• Early April 2007: CBS management visited CNET's offices in San Francisco, met with members of CNET's management team, including Neil Ashe, Chief Executive Officer of CNET. No specific proposals resulted.
• December 2007: Mr. Moonves contacted Jarl Mohn, Chairman of the CNET Board.
• January 2008: Mr. Moonves contacted Mr. Ashe.
• January 30: the CBS Board reviewed CNET.On March 18, 2008, Moonves and Reynolds visited CNET in San Francisco.
• March 31: the CBS Board authorized CBS' management to pursue a business combination transaction with CNET.
• April 2: Reynolds called Ashe. Ashe indicated that the CNET Board might consider a proposal if properly valued. CBS was willing to consider an all-cash transaction at a 40% premium.
• April 9: Mr. Ashe called Mr. Reynolds. The CNET Board considered the CBS price indication to be too low. Reynolds reiterated that CBS' price indication did not reflect any value that might be uncovered in due diligence.
• April 24: Moonves contacted Mr. Ashe to continue discussions.
• May 1: Mr. Reynolds called Mr. Ashe reiterated a price of $10.50 per share and informed Mr. Ashe that CBS had acquired Shares.
• May 2: Mr. Ashe reiterated that CBS' proposed price did not reflect the value of CNET's agreement with Yahoo! Inc. and certain cost cutting efforts. Morgan Stanley called Reynolds and encouraged CBS to present terms in writing.
• May 5: CBS delivered a letter, which specified the terms at $10.75 per Share a 42% premium. Morgan Stanley called Reynolds and noted that CBS' price indication was too low.
• May 7: CBS and CNET entered into a confidentiality agreement allowing CBS to conduct a review of CNET.
• May 8: CBS' legal counsel commenced review of non-public information regarding CNET.
• May 10: Reynolds informed Morgan Stanley CBS was to increase to $11.25 per Share. Morgan Stanleyindicated that CBS would need to increase the purchase price.
• May 11: Mr. Reynolds indicated to the Morgan Stanley representative that CBS was willing to increase its proposed price to $11.50 per Share.
• May 12: Mr. Reynolds noted that CBS' proposed price of $11.50 per Share was CBS' best and final price, but that CBS could agree to a reduced termination fee.
• On May 14 and into the following early morning, CBS and CNET completed final negotiations.

Sites like Engadget and Gizmodo (the latter published, like Valleywag, by Gawker Media) seemed too small to matter when they launched; by the time CNET got around to trying to compete with the tech blogs, it was too late. In the meantime, having deluded themselves into thinking they had conquered tech publishing, CNET managers pursued off-brand expansions into baby and food sites, areas in which it had no particular experience or other value to add.

CNET was at its sharpest when dueling with rival ZDNet, the online publisher of once-formidable tech publisher Ziff-Davis. Since it merged with ZDNet and became a conglomerate of online brands — hence the "CNET Networks" name — it has devolved into soft, bureaucratic mediocrity, a trend only accelerated by the departure of cofounder Shelby Bonnie in 2006. If buying CNET was Smith's one big idea, we'll gladly lend him another: Shuffle current CNET CEO Neil Ashe out the door as soon as possible.

(Image by Andrew Mager)

I don't buy the theory promulgated by self-interested rivals that blogs are nibbling away at CNET; it has always had rivals, and its sites' traffic has continued to grow as the general interest in gadgetry rises.

But if you look at CNET's income statement, the story is simple: revenues are nearly flat, while costs have soared. For that, the most likely culprit is CNET's diversion into content areas like food and babies, in which it has no expertise and its advertisers have no interest. Trying to expand horizontally has been a fruitless distraction. Rolling up smaller blogs to expand the inventory its salespeople can sell — that would actually make sense. CNET's deal with Yahoo to license its tech content and cooperate on ad sales is a positive sign of management focus, but it smacks of being too little, too late. Selling everything outside CNET's core expertise and spending the proceeds on a rollup strategy would be the right move, but I'm not sure CNET CEO Neil Ashe is brash enough to do that.

The memo is as transparent as it is salient. Simply, Neil Ashe states that CNET needs to embrace change by exploiting their first-mover advantage to drive efficiencies by conceptualizing and architecting brand-centric, seamless, end-to-end, best-of-breed solutions for forward-leaning virtual communities.

The new is old. Agile is the new New. We are at the tipping point. This will change everything. It's about dynamic aggregation, not static accumulation. High impact/low adhesion. Vertically integrated solutions for a flat world. Long tail, meet fat snout. You need someone who gets it: Splog is an aggregate noun. Roll your own roll-your-own. Social is the new push. Tag the globe, then globalize the tags. Microformats for metablogging. Enable rich-client widgets for on-demand streams. Above all, incentivize semantic synergies and you'll never have to worry about monetizing sticky eyeballs — they'll be glued to your viral paradigm!

At first it looked like Bonnie (pictured) had made the decision himself — for instance, he stays on as a director, which would be odd if he were fired for misconduct. But when the chief counsel and human resources head were fired too, it became clear someone — maybe those leading the internal investigation — forced Bonnie to take one for the team.

Now CNET named Neil Ashe as Bonnie's replacement. Ashe was key in bringing in CNET acquisitions like Webshots, TV.com, and mp3.com. Some inside CNET say Bonnie had long planned for Ashe to succeed him, but president and COO Barry Briggs (who came with the acquisition of ZDNet) will feel stung for being passed over. Briggs is publishing royalty, son of a partner at former ZDNet parent Ziff-Davis Publishing.

Cnet loses its heart and soul executive [SF Chronicle; photo by JD Lasica]