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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: MaryinRed who wrote (4657)	2/8/1999 9:28:00 PM
From: Vendit™	Respond to of 41369

Thinking strongly about just that..... CNet, AOL in shares-for-space swap? Source says CNet will supplant CMPNet -- and could give AOL ownership to pay for privilege. CNet Inc. has reached an arrangement with America Online Inc. that will give it prominent placement on AOL, according to a source familiar with the matter. What's more, the deal may add AOL to the list of the CNet's financial backers, if, as observers believe, AOL (NYSE:AOL) plans to accept a stake in CNet (Nasdaq:CNET) as payment for the placement deal. The same source said CNet would replace CMPNet, an arm of CMP Media Inc. (TRADES:CMPX) of Manhasset, N.Y., as the main technology information tenant on AOL's computing channel. CNet could also take the place of online computer equipment retailer Cyberian Outpost Inc. (Nasdaq:COOL) in the shopping channel. Cyberian Outpost's contract with AOL expired in December, according to AOL. An AOL spokesperson said it is the company's policy not to comment on rumors or speculation. CNet did not respond to requests for comment in time for this article. CNet is a direct competitor of ZDNet, which operates ZDNN. The deal will be a marketing boost for CNet. Observers say a placement on AOL, which has more than 15 million users, could legitimize CNet's recent moves into e-commerce. "It's definitely a plus for CNet," said Matt Finick, research associate with Thomas Weisel Partners, a San Francisco securities firm. "Over the last six to nine months, they've ramped their e-commerce business, in selling leads for customers buying hardware. This is a big boost for that e-commerce model." More consolidation If AOL does take a stake in CNet, it would mark another step -- albeit a relatively small one -- in the trend toward consolidation beginning to take root on the Web. Internet portals, services that offer users an all-in-one starting gate to the Internet, have been leading the way. AOL, for example, has recently purchased Netscape Communications Corp. (Nasdaq:NSCP), with its Netcenter portal and Navigator browser, for $4.2 billion, and buying Mirabilis Ltd. (now ICQ) for $287 million. "What we're seeing here is the continued rolling up and aggregation of best-of-breed content and Internet users," said analyst Jae Kim of Paul Kagan Associates. To use a TV metaphor, he said, "the preview season is over, and ... with these acquisitions, the premier portals are positioning themselves to create a must-see TV lineup." The source said CNet is downplaying the AOL deal's possible impact on CNet's relationship with NBC. In June, NBC bought 19 percent of Snap.com, a portal launched by CNet, and at the same time took 4.99 percent of CNet. Symbolic investment But that share is fairly small, analysts point out. Paul Allen's Vulcan Ventures has a 21 percent stake in CNet and Intel and Amerindo Investment Advisors both have shares of less than five percent in the company. Observers expect that any AOL stake would also be too small to make much difference to CNet. In any case, industry analysts generally said CNet doesn't need anything more than a symbolic investment. "The Web networks, like AOL and Yahoo! could someday consider acquiring CNet, but CNet has no compelling strategic reason to sell," wrote analyst Keith Benjamin of BancBoston Robertson Stephens, in a Friday newsletter. "CNet has critical mass as an independent company, in our view."