, 2002. Included in these realignment
costs were lease abandonment expenses of $2.8 million for the nine months ended September
30, 2003 and $2.2 million for the nine months ended September 30, 2002.

# Depreciation

Depreciation expense was $3.8 million
and $6.7 million for the three months ended September 30, 2003 and 2002, and $13.3 million
and $19.7 million for the nine months ended September 30, 2003 and 2002, respectively. The
decrease in depreciation expense in the three and nine months ended September 30, 2003 is
primarily due to the impairment of certain fixed assets, which was recorded in the latter
half of 2002.

# Intangible Assets
Amortization

Intangible assets amortization
expense was $1.7 million and $8.9 million for the three months ended September 30, 2003
and 2002, respectively. Intangible assets amortization expense was $5.2 million and $33.2
million for the nine months ended September 30, 2003 and 2002, respectively. The decrease
in amortization expense in the three and nine months ended September 30, 2003 is due to
the impairment of intangible assets recorded in the third quarter of 2002, as well as the
change in estimated lives of certain intangible assets from three years to ten years
during the third quarter of 2002.

# Asset Impairment

We have performed our annual
evaluation of goodwill and intangible assets impairment as of August 31, 2003. We
determined that the carrying value of goodwill and other intangible assets for all our
reporting units did not exceed their implied fair values.

Given the declines in the equity
markets and in our stock price during the third quarter of 2002, the results of our annual
impairment test performed as of August 31, 2002 indicated the carrying value of goodwill
and other intangible assets for the U.S. Media reporting unit exceeded their implied fair
values, and an impairment charge of $239.1 million for goodwill and $40.5 million for
intangible assets of that reporting unit was recorded in the third quarter of 2002.
Additionally, certain other assets, including fixed assets, totaling $1.8 million were
deemed to be impaired and were written-off.

# Realized Gain on Sale of
Investments

We had a gain on sales of investments
of $376,000 and $2.8 million for the three and nine months ended September 30, 2002. There
were no such gains in the three and nine months ended September 30, 2003.

# Realized Loss on Sale or
Impairment of Investments

We had a loss on the sale of
investments of $26,000 and $99,000 for the three and nine months ended September 30, 2002.
We had a loss on impairment of public and private investments of $7.3 million and $15.5
million for the three and nine months ended September 30, 2002. There were no losses
recorded in the three and nine months ended September 30, 2003 on the sale or impairment
of investments.

# Income Taxes

We recorded an income tax benefit of
$20.3 million for the nine months ended September 30, 2002. No such tax benefit was
realized in 2003. Management believes that sufficient uncertainty exists regarding the
future realization of deferred tax assets and, accordingly, a full valuation allowance has
been provided against the gross deferred tax assets.

# Net Loss

We recorded a net loss of $5.8
million or $0.04 per basic and diluted share for the three months ended September 30, 2003
compared to a net loss of $307.2 million or $2.21 per basic and diluted share for the
three months ended September 30, 2002. The decrease in the current quarter net loss as
compared to the same period of the prior year was due primarily to an increase in revenues
and a decrease in operating costs of $294.5 million. The decrease was primarily due to an
asset impairment charge of $281.4 million in the prior year period. Additionally, $3.0
million of the decrease was due to a reduction in operating expenses, primarily from our
workforce reductions and lower depreciation and amortization expenses of $10.1 million,
offset by increased expenses resulting from acquisitions.

We recorded a net loss of $33.2
million or $0.24 per basic and diluted share for the nine months ended September 30, 2003
compared to a net loss of $364.1 million or $2.62 per basic and diluted share for the nine
months ended September 30, 2002. The decrease in the current year-to-date net loss as
compared to the same period of the prior year was due primarily to an increase in revenues
and a decrease in operating costs of $336.4 million. The decrease was primarily due to an
asset impairment of $281.4 million in the prior year period. Additionally, $20.6 million
of the decrease was due to a reduction in operating expenses primarily due to workforce
reductions and lower depreciation and amortization expenses of $34.4 million, offset by
increased expenses resulting from acquisitions. The decrease in the current year also
resulted from no net loss on investments in the current year as compared to a net loss on
the sale or impairment of investments of $15.6 million. The increased costs in the prior
year were offset by a tax benefit of $20.3 million.

