The one-time digital underdog had shown them. CNET’s News.com, ZDNet, Reviews, and Download.com have drawn legions of digerati. Industry cred has landed CNET's content inside The New York Times, Best Buy, and Costco. Over the past decade, CNET has established itself as the voice of an industry. Better yet, the digital upstart emerged from the dot-com demise not only respected but also profitable.

Now that hard-won respect is in jeopardy. Last Wednesday, CEO Shelby Bonnie resigned over a stock options probe. Also out were its general counsel, the human relations chief, and a former CFO. The same day, CNET warned sales would fall short of expectations—as its internet page views plummeted 55 percent. The combination of missteps has raised serious questions about CNET's stability. CNET, analysts say, is ripe for acquisition. And big media may be waiting in the wings.

What's at stake is premium Internet real estate. A media company that gets CNET could make up for a lot of lost time. CNET Networks operates CNET.com, MP3.com, mySimon.com, Gamespot, Download.com, TV.com, TechRepublic, ZDNet.com, News.com, Webshots, and Search.com, among others. CNET is “widely coveted by traditional media companies,” Stifel Nicolaus analyst Kit Spring says.

Traditional media is buying. In 2004, Dow Jones bought MarketWatch for $519 million. In 2005, The New York Times Co. bought About.com for $410 million, and InterActiveCorp bought Ask Jeeves for $1.85 billion.

There’s a long list of potential CNET suitors. Internet media is hot. Last week Google agreed to buy profitless video-sharing site YouTube for $1.65 billion. By contrast, CNET could bring a would-be Internet titan both page views and cash flow. “Media titans like Rupert Murdoch and Sumner Redstone are empire builders, and they’re way behind in the fastest growing part of media, which is the Internet,” Mr. Spring said. “We think now is a good time to sell.”

And CNET, though troubled, may still present an attractive buying opportunity. Mr. Bonnie has been reluctant to sell the company in the past. "We believe the conclusion of the investigation and the CEO's resignation could enable a potential acquisition from a large media player interested in an online foothold," Jefferies & Co. analyst Youssef Squali wrote in a research note.

CNET was reported to be shopping itself around last year, according to the New York Post. Citing unnamed sources, the report said that Viacom, InterActiveCorp, Time Warner, and Yahoo were among those in talks with the San Francisco company.

CNET could use a strong parent now. Mr. Bonnie gave Wall Street confidence. He was at the helm of the company for its July 2000 purchase of rival Ziff-Davis for $1.6 billion and saw it through the dot-com bust. The soft-spoken founder was a steadying influence, and his departure in the wake of the options probe leaves a hole of uncertainty.

A CNET representative declined to comment on the company resignations.

The CNET exec cleanout should not be underestimated either. The loss of company veterans General Counsel Sharon Le Duy, HR chief Heather McGaughey, and former CFO Doug Woodrum will cause distractions. CNET's accounting probe—along with its exec fallout—has been such a distraction to its business it could affect the company's operational execution, analysts say.      

Sales are already a problem. As its top managers walked, CNET announced its third-quarter and full-year sales could come up short. The company blamed the weakness on technology and video game companies, citing such factors as the delays in Windows Vista and video game consoles. CNET ad revenue is often dependent on such factors. But CNET has always had massive traffic to sell ads against.

Now traffic has plummeted. A comScore report says that CNET Networks’ year-to-year page views are down 55 percent in the third quarter. CNET.com is down 54 percent; ZDNet is down 30 percent; Gamespot is down 21 percent. Webshots page views declined a massive 69 percent in the third quarter. That was “driven by increased competition from social networking sites such as Facebook,” notes Mr. Squali.

CNET did not return calls for comment on the comScore numbers.

ComScore data on CNET page views is worrisome. CNET, while still ranked No. 1 in its category of technology information, dropped to 616 million page views in September compared with 1.3 billion in the same period last year."CNET seems to be getting hammered on all sides, with tech blogs eating up many page views that would otherwise go to them, and new social networking and other sites eating into Webshots and other CNET properties," tech blogger Michael Arrington wrote recently on TechCrunch.

But is CNET, with its myriad problems, still a buying opportunity? “The environment for acquisitions might not be that hot next year,” says Mr. Spring. “Now is the time.” And there are barriers to buying CNET. For one, Mr. Bonnie owns 10.7 million shares of stock and is still a director with a substantial vote. New CEO Neil Ashe was seen as Mr. Bonnie’s heir apparent and may very well opt to stay independent. And CNET has been through rough times before. Besides, CNET’s market cap of $1.4 billion is seen as prohibitively high for potential buyers.Less worrisome, its unique visitors only dropped 3 percent to 28.7 million from 29.5 million.By contrast, MySpace had 55.8 million unique visitors in September, according to comScore. News Corp. snapped up MySpace last year for $580 million in what now appears a bargain.

Unless, of course, you consider the $1.65 billion Google agreed to hand over for YouTube.

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