CNet is target of activist investor group

Like just about everyone else, before I buy any kind of tech device, I always do some research online. One of the best sites for reviews is CNet, which goes to great lengths to analyze and compare everything from digital cameras and MP3 players to laptops and audio speakers. Despite the great service, though, the company has had a lot of trouble staying in the black.

Today, DealBook is reporting that Jana Partners is leading a consortium which has taken major stake in CNet Networks (NASDAQ: CNET). The consortium is trying to replace CNet's directors and take control of the company's board. Jana Partners is a $5 billion hedge fund founded by Wharton grad Barry Rosenstein in 2001. The consortium focused on CNet includes Sandell Asset Management and Spark Capital, a venture capital firm.

CNet has performed poorly over the last several years, and is currently in the red. Despite the impressive growth of online advertising, especially at tech-related sites, CNet has experienced falling revenues. One problem may be that it is simply too big. The 15-year old company has over 2,500 employees, and finds itself competing with similar sites that have only a few dozen people behind the scenes. No doubt that will be something the activists focus on as they seek control of the company.