RECENT ACCOUNTING
PROUNOUNCEMENTS

In November 2002, the FASB issued a
Consensus, which clarified certain issues within EITF 00-21, Revenue Arrangements
with Multiple Deliverables. The Consensus addresses how to allocate the revenue in
an arrangement involving multiple deliverables into separate units of accounting
consistent with the identified separate earnings processes of each deliverable for revenue
recognition purposes. The Issue also addresses how each element in a bundled sales
arrangement should be measured and allocated to the separate units of accounting in the
arrangement. The Consensus is effective prospectively for arrangements entered into in
fiscal periods beginning after June 15, 2003. The implementation of this Consensus has not had a
material effect on our operatiing results or financial position.

In January 2003, the FASB issued FASB
Interpretation (FIN) 46, Consolidation of Variable Interest Entities, an
interpretation of Accounting Research Bulletin 51, Consolidated Financial
Statements. FIN 46 addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. FIN 46 expands disclosure if an
enterprise consolidates a variable interest entity, and the Interpretation requires
disclosure for those companies that hold significant variable interests in a variable
interest entity but are not required to consolidate that interest. FIN 46 applies
immediately to variable interest entities created after January 31, 2003, and to variable
interest entities established after that date. FIN 46 applies for the first period ending
after December 15, 2003, to variable interest entities in which a company holds a variable
interest that it acquired before February 1, 2003. Disclosure required by FIN 46 must be
included in all financial statements issued after January 31, 2003. As of September 30,
2003, we do not have any variable interest entities, and therefore, the adoption of FIN 46
has not had a material impact on our consolidated financial statements.

In May 2003, the FASB issued
Statement of Financial Accounting Standards (SFAS) 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS 150
establishes standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires that an
issuer classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). Many of those instruments were previously classified as
equity. The provisions of SFAS 150 are effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. We are currently analyzing SFAS 150 to
determine its impact on our consolidated financial statements.

LIQUIDITY AND CAPITAL
RESOURCES

As of September 30, 2003, we had cash
and cash equivalents of $65.1 million compared to $47.2 million on December 31, 2002. In
addition, on September 30, 2003 we had investments in short and long-term marketable debt
securities of $53.4 million, as well as restricted cash of $19.2 million compared to $79.8
million in marketable debt securities and restricted cash of $18.1 million at December 31,
2002.

Net cash used in operating activities
of $6.4 million for the nine months ended September 30, 2003 included a net loss of $33.2
million and depreciation and amortization totaling $18.5 million. Also in 2003, CNET was
refunded approximately $8.6 million of recoverable taxes. Net cash used by operating
activities of $32.5 million for the nine months ended September 30, 2002 included a net
loss of $364.1 million, a noncash loss on impairment of assets of $281.4 million, noncash
losses on impairment of investments of $15.6 million and depreciation and amortization of
$52.9 million offset by the receipt of a refund related to taxes of $31.7 million. Net
cash provided by investing activities of $17.8 million for the nine months ended September
30, 2003 was primarily attributable to the sale of marketable debt securities offset by
purchases of marketable debt securities, acquisitions and capital expenditures. Net cash
provided by investing activities of $3.8 million for the nine months ended September 30,
2002 was primarily attributable to proceeds from the sale of marketable debt securities
offset by purchases of marketable debt securities, acquisitions and capital expenditures.

Cash provided by financing activities
of $6.5 million for the nine months ended September 30, 2003 was primarily due to the
issuance of common stock through the exercise of stock options and the employee stock
purchase plan and offset by payments on borrowings. Cash used in financing activities of
$33,000 for the nine months ended September 30, 2002 was primarily attributable to
payments on borrowings and debt retirement offset by proceeds from the issuance of common
stock through the exercise of options and the employee stock purchase plan.

Capital expenditures are expected to
be under $12.0 million for 2003. We have now completed our uniform publishing platform
project.

We believe that existing funds will
be sufficient to meet our anticipated cash needs for working capital and capital
expenditures for the next 12 months. We do not anticipate the need for additional funding
in the foreseeable future. Although we have not presently identified alternate or
additional sources of long-term capital, if our cash needs were to change, we may consider
raising additional capital through debt or equity offerings in the public or private
markets. As of September 30, 2003 we had obligations outstanding under notes payable
totaling $117.9 million. Notes payable included $113.7 million of 5% Convertible
Subordinated Notes, due March 2006. Such obligations were incurred to obtain proceeds for
general corporate purposes and to finance acquisitions.

