CNET claims traffic dropped only 13%, not 55%
October 24, 2006comScore had reported earlier that CNET’s page views for the most recent quarter had dropped a precipitous 55% compared to the year-earlier figure. Yesterday CNET released their third-quarter financials which included their own internal traffic figures that show only a 13% drop in page views.
I’m guessing the truth is somewhere in between. comScore’s numbers are from a sampling panel, it’s possible their panel is not representative of the entire Internet audience. CNET’s figures are no doubt internally derived, and those can also be misleading if for example you don’t manage to identify and clean out all the bots and zombies pulling worthless page views from your server. comScore could be undercounting, CNET could be overcounting.
CNET’s bond rating getting cut to junk status is another case of things not being quite as bad as they might seem. CNET has plenty of cash to pay off the bondholders, which is what they’re apparently planning to do.
So things aren’t as dire as the news might have made it seem. The bond issue is not a big deal, yes it drains cash but not to a dangerously low level. And any traffic drop is bad, but if the real figure is closer to CNET’s number than comScore’s number then things aren’t irreversible. Especially since it seems CNET is doing a decent job monetizing the page views it does have. Revenue is up by about the same percent that traffic has dropped, meaning they’re squeezing more from less. That’s not necessarily a bad formula.
The real question is Q4. CNET’s been claiming a large part of the slowdown is from the late start for the next-gen consoles from Nintendo and Sony. Well those launch next month, CNET has to prove they can pull in a solid chunk of the advertising budgets being spent around those launches.