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CNet Sells Webshots for $45 Million
Thursday October 25, 8:25 pm ET
CNet Sells Photo-Sharing Site Webshots to American Greetings for $45M After Buying It for $70M

SAN FRANCISCO (AP) -- Online technology news and entertainment provider CNet Networks Inc. has sold photo-sharing site Webshots to American Greetings Corp. for $45 million, substantially less than the service cost to acquire three years ago.

The San Francisco-based company announced the deal Thursday along with its third-quarter financial results. CNet suffered a loss of $16.6 million during the three months ended in September, widening from a loss of $2.3 million at the same time last year.

The Webshots sale represented another setback because CNet bought the site for $70 million in 2004. Since then, Webshots has faced tougher competition from other photo sharing services such as Yahoo Inc.'s Flickr.

Neil Ashe, CNet's chief executive officer, described the Webshots sale as part of an effort to create "a bold media company that is entrepreneurial and aggressive," adding that the company will make "all changes necessary to realize our objectives."

As part of its makeover, CNet also said it had hired publishing executive Stephen Colvin to oversee several of the company's entertainment brands, including GameSpot, FilmSpot, and Colvin had previously been CEO of Dennis Publishing, which owns Maxim magazine among other titles.

Thursday's sale is the latest financial twist in Webshots' up-and-down existence.

Webshots founder Narendra Rocherolle and his business partners first sold the site to ExciteAtHome for $82.5 million in 1999, near the height of the dot-com boom. After ExciteAtHome went bankrupt, Rocherolle and his partners bought Webshots back for just $2.4 million in 2002 and subsequently sold it to CNet.

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