Transaction to Extend CNET Networks’ Leadership Position in the
IT Professional Marketplace
CNET Networks Forms Long-term Exclusive Content Alliance with Gartner
SAN FRANCISCO, April 9, 2001 - CNET Networks, Inc. (Nasdaq: CNET), the global source of information and commerce services for the technology industry, today announced that it has signed a definitive agreement to acquire TechRepublic Inc. from Gartner, Inc. (NYSE: IT and ITB), a leading technology industry research firm, for $23 million in cash and common stock. Louisville, KY-based TechRepublic is the leading online destination developed exclusively for Information Technology (IT) professionals by IT professionals (Nielsen//NetRatings, February 2001).
The transaction, which is not subject to any financing contingency, shareholder or regulatory approval, is expected to close early in the third quarter. It will expand CNET Networks' leading market share with IT professionals — from the Chief Information Officer (CIO) to the help desk, and from small companies to large corporations — by providing them an unmatched resource combining IT-oriented content and services from Gartner, TechRepublic and CNET Networks. The addition of TechRepublic will also create the world’s largest community of IT professionals by building on CNET Networks’ reach to 66 percent (or 3.4 million) of all professionals in MIS/EDP departments or technical occupations on the Web (Nielsen//NetRatings, Q4 2000 at work study). To this outstanding base, TechRepublic will add 1.5 million registered members in the IT professional category (March 2001 internal logs).
The IT market is poised for exceptional growth in the next ten years. According to Gartner, technology spending as a percentage of all capital expenditures has risen from five percent in 1975 to an estimated 30 percent in the year 2000. Gartner predicts that this figure will hit 50 percent in the year 2010. By enhancing its reach to the key decision makers within the fast-growing and lucrative IT market, CNET Networks will be able to develop valuable new targeted marketing opportunities for its customers in the technology space.
According to the Internet Advertising Bureau, 27 percent of 2000 online ad spending was from technology companies, the largest category among online advertisers. The Computer Publishing Market Forecast 2000 (Simba) estimates that in 2001, computer trade magazines, targeted to IT professional audiences, are expected to capture over $800 million in revenues from enterprise and business technology vendors wishing to reach this audience. As these IT professionals turn increasingly to online sources such as TechRepublic, CNET Networks, through this acquisition, will be better poised to capture a large share.
“The Internet has become the number-one place IT professionals go to research, compare, and make brand and buying decisions,” said Shelby Bonnie, CEO of CNET Networks. “This transaction enables us to create the definitive online resource for this critical, influential audience of IT professionals, as well as the best environment for technology marketers to reach their most important customers.”
TechRepublic (www.techrepublic.com) serves the needs of the professionals representing all segments of the IT industry by providing original content designed to engage, inform and educate its members. TechRepublic communities engage IT professionals in the ultimate peer-to-peer experience, providing actionable information, tools and services to help members get their jobs done. The commitment level of its audiences is underscored by the 3 million subscriptions to its selection of targeted newsletters fulfilled for 1.2 million unique subscribers (March 2001), complementing CNET Networks’ newsletter audience of 10.4 million unique subscribers (Q4, 2000).
“TechRepublic provides trusted advice, content and procurement services for busy IT professionals through its community-oriented Web site and targeted newsletters,” said Barry Briggs, President of CNET Networks Media. “This audience is of extremely high value to our marketing partners by virtue of their job functions, influence, and need for highly credible, real-time information.”
CNET Networks and Gartner Content Alliance
As part of the transaction, CNET Networks, Gartner and TechRepublic will expand many of their existing content and event-related agreements. The new arrangement maximizes online presence for the brands, and extends content sharing among the three sites.
“This is a mutually beneficial progression of our existing relationship with CNET Networks. By expanding our content alliance, Gartner will continue to consistently and prominently deliver its premier brand and research to not only TechRepublic’s 1.5 million registered members, but also to CNET Networks’ audience of millions of IT and business professional users,” said Michael Fleisher, CEO of Gartner.
“We have worked extensively with Gartner – on many levels – in the past, and are excited to expand our relationship with them through this transaction,” said Bonnie. “As one of the world’s top industry research firms, Gartner represents quality. We believe our audiences will mutually benefit from a more extensive content exchange program.”
About CNET Networks
About Gartner, Inc.
Gartner, Inc. (NYSE: IT and ITB) provides unrivaled thought leadership for more than 10,000 organizations, helping clients to achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner’s technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit; Gartner Consulting; Gartner Events, including Gartner’s renowned Symposia; and at www.gartner.com. Founded in 1979 and headquartered in Stamford, Connecticut, Gartner achieved fiscal 2000 revenues of $859 million. Gartner's 4,600 associates, including 1,400 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's industry-leading products and services, please visit us on the Web at www.gartner.com.
This press release includes forward-looking information and statements regarding the expected benefits of CNET Networks’ acquisition of TechRepublic and the content sharing agreement with Gartner that are subject to risks and uncertainties that could cause actual results to differ materially. These statements are often identified by the words "expect", "estimate," "target," "believe," "anticipate" and "intend". These statements are valid only as of the date of this release, and we undertake no duty to publicly update these forward-looking statements, whether as a result of new information, future developments or otherwise. The forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including the following: that that costs associated with the integration of TechRepublic may exceed expectations and have an adverse effect on the company’s financial results; that losses attributable to TechRepublic’s ongoing business will dilute the company’s earnings; that the loss of key TechRepublic personnel following the acquisition will cause a decline in the quality of TechRepublic’s offerings; a continued or worsening slowdown in advertising spending on the Internet in general or on CNET Networks' properties in particular; the inability of the company to increase the proportion of advertising from established companies; and to the general risks associated with the company businesses. For risks about CNET Networks, Inc.'s business, see its Form 10-K for the year-ended December 31, 2000 including under the captions "Risk Factors" and "Management's Discussion and Analysis of Results of Operations."
Martha PapaliaCNET Networks, Inc.firstname.lastname@example.org Carol WallaceGartner, Inc.email@example.comRobert BorchertCNET Networks, Inc.firstname.lastname@example.org Julie GottliebGartner, Inc.203/316-3901Julie.email@example.com