CNET Networks Reports First Quarter 2004 Financial Results; Company Posts Revenues of $63.4 Million; EPS of $0.02.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--April 14, 2004

CNET Networks, Inc. (Nasdaq: CNET) today reported that revenues for the first quarter ended March 31, 2004 totaled $63.4 million, a 12 percent increase compared to revenues of $56.6 million for the same period of 2003. The company's first quarter operating loss was $5.7 million, versus an operating loss of $14.6 million during the same period in 2003. Net income for the first quarter of 2004 was $2.9 million, or $0.02 per share, compared to a net loss of $15.8 million, or $0.11 per share, for the same period last year. Approximately $0.04 of net income per share for the first quarter of 2004 is attributable to a net gain from unusual items, as further explained on the financial attachments that accompany this press release.

In the first quarter of 2004, CNET Networks' operating income before depreciation and amortization was $2.4 million. This compares to an operating loss before depreciation and amortization of $7.4 million in the first quarter of 2003. A table that reconciles operating income (loss) before depreciation and amortization to the operating income (loss) found on CNET Networks' statement of operations can be found on the "Operating Income (Loss) Reconciliation" page that accompanies this press release.

"During the first quarter, our core Interactive business continued on its strong growth trajectory, with all key metrics trending ahead of our expectations, including strong organic growth in revenue, improved margins, and growth in unique users," said Shelby Bonnie, Chairman and CEO of CNET Networks.

"We are an entrepreneurial company that has demonstrated the ability to build successful interactive content environments. We're moving aggressively to build on our existing content categories and add new ones," said Bonnie. "The launch of our music products later this quarter is a great example of this strategy in action."

Business Review

General highlights include:

-- CNET Networks' global network of Internet properties reached

an average of 76.5 million unique users on a monthly basis

during the first quarter of 2004(1), an increase of 27% from

the first quarter of 2003.

-- CNET Networks' core interactive business illustrated strong

organic growth trends during the quarter - interactive

revenues increased 32% from the first quarter of 2003.

-- In March, CNET Networks acquired EDventure Holdings in a cash

and stock transaction. Headed by industry pundit Esther Dyson,

EDventure is a renowned independent authority on technology

issues through its prestigious Release 1.0 publications and PC

Forum conferences. CNET Networks plans to leverage its reach

and infrastructure to expand EDventure. Through EDventure's

network of global, corporate, Wall Street, and Washington,

D.C. leaders, CNET Networks intends to deepen its ties with IT

executive audiences, and establish new entry points into

financial, political, and technology start-up audiences.

-- In April, CNET Networks completed the acquisition of WGR

Media, Inc. in a cash transaction. The move cements the

leadership of CNET Networks' GameSpot family of Web sites.

Wireless Gaming Review, which provides editorial reviews,

previews, and insights to mobile gamers, expands upon

GameSpot's coverage of PC and video gaming with content

addressing wireless gaming, one of the fastest-growing gaming

market segments. The acquisition supports CNET Networks' goal

to expand its customer base by attracting consumer oriented

marketers.

-- In the coming weeks, CNET Networks plans to expand into the

music content category with two product launches. First, CNET

Download.com plans to launch a music site featuring free,

artist-authorized digital downloads from a diverse selection

of participating artists. Rather than compete with fee-based

music download services, the site will provide users the

ability to "discover" music from participating artists.

Following this, CNET Networks plans to launch its all-new

MP3.com Web site as a comprehensive, user-friendly music

information site, helping consumers get the most out of

today's digital music. Both sites will enable the company to

initiate relationships with music and consumer marketers.

-- During 2003, CNET Networks received its highest number of

prestigious editorial and content awards and accolades. This

recognition is building again, with the most recent honors

including: CNET News.com was nominated for a prestigous

National Magazine Award, and two CNET Networks reporters won

"30 under 30" awards by TJFR Group, a journalism organization

that has been watching the growth and development of the top

journalistic talent for years.

Business Outlook

For the second quarter of 2004, management estimates total revenues will be between $65.5 million and $67.5 million. Interactive revenues are expected to be in the range of $57.0 million to $58.5 million, and publishing revenues are expected to be between $8.5 million and $9.0 million in the second quarter. Management estimates an operating loss between $1.8 to $2.8 million and operating income before depreciation and amortization between $3.5 million and $4.5 million for the second quarter of 2004.

