CNET Quantifies and Explains its Decline in Page Views

Oct.24.06 | About: ChinaNet Online (CNET)

CNET Networks Inc. (NASDAQ:CNET) has been the subject of a fierce debate. Eric Savitz quoted a research note from Jefferies & Co. analyst Youssef Squali claiming that comScore data suggested that CNET's page views were down 50% year-over-year. In the response below from CNET's Q3 conference call, CEO Neil Ashe puts a different number on -- and provides an explanation for -- the decline in page views:

During the third quarter, our business remained healthy, traffic is consistent and we’ve added new brands to our portfolio while continuing to broaden our set of advertisers to help take advantage of the longer-term opportunities that we see in the marketplace. We averaged 125 million monthly unique users turning approximately 86 million pages per day, an increase of 13% in users and a decrease of 13% in pages. If you exclude Webshots, we saw 15% increase in pages.

While page views are an important metric, they are not the sole determinant of either our user interaction or the quality of our user experience. In some cases, we purposely decided to streamline navigation to create better user views and reduce the number of page views per user.

A point to consider: By providing full articles on a single page, or often multiple articles on a single page, blogs are pressuring for-profit Web content sites to improve their usability, or "streamline their navigation" in the words of CNET. The user experience of having to click five times to read a single article so the site can display more ads is frankly lousy.

At the same time, as blogs become businesses, they're forced to increase the number of page views and ads to raise revenue. Look at PaidContent's controversial redesign, for example.

The net result? Convergence in the middle. The leading blogs carry more ads, and the large Web content businesses are forced to reduce the number of page views per article.

The stock impact? Probably negative for companies like CNET, as we see from the defensive comments in this call.

The full CNET conference call transcript is really worth reading for anyone following this debate or the stock itself.