CBS to buy CNET: Weird deal of the year

CBS (NYSE: CBS), a television network, is buying CNET (NASDAQ: CNET), a collection of technology websites. Other than the fact that the deal makes no sense, it is perfect.

CBS is even paying a premium for the privilege of owning a company that no one else seemed to want. Jana Partners and other activist investors have been pushing for a sale or break-up of CNET, but the news must be beyond the wildest dreams. CNET is up almost 50% on word that CBS will pay $11.50 for a stock which was trading at under $8.

Management's case for the buy-out is that "The acquisition will make CBS one of the 10 most popular Internet companies in the United States, with a combined 54 million unique users per month, and approximately 200 million users worldwide," according to the company.

However, CNET has had trouble making money on its large audience of internet users, to some extent because those readers are spending time with online tech blogs. The firm does have a large software download business, but quarterly statements do not indicate that it is a large or profitable business.

Perhaps no one will ever understand the CBS motives. The company is controlled by Sumner Redstone, who has done odd things before.

Douglas A. McIntyre is an editor at 247wallst.com.