All of CNet Inc’s actions in the quarter just ended smack of a company worried about running out of money, as its balance sheet proved yesterday. The San Franciscan, famous for its web-based news service managed to report a profit in the second quarter due to its sale of its stake in E! Online web site to E! Entertainment Television for $10m plus a $3.2m note and further unspecified payments for consulting services and other technology licenses. CNet also got Intel Corp to up its stake by purchasing an additional $5.3m of stock, taking it to 6%, although that transaction will not close until this week. CNet needs the money. Its balance sheet says its high burn rate has reduced the cash line from $20.2m on December 31 last year to $5.0m on June 30; another quarter at that rate and it’s all gone. So more cash- raising ventures can be expected this quarter. Meanwhile, the company reported second quarter net profits of $5.0m, after the $10.0m gain, against losses of $4.3m last time, on revenues that rose 216.1% to $8.3m. Without the gain, net losses would have been $5.0m, or $0.37 per share. Wall Street had been looking for $0.27 per share, and so is likely to be disappointed. The internet made up $6.6m of the revenues with the rest – just over 20% – coming from the company’s four weekly television shows, and ever-increasing source of revenues. So what is regarded by many as the pioneer of web-based information services is becoming more and more reliant on that old-fashioned cathode-ray-tube-in-a-box. Net losses for the six months were $7.9m, down from $8.0m losses last time, on revenues that were up to $14.6m, from $4.3m the previous year.
