CNET Networks (CNET) has entered into a definitive agreement to acquire the assets of PCHome, in cooperation with Chinese subsidiaries and affiliates. PCHome is a personal technology and commerce Web site serving all of China with headquarters in Shanghai.
The transaction, which is effective immediately, totals $11 million in cash payments, with $5 million due at closing and the remaining $6 million due in the fourth quarter of 2005. Under the terms of the agreement, the founders of PCHome will retain a 10 percent minority interest.
CNET Networks does not expect the PCHome transaction to materially impact financials in 2005.
In related moves last year, CNET Networks acquired ZOL and Fengniao, two leading personal technology Web sites based in Beijing. Combined, these acquisitions position CNET Networks as a leading provider of personal technology content in two of the largest and fastest growing markets in China. In addition, this transaction significantly extends CNET Networks' online audience reach in China. With minimal audience duplication, PCHome adds a user base that is comparable to that of ZOL and Fengniao combined.
These three personal technology acquisitions are part of CNET Networks' strategy to expand its online presence in China ahead of the expected growth in online advertising. In addition to these Web sites, the company operates eight print publications in China with titles spanning personal technology, games, business technology and the IT channel categories, and has had a significant presence in China for over ten years.
"We are excited to add another top personal technology property to our growing portfolio of brands in China," said Shelby Bonnie, chairman and CEO of CNET Networks, Inc. "With leadership positions in the two key markets in China, Shanghai and Beijing, we are well positioned to take advantage of the country's tremendous growth potential. We look forward to further developing these sites, introducing China's online consumers to the cutting-edge interactive user experience that has become synonymous with CNET Networks."
