BusinessWeek raises questions about CNET

Feb. 9.05 | About: ChinaNet Online (CNET)

BusinessWeek's The Dilemma of CNET's Success is a thought-provoking article about the online ad market and CNET by Sarah Lacy. The key argument:

In 2004, tech-site ad rates jumped 46%, vs. no more than 4% for finance or sports sites. So CNET took in a lot of money from core advertisers like Microsoft, Sun Microsystems, and Hewlett-Packard, but to maintain its growth, it needs to land a broader variety of advertisers. With ad prices so high, "for a retailer or entertainment company they're cost-prohibitive," says Jeff Lanctot, vice-president for media at Avenue A/Razorfish, the largest buyer of online ads in the U.S.

Quick comment: What if the tech market weakens this year? Then CNET will be hit harder than other online publishers. And perhaps Carly Fiorina's ejection today suggests that the broad tech market is in for some bad news...

CNET chart below.

Full disclosure: at the time of writing I'm short CNET.