But Ziff-Davis recently sold those businesses in order to focus on its network of Web sites, which it spun off separately as ZDNet in March 1999. ZDNet still has a licensing agreement to receive content for its Web sites from the old Ziff-Davis magazines, but analysts questioned whether that agreement might be affected by the deal with CNet. The companies claim that their combined audience on the Web will number 16.6 million monthly users. If the numbers hold, that audience would make the new company the eighth-largest Internet property, CNet says, citing figures from the research firm Media Metrix. Both companies now turn a profit, rare in the Internet business.
Analysts are bullish on the deal.
Pankopf says CNet's strength in the consumer market complements ZDNet's strength in the business market. CNet is stronger in selling technology products, while ZDNet has good editorial content, she says. The Ziff-Davis practice of zigging in and out of markets raises valuation questions. Matt Finick of Thomas Weisel Partners has recommended CNet partly because it has, he says, transcended the publishing revenue model based on advertising revenue and is making more from licensing its databases, which he says is a higher-margin business. Ziff-Davis' assets are of a less certain quality.