CRITICAL ACCOUNTING
POLICIES AND ESTIMATES

Our discussion and analysis of our
financial condition and results of operations are based on our consolidated financial
statements. The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
a number of estimates and assumptions relating to the reporting of assets and liabilities,
revenues and expenses, and the disclosure of contingent assets and liabilities. On an
ongoing basis, we evaluate these estimates, including those related to bad debts,
investments, goodwill and intangible assets, lease abandonment, income taxes,
contingencies and litigation. We base our estimates on historical experience and on
various other assumptions we believe to be reasonable under the circumstances, which form
the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results could differ from those
estimates under different assumptions or conditions.

We believe the following critical
accounting policies affect our more significant judgments and estimates used in the
preparation of our consolidated financial statements.

# Revenue recognition

We recognize revenues once the
following criteria are met:

|o | Persuasive
evidence of an arrangement exists
|- | --------------------------------------------

|o | Delivery of our obligation to our customer has occurred
|- | -------------------------------------------------------

|o | The price to be charged to the buyer is fixed or determinable
|- | -------------------------------------------------------------

|o | Collectibility of the fees to be charged is reasonably assured
|- | --------------------------------------------------------------

We have several revenue streams. For
each revenue stream, evidence of the arrangement, delivery and pricing may be different.
For all revenue streams, we determine that collectibility is reasonably assured through a
standardized credit review to determine each customers credit worthiness.

We recognize revenues from the sale
of impression-based advertisements on our online network in the period in which the
advertisements are delivered. The arrangements are evidenced either by insertion order or
contract that stipulate the types of advertising to be delivered and pricing. Our
customers are billed based on a discounted list price with no amounts subject to refund.
When recognizing revenues, the discounts granted are applied to each type of advertisement
purchased based on the relative fair value of each element.

We refer to the fees charged to
merchants based on the number of users who click on an advertisement or text link to visit
websites of our merchant partners as leads. For leads, the arrangement is
evidenced by a contract that stipulates the lead fee. The fee becomes fixed and
determinable upon delivery of the lead. These revenues are recognized in the period in
which the leads are delivered to the merchant, and are therefore not subject to refund.

In certain arrangements, we sell
multiple deliverables to customers as part of a bundled arrangement. For these
arrangements, we allocate revenue to each deliverable based on the relative fair value of
each deliverable. Revenue is recognized in these arrangements as we deliver on our
obligation.

Advertising revenues from our print
and custom print publications are recognized in the month that the related publications
are sent to subscribers or become available at newsstands. Newsstand revenue from our
print publications is recognized when the publications are delivered to the newsstand at
which time a reserve is recorded against the value of the publications delivered based on
the number of magazines that we expect to be returned. To ensure these reserves are
adequate, we review the sell-through history of the publications on a monthly basis.

Revenues for subscriptions to our
Internet sites, print publications, product database and procurement services are
recognized on a straight-line basis over the term of the subscription. Upon execution of a
contract, billing and commencement of the services, we record deferred revenue for the fee
charged. This deferred revenue is recognized on a straight-line basis over the period of
the arrangement. The amounts under contract are not refundable after the customer has used
the service.

We trade advertising on our Internet
sites in exchange for advertisements on the Internet sites of other companies, referred to
as barter revenue. These revenues are recognized in the period in which the
advertisements are delivered based on the fair market value of the services delivered. We
determine the fair market value of the service delivered based upon amounts charged for
similar services in non-barter deals within the previous six-month period.

# Collectibility of
receivables

We maintain allowances for doubtful
accounts for estimated losses resulting from the inability of our customers to make
required payments. We base our allowances on periodic assessment of our customers
liquidity and financial condition through credit rating agencies reports, financial
statement reviews and historical collection trends. If the financial condition of our
customers were to deteriorate and thereby result in an inability to make payments,
additional allowances would be required.

# Goodwill and intangibles
impairment

Effective January 1, 2002 under SFAS
142, Goodwill and Other Intangible Assets. goodwill and intangible assets with
indefinite useful lives are to be tested for impairment at least annually. Intangible
assets with definite useful lives will continue to be amortized over their respective
estimated useful lives. Although the provisions of SFAS 142 were not effective in their
entirety until January 1, 2002, the goodwill acquired in business combinations which
occurred after September 30, 2001 fell under the condition of SFAS 142 requiring no
amortization of goodwill arising from transactions completed after June 30, 2001.
Therefore, goodwill arising from any such transactions has not been amortized.

