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CNET’s Bonnie still bullish on Internet

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Shelby Bonnie, chairman-CEO of CNET Networks Inc., has been a central figure in leading the media company's growth since its founding in 1992.

As the first investor in CNET and the company’s third employee, Bonnie worked closely with CNET founder Halsey Minor to build the media business into a widely recognized leader in technology news and reviews.

A key destination for b-to-b advertisers, CNET distributes its content over TV, radio, print, the Web and wireless devices. Its brands include CNET, ZDNet, mySimon, News.com, Computer Shopper magazine and CNET Radio, as well as CNET ChannelServices, which features CNET DataServices and CNET ChannelOnline.

BtoB: Your business model is based heavily on advertising revenue. Does that still make sense in today’s economy?

Bonnie: We have a mix of advertising, including print, broadcast and online, which is about 66% [of total revenue]. But there are other revenue streams, including 21% from lead revenue [a referral fee paid for leads generated], 5% for channel services, including license and subscription fees, and 8% for international [revenues].

For the good and the bad, I remain a very strong supporter of Internet advertising. You will see other types of revenue streams, such as license fees, premium services and research.

BtoB: Will advertising remain your core revenue stream?

Bonnie: I still believe advertising will be an important and viable revenue stream going forward. You hope the overall mix grows. We have some of those businesses now, some stuff around research, and we currently have some premium services through ChannelOnline, which is for VARs [value-added resellers], providing access to a product catalog priced at $50 to $100 per seat per month.

Through TechRepublic [a Gartner Group Inc. IT site that CNET is in the process of acquiring], we’ll do a premium service for people within the industry. We continue to look for ways to expand the models.

BtoB: How are the ad models changing?

Bonnie: I think an interesting model is controlled circulation. In today’s environment, you can ask more of users. You can ask people about their job function, size of company, purchase influence, etc. and create models similar to controlled circulation in magazines. At TechRepublic, for example, you have to be a registered user to access the site.

BtoB: How do you see advertising pricing deals changing this year?

Bonnie: One of the things I’d say about this medium is that it’s a very active medium. You have an engaged brain, thinking and doing stuff. The thing you have to be very aware of, as a publisher and marketer, is context is very important.

Part of what you’re seeing in terms of pricing for non-contextual run-of-site units, is you see a lot of pricing pressure. People recognize the importance of context, and those will remain premium formats going forward. In general, the more you know about the users, the greater the ability to target against those users. Those are the factors that you should use to evaluate how you pay for those types of messages.

BtoB: Which ad formats and models are proving most successful for your advertisers?

Bonnie: Within the buying services—Shopper.com, mySimon.com, etc.—there is a lot of experience that shows those ads are successful. In many ways, like in-store signage, the people in [these areas] are clearly in the mode of buying a notebook or laptop, and you can influence the choices they make by advertising in a targeted environment.

You also see branding, as you’ve seen with the new ad units [proposed in February by the Interactive Advertising Bureau]. The statistics are pretty compelling that these ad units create awareness and affinity for a brand. In today’s world, there is a need for so much more information.

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