The US-based CNETNetworks acquisition of a small Swiss dotcom company has turned out to be a success story for both firms.This content was published on January 24, 2003 - 10:28
CNET purchase of GDT SA - acquired for SFR75 million ($55 million) in 1999 - from ten to 350 employees.
GDT SA (now called CNET Channel Services) has managed to grow throughout the tech slump and had an estimated SFr 24 million in revenues last year.
CNET was a television production company before it became an Internet pioneer. Its tech-oriented news site was one of the first destinations at a time when the Internet was almost bereft of content.
The company's computing and Internet news were so popular that established information technology magazines refused its ads, fearing CNETs online advantage.
Although CNET was making revenues, it was not turning a profit. As a result, a policy of diversification through acquisitions was implemented in the late nineties.
GDT's founders are happy with the progress of the firm under its new ownership. "We would never have been able to grow to this level this quickly without having been acquired by CNET," says Albert de Heer, president of CNET Channel and co-founder of GDT SA.
Group-wide revenues were an estimated $220 million last year. CNETChannel's contribution to that income hovers between five and seven per cent. "CNET Channel has performed admirably over the past several years, reflecting continued growth of customers in Europe and the United States, including key distributors such as Tech Data, Ingram Micro and Synnex," says Robert Borchert, vice president of corporate & investor communications, CNET Networks.
Other divisions in the parent company have not fared as well. CNETNetworks media division let go of about 15 per cent of its staff in the past year.
Saving money with data
The Swiss subsidiary's business model is that of a proprietary database publisher, selling access to data in 18 languages with about a million computing and communications products.
The data are standardized and indexed by SKU (stock keeping unit) numbers, product descriptions, availability info, price, and technical features.
Such databases are used by vendors of IT products to provide product information to their customers and employees, especially sales teams.
CNET Channel sold 171 data licensees in 2001, a 23 percent year-over-year increase, according to the company. Last year it increased that number to 218 licenses sold.
It helps value added resellers save time and money by enabling them to source products, provide quotes and process orders more quickly and professionally, according to Laurie McCabe, an analyst with Summit Strategies, a market research firm.
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