CNET in Distress
While BoomTown has not paid enough attention to the ongoing, well, debacle at CNET, its announcement that it was conducting layoffs and also making a variety of changes was a major moment for the company.
Using the term “workforce realignment,” an ominous-sounding phrase that calls to mind how job shifts were once made in the former Soviet Union, the San Francisco-based tech news and reviews site was clearly prompted to make these changes due to the ongoing pressure from activist investor Jana Partners, although it denied that was the case (which meant it was the case, of course).
Thus, to assuage Wall Street, the courts and, well, to look like it was getting busy, CNET (CNET) laid off 10% of its U.S. workforce, or 120 employees, as well as saying it would be fixing a range of other things gone wrong at the company.
That included cutting costs, upgrading technology, rejiggering content offerings, fixing the sales process and “implementing business unit changes to realign resources to support the company’s strategic priorities and promote efficiencies.”
Well, at least the bathrooms are in good working order! But otherwise, that would be everything, right?
As much as I have been an admirer in the past of CNET’s work, it’s clear that it has lost a step in significant ways, from not being quick in changing its technology to being too slow to respond to the emergence of sassy tech bloggers to not paying enough attention to the massive shifts in how ads are sold online.
Being tone deaf to this kind of paradigm-shift problem is no surprise to us old media folks, who have been getting pummeled for years now. But it is interesting to note that Web 1.0 companies like CNET and, yes, Yahoo (YHOO) have also fallen victim to the same kind of inexorable trend.
Still, what CNET’s board and management will not do is change their stance on its mano-a-mano with Jana, which recently won in court over being allowed to nominate directors to the board of the company. CNET has said it would appeal that ruling.
Jana, of course, mocked CNET’s efforts in a letter today, noting the changes were too little, too late and too insider:
“Although CNET has belatedly said it will examine these fundamental issues, shareholders should ask themselves whether there is any reason to believe that the current leadership will do so successfully. The current board of directors has presided over an almost 50% stock price decline in the last two years through yesterday, yet they failed to demonstrate any sense of urgency to address these basic issues until publicly called on to do so. CNET’s board of directors and much of its senior management team, including its CEO and the head of its ‘task force,’ also lack the necessary sector experience and expertise to address these issues and future challenges effectively.”
In other words, step aside, as we know best.
Actually, I am not sure, with the sands shifting so quickly every day in the online content game, if anyone does.