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February 3, 1999

CNET PAYS UP TO CREATE WEB MARKET FOR WHITE BOXES

By CBR Staff Writer

Internet media company CNet Inc said Wednesday that it has acquired NetVentures Inc in a stock swap valued at $12.1m, based on Tuesday’s closing price. Founded in 1996, NetVentures owns and operates an online storefront creation system called ShopBuilder. Under terms of the agreement CNet will issue 100,000 shares for all the outstanding shares of NetVentures. The deal quickly became a much sweeter one for NetVentures, however, as CNet shares jumped $24, or nearly 20%, to close at $144.50 – making the transaction worth closer to $14.5m. CNet says the deal will allow it to enable small to mid-size resellers of unbranded computer systems, or white box PCs, to build web storefronts and use CNet’s online sales channel Shopper.com to sell the machines. The service is expected to roll out in the second quarter. CNet says the move will effectively create the first marketplace for white boxes – which are said to account for 30% of the $75bn US PC market – on the internet. As part of the acquisition, which will be accounted for as a tax-free pooling of interests, NetVentures co-founders James Nicholson and Ilan Reuben will join CNET as employees.

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