CNet Inc is set disappoint Wall Street for the second quarter in a row with a profit warning due to lower-than-expected advertising revenues and development costs. The company forecast third quarter net losses of between $6.2m and $6.4m, or about 45 to 47 cents per share. The Street had expected losses of about 33 cents per share. The San Francisco web and television-based technology news service also said revenues would be between $8.4m and $8.7m – some $1m below most expectations. In the second quarter the company posted net loses without a gain of $5.0m, or 37 cents a share when the expectation was for 10 cents less than that. The reason this time, according to the company, is weak advertising revenue and the high costs of developing new sites and services, the main culprit being computers.com, an online guide for PC buyers. What will be worth looking out for when the company finally reports in full is CNet’s balance sheet, and in particular its cash line. At the end of the second quarter it had just $5.0m in the bank, down from $20.2m six months earlier. It will be boosted by Intel Corp’s increase in its stake during the third quarter to 6%, which netted the company $5.3m, but it appears to be burning cash at an alarming rate, and this warning does nothing to dispel that fear. In the third quarter last year CNet reported net losses of $4.7m, or 38 cents a share on revenues of $4.4m.
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