Goodwill and intangible assets of a
reporting unit are reviewed for impairment if events or changes in circumstances indicate
that the carrying amount of its goodwill or intangible assets may not be recoverable.
Impairment of reporting unit goodwill is evaluated based on a comparison of the reporting
units carrying value to the implied fair value of the reporting unit. Conditions
that indicate that impairment of goodwill should be evaluated include a sustained decrease
in our market value or an adverse change in business climate. On an ongoing basis, we will
review goodwill for impairment on at least an annual basis with a valuation date of August
31 having been established as the date on which this annual review will take place.

# Lease abandonment

In 2001, we completed an evaluation
of our real estate requirements taking into account the workforce reductions that had
occurred, the completion of our new facility in San Francisco, and redundant facilities
elsewhere within the U.S and internationally. This evaluation resulted in the
consolidation or abandonment of several leased facilities. Due to the decline in the
commercial real estate markets in these locations, it was expected that the abandoned
leased facilities would be vacant for several quarters, and once they were subleased, it
would be at rates below current contractual requirements. We recorded a charge related to
the abandonment, based on the difference between the expected cash outflows and the
expected cash inflows related to these vacated properties. Weperiodically review
such factors as further declines in the commercial real estate markets, our ability to
terminate leases, or requirement to abandon additional properties, and based on these
reviews, we will adjust our leasehold abandonment reserve, as necessary. The amounts we
will ultimately realize could be materially different from the amounts assumed in arriving
at our estimate of the costs of the lease abandonment.

# Contingencies

We evaluate whether a liability must
be recorded for contingencies based on whether a liability is probable and estimable. Our
most significant contingencies are related to our ongoing mySimon litigation and our lease
guarantee for office space in New York City (as described in Item 3   Legal
Proceedings and Note 11 of Item 8  Financial Statements in our
Annual Report on Form 10-K, respectively). If the financial condition of any of the
sublessees or the primary lessee were to deteriorate and thereby result in an inability to
make their lease payments, we would be required to make additional lease payments under
the guarantee. In regards to the ongoing mySimon litigation, it is not possible to predict
the amount of damages attributable to corrective advertising that could be awarded in a
re-trial; however such amounts, if settled adversely to us, could be material to our
results of operations and financial condition.

SEASONALITY AND
CYCLICALITY

We believe that advertising sales on
the Internet, as well as in traditional media, fluctuate significantly with economic
cycles and during the calendar year, with spending being weighted towards the end of the
year. Advertising expenditures account for a majority of our revenues. Fluctuations in
advertising expenditures generally, or with respect to Internet-based advertising
specifically, could therefore have a material adverse effect on our business, financial
condition or operating results. We may also experience fluctuations during the calendar
year in connection with our lead-based shopping services, which are weighted towards the
end of the year and which may reflect trends in the retail industry.

SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This Quarterly Report on Form 10-Q
contains forward- looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements are any statements other than statements of
historical fact. Examples of forward-looking statements include projections of earnings,
revenues or other financial items, statements of the plans and objectives of management
for future operations, and statements concerning proposed new products and services, and
any statements of assumptions underlying any of the foregoing. In some cases, you can
identify forward-looking statements by the use of words such as may,
will, expects, should, believes,
plans, anticipates, estimates, predicts,
potential, or continue, and any other words of similar meaning.

Statements regarding our future
financial performance or results of operations, including expected revenue growth,
operating income growth, growth in leads, future expenses, future operating margins and
other future or expected performance are subject to the following risks: decreases in
advertising spending on the Internet, especially in the technology sector, or on our
properties in particular, which could be prompted by increased weakness in corporate or
consumer spending or other factors; the failure of existing advertisers to meet or renew
their advertising commitments; the loss of marketing revenue and users to our competitors,
especially in the highly-competitive filed of comparative shopping services; the inability
to develop or maintain a customer base with attractive product offerings, which could
adversely affect our revenues; a decline in revenues from our print publications as more
marketing spending shifts to the Internet; seasonal weakness in Internet usage during the
summer months; consolidation among technology customers who are advertisers on our
properties; the need for further cost reductions, which could increase severance costs and
negatively impact operating income or cause such results to differ from company guidance;
the weakening of the United States dollar, which could increase operating losses; the
acquisition of businesses or the launch of new lines of business, which could decrease our
cash position, increase operating expense and dilute operating margins; the risk of future
impairment of our assets or the need to increase our reserve attributable to abandoned
real estate; changes in domestic and international laws and regulations that could affect
our operations; system disruptions or security breaks to our systems, which could disrupt
our operations; and the general risks associated with our businesses.

