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Mergers and acquisitions: CBS - Essay Example

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The media giant is among the three largest broadcasting entities in the United States. Headquartered in New York, the company boasts of a number of television stations and radio stations. The television broadcasting was…
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CBS Acquires CNET Introduction CBS is an acronym for Columbia Broadcasting Corporation. The media giant is among the three largest broadcasting entities in the United States. Headquartered in New York, the company boasts of a number of television stations and radio stations. The television broadcasting was started in 1941 and runs until present while the radio frequency broadcasting was started in 1927 and runs until today (The New York Times). Currently, the company runs thirty television broadcast stations, and 117 radio stations spread across twenty-six states in the USA. This shows how expansive the company is globally. This begs the question whether they have internet services that have in the recent past been the next frontier for businesses. Since the internet has grown so much in the recent past, there was need for CBS to expand beyond the United States. The best way of expanding beyond the US will be through the internet; hence, acquiring CNET.
CNET is an internet based American website that streams media information via the web. The website publishes a number of reviews and websites, blogs videos. The content provided on the website is inspired by what the new age consumers’ demand. The website also has expanded its services to include region-specific content and editions that are language specific. The editions include UK, Australia, China French, German and even Japanese. The rich content and expansive reach of readership are what CBS needed to catapult its position to include internet in its bouquet of services. The acquisition was valued at US $1.8 billion (Merissa&
Delaney).
The acquisition that was made in 2008 brought significant cost and revenue synergies. The company initially only had its content from television and radio network only available in the United States. This meant that the content produced by the network could only be transmitted to the people in the US. This limited their reach and to the extent of the revenues received from advertisement, which is the major revenue earner for any media company. There was an anticipated boom in graphical display advertising on an online platform; an opportunity that CBS intended to seize. Building a new website could have been costly and expensive since it takes time for website to get traffic. The acquisition provided a very important platform from which CBS could now provide their content in entertainment, news, and sports without duplicating the effort resulting in cost savings (Merissa &Delaney).
The acquisition was successful because the company could now stream its services beyond the United States without establishing a brick and mortar presence in other countries. Since internet reach has gone global in the recent past, it is possible to have the reach from just an office in a single spot. The acquisition was successful because CNET had already established a competitive online presence that was vibrant and just needed to gain competitive advantage and make it the one-stop spot for entertainment, news and sports. In a world that is digital, all systems are going online. The fact that CBS managed to identify this trend and made the acquisition is a success in its right.
References
Marr, Merissa, and Kevin J. Delaney. "CBS to Acquire CNET for $1.8 Billion." WSJ. N.p., 16 May 2008. Web. 18 June 2015. http://www.wsj.com/articles/SB121085061416295095
The New York Times. "CBS Corporation News." Times Topics - The New York Times. N.p., n.d. Web. 18 June 2015. http://topics.nytimes.com/top/news/business/companies/cbs_corporation/index.html Read More
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