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GameSpot Parent Revises Outlook, CEO Resigns

Media company CNET Networks, owner of consumer game site GameSpot, has revised down its financial outlook for the rest of 2006, citing "several industry trends in the technology and video game industries" which "continue to impact CNET Networks' business"
Media company CNET Networks, owner of video game-related consumer websites GameSpot.com, GameFAQs.com, and Metacritic.com, has announced that it has revised its outlook for the company's third quarter and remainder of 2006, citing "several industry trends in the technology and video game industries" which "continue to impact CNET Networks' business." According to a statement issued by CNET, the media company anticipates total revenues for the third quarter to be $92.8 million, down slightly from earlier estimates that ranged between $93 and $96 million. The company has also revised its expectations for the entirety of 2006, with total revenue now expected to range from $376 to $386 million. In April CNET announced expected 2006 revenues had dropped to between $386 million and $403 million, which would have represented a growth of 15 to 20 percent, as compared to the 17 to 21 percent previously forecast. At that time, the company cited the PlayStation 3's delay and console hardware transition as a reason for its revised outlook. In addition, the company also confirmed today that chairman, chief executive and CNET co-founder Shelby Bonnie resigned from the company following a review of its stock-options practices - a similar review to those currently going on at several video game publishers. CNET named Neil Ashe as the company's new chief executive, effective immediately. Bonnie will remain member of CNET's board. CNET has noted that a committee aimed at investigating the company's granting of stock options uncovered evidence of backdating, an issue that has plagued at least 130 companies, with Electronic Arts, Activision, THQ, and Take-Two Interactive all recently having become involved in investigations and/or lawsuits from shareholders regarding the options backdating controversy.

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