Any shortfall in revenue or earnings
compared to analysts or investors expectations could cause, and has in the
past, caused an immediate and significant decline in the trading price of our common
stock. In addition, we may not learn of such shortfalls until late in the fiscal quarter,
which could result in an even more immediate and greater decline in the trading price of
our common stock.

For a more detailed discussion of
risks about our business, see CNET Networks, Inc. Annual Report on Form 10-K for the year
ended December 31, 2002 and subsequent Forms 8-K, as well as our definitive proxy
statement dated April 14, 2003 and other Securities and Exchange Commission filings,
including under the captions Risk Factors and Managements
Discussion and Analysis of Results of Operations.

Any or all of our forward-looking
statements in this report and in any other public statements we make may turn out to be
wrong. They can be affected by inaccurate assumptions we might make or by known or unknown
risks and uncertainties. Many factors mentioned in the discussion in this report will be
important in determining future results. Consequently, no forward-looking statement can be
guaranteed. Actual future results may vary materially. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new information,
future events or otherwise. You are advised, however, to consult any further disclosures
we make on related subjects in our reports to the Securities and Exchange Commission. Also
note that we provide cautionary discussion of risks, uncertainties and possibly inaccurate
assumptions relevant to our businesses. These are factors that we think could cause our
actual results to differ materially from expected and historical results. Other factors
besides those listed here could also adversely affect us. This discussion is provided as
permitted by the Private Securities Litigation Reform Act of 1995.

# ITEM 3. Quantitative and
Qualitative Disclosures about Market Risk

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

# Interest Rate Risk

Our exposure to market rate risk for
changes in interest rates relates primarily to our investment portfolio. We have not used
derivative financial instruments in our investment portfolio. We invest our excess cash in
debt instruments of the United States Government and its agencies, and in high-quality
corporate issuers that, by policy, limit the amount of credit exposure to any one issuer.
We protect and preserve our invested funds by limiting default, market and reinvestment
risk. Investments in both fixed rate and floating rate interest earning instruments carry
a degree of interest rate risk. Fixed rate securities may have their fair market value
adversely impacted due to a rise in interest rates, while floating rate securities may
produce less income than expected if interest rates fall. Due in part to these factors,
our future investment income may fall short of expectations due to changes in interest
rates, or we may suffer losses in principal if forced to sell securities that have
declined in market value due to changes in interest rates.

# Investment Risk

We invest in equity instruments of
privately held, information technology companies for business and strategic purposes.
These investments are included in other long-term assets and are accounted for under the
cost method, as we do not have the ability to exert significant influence over the
investee or their operations. For these non-quoted investments, our policy is to regularly
review the assumptions underlying the operating performance and cash flow forecasts in
assessing the carrying values. We identify and record impairment losses on investments
when events and circumstances indicate that such assets might be impaired.

# Foreign Currency Risk

Certain forecasted transactions and
assets are exposed to foreign currency risk. Because we have operations overseas, the
revenues and expenses associated with those operations are exposed to foreign currency
risk. Any weakening of the U.S. dollar against the currencies in which those operations
are conducted results in a decrease in our recorded revenues and an increase in our
expenses. We monitor our foreign currency exposures regularly to assess our risk and to
determine if we should hedge our currency positions.

# ITEM 4. Controls and Procedures

|(a) |  | Evaluation of disclosure controls and procedures. Our chief executive officer
                    and our chief financial officer, after evaluating the effectiveness of our
                    disclosure controls and procedures, as defined in Rules 13a-14(c)
                    and 15d-14(c) promulgated under the Securities Exchange Act of 1934, as of a
                    date (the Evaluation Date) within 90 days before the filing date of this
                    quarterly report, have concluded that as of the Evaluation Date our disclosure
                    controls and procedures were adequate and designed to ensure that material
                    information relating to us and our consolidated subsidiaries would be made known
                    to them by others within those entities.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Changes in internal controls. There were no significant changes in our internal
                    controls or, to our knowledge, in other factors that could significantly affect
                    our disclosure controls and procedures subsequent to the Evaluation Date.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# PART II. OTHER INFORMATION

