CNET's blog empire is too late

CNET Networks, Inc. (NASDAQ: CNET) is launching a group of blogs in the hope of expanding its news coverage and appeal to a broader base. The company's stock did not move and is down today. In early 2006, the shares traded for almost $16. They now rarely trade above $9.

CNET would seem to be a good business. With the immense need for information its tech news service, download center, and reviews of new devices would seem to be critical to the needs of executives following in the industry and consumer electronics buyers.

But, as some observers have pointed out, online readers turn to blogs like Gigaom and TechCruch for the kinds of information CNET used to have. The blogs are often faster at breaking news and have more of an edge in reviewing new electronics. This may be because the newer websites do not rely on mainstream advertisers for most of their revenue.

And, the blogs have gotten big, very big. A recent look at Alexa rankings show CNET as the 153 most visited web destination. But, Engadget is No. 641 and TechCrunch is No. 644. These blogs do not have to support the large editorial and infrastructure costs that CNET does.

It is too late for CNET to get into the tech blog business. It is already commanded by independent operators with large audiences and rock-bottom costs. CNET's only open tactic is down the M&A road and perhaps the industry will see some consolidation.