# ITEM 1. Legal Proceedings.

Two shareholder class action lawsuits were
 filed in the United States District Court for the Southern District of New York on
August 16, 2001 and September 26, 2001, against Ziff-Davis, Eric Hippeau and Timothy
OBrien, and investment banks that were the underwriters of the public offering of
ZDNet series of Ziff-Davis stock (the ZDNet Offering). One of the complaints also names
CNET as a defendant, as successor in liability to Ziff-Davis. The complaints are similar
and allege violations of the Securities Act of 1933, and one of the complaints also
alleges violations of the Securities Exchange Act of 1934. The complaints allege the
receipt of excessive and undisclosed commissions by the underwriters in connection with
the allocation of shares of common stock to certain investors in the ZDNet Offering and
agreements by those investors to make additional purchases of stock in the aftermarket at
pre-determined prices. Plaintiffs allege that the Prospectus for the ZDNet Offering was
false and misleading and in violation of the securities laws because it did not disclose
the arrangements. The action seeks damages in an unspecified amount. The action is being
coordinated with over 300 nearly identical actions filed against other companies and their
underwriters. No date has been set for any responses to the complaints. On February 19,
2003, the Court granted CNETs motion to dismiss the Section 10(b) claim with leave
to replead, and denied the motion to dismiss the Section 11 claim.

The majority of the issuers,
including CNET, and their insurers have entered into a Memorandum of Understanding with
the plaintiffs to dismiss the issuers from the litigation in exchange for a
back-stop guarantee from the issuers and their insurers pursuant to which they
will pay the plaintiffs any shortfall between $1 billion and the amounts recovered in the
ongoing litigation against the underwriters. The parties are currently negotiating
definitive settlement documents, which are subject to the approval of the court. Based on
its insurance coverage and the number of issuers participating in the settlement, if the
settlement is finalized CNET does not believe that it will face any material liability as
a result of the litigation. If the settlement does not occur, CNET intends to seek
indemnification from the underwriters, though it is not possible to predict whether the
litigation will have a material adverse effect on CNETs financial condition or
results of operations.

Also, see Note 7 to our financial
statements for the nine months ended September 30, 2003.

# ITEM 2. Changes in Securities and Use of Proceeds.  None.

# ITEM 3. Defaults Upon Senior Securities.   None.

# ITEM 4. Submission of Matters to a Vote of Security Holders..  None.

# ITEM 5. Other Information.  None.

# ITEM 6. Exhibits and Reports on Form 8-K.

|(a) |  | Exhibits.
|--- |  | ---------

| |  |  |  | 31.1 | Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-15(e)
and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated
August 1, 2003 | 
| |  |  |  | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

| |  |  |  | 31.2 | Certificate of Chief Financial Officer pursuant Securities Exchange Act Rules 13a-15(e)
and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated
August 1, 2003 | 
| |  |  |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

| |  |  |  | 32.1 | Certificate of Chief Executive Officer pursuant to section 18 U.S.C. Section 1350, dated August 1, 2003 | 
| |  |  |  | ---- | ------------------------------------------------------------------------------------------------------- | 

| |  |  |  | 32.2 | Certificate of Chief Financial Officer pursuant to section 18 U.S.C. Section 1350, dated August 1, 2003 | 
| |  |  |  | ---- | ------------------------------------------------------------------------------------------------------- | 

|(b) |  | Reports on Form 8-K.
|--- |  | --------------------

|(1) |  | Current Report on Form 8-K dated July 22, 2003, Item 9  Regulation
               FD Disclosure, which reported CNETs financial results for the three
               months ended June 30, 2003.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 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 Networks, Inc.(Registrant)/S/ Douglas N. Woodrum
Douglas N. WoodrumExecutive Vice President,Chief Financial Officer
| |  | --------------------------------------------------------------------------------------------------------------------------------------

Dated: November 10, 2003

# EXHIBIT INDEX

# Exhibit Number                     Description

| |  |  | 31.1 |  | Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-15(e)
and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated
August 1, 2003
| |  |  | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | 31.2 |  | Certificate of Chief Financial Officer pursuant Securities Exchange Act Rules 13a-15(e)
and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated
August 1, 2003
| |  |  | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | 32.1 |  | Certificate of Chief Executive Officer pursuant to section 18 U.S.C. Section 1350, dated August 1, 2003
| |  |  | ---- |  | -------------------------------------------------------------------------------------------------------

| |  |  | 32.2 |  | Certificate of Chief Financial Officer pursuant to section 18 U.S.C. Section 1350, dated August 1, 2003
| |  |  | ---- |  | -------------------------------------------------------------------------------------------------------