Management has increased financial guidance for full-year 2004. The new guidance for 2004 consists of revenue estimates in the range of $275 million and $285 million. Interactive revenues are expected to be in the range of $237 million to $245 million, and publishing revenues are expected to be between $38 million and $40 million in 2004. Management now estimates operating income will be between $3.1 million and $5.1 million and operating income before depreciation and amortization will be between $30 million and $32 million in 2004. A table that reconciles operating income (loss) before depreciation and amortization guidance to operating income (loss) guidance can be found on the "Guidance to the Investment Community" sheet that accompanies this press release.

Conference Call and Webcast

CNET Networks will host a conference call to discuss its first quarter financial and operating performance and the company's business outlook beginning at 5:00 pm ET (2:00 pm PT), today, April 14, 2004. To listen to the discussion, please visit http://ir.cnet.com and click on the link provided for the webcast conference call or dial [phone] (international dial-in: [phone]). A replay of the conference call will be available through April 28, 2004 via webcast at the URL listed above or by calling [phone] (international dial-in: [phone]) and entering the conference ID number 6483916. The company's past financial news releases, related financial and operating information, and access to all Securities and Exchange Commission filings, can also be accessed at http://ir.cnet.com.

Safe Harbor

This press release and its attachments include forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ materially. These forward-looking statements include statements regarding the company's expected financial results in the second quarter 2004 and full-year 2004 and statements regarding new acquisitions and new product launches, as well as other statements throughout the release that are identified by the words "expect," "estimate," "target," "believe," "anticipate," "intend" and similar expressions. These statements are only effective 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 risks and uncertainties include: a lack of growth or a decrease in marketing spending on the Internet or on CNET Networks' properties in particular, which could be prompted by a lack of confidence or familiarity with the Internet as an advertising medium, weakness in corporate or consumer spending, competition from other media outlets or other factors; the failure of existing advertisers to meet or renew their advertising commitments; the loss of marketing revenue and users to CNET's competitors, especially in the highly competitive fields of comparative shopping, personal technology and games and entertainment; a decline in revenues from our print publications due to a decrease in the company's custom publishing business or as more marketing spending shifts from print to the Internet; the weakening of the US dollar, which could increase the operating losses of our international operations; the acquisition of businesses or the launch of new lines of business, which could decrease the company's cash position, increase operating expense, and dilute operating margins; an increase in intellectual property licensing fees, which could increase operating expense, including amortization; the risk of future impairment of the company's assets; and general risks associated with our business. For risks about CNET Networks' business, see its Annual Form 10-K for the year ended December 31, 2003 and subsequent Forms 8-K, including disclosures under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which are filed with the Securities and Exchange Commission and are available on the SEC's website at www.sec.gov.

About CNET Networks, Inc.

CNET Networks, Inc. (www.cnetnetworks.com) is a premier global interactive content company that informs, entertains, and connects large, engaged audiences with content in the personal technology, games and entertainment, and business technology categories. Known for its editorial expertise, the company combines its award winning content with the power of interactive technology to provide its users an intuitive, dynamic and relevant environment. The company's content portfolio features top brands including CNET, ZDNet, TechRepublic, GameSpot, and mySimon, as well as Computer Shopper magazine, and CNET Channel. With a strong presence in the US, Asia and Europe, CNET Networks has operations in 12 countries.

(1) CNET Networks January - March 2004 (internal log data)

Consolidated Statements of Operations
Unaudited
(in thousands, except share and per share data)

                                                   Three Months Ended
                                                        March 31,
                                                    2004         2003

Revenues
  Interactive                               $     55,505 $     42,049
  Publishing                                       7,892       14,539
    Total revenues                                63,397       56,588

Operating expenses:
  Cost of revenues                                33,850       36,201
  Sales and marketing                             18,234       17,717
  General and administrative                       8,903       10,046
  Depreciation                                     7,171        5,612
  Amortization of intangible assets                  900        1,604
    Total operating expenses                      69,058       71,180

    Operating loss                                (5,661)     (14,592)

Non-operating income (expense):
  Realized gains on sale of investments            8,032            -
  Interest income                                    482          673
  Interest expense                                (1,678)      (1,769)
  Other                                            1,832            5
     Total non-operating income (expense)          8,668       (1,091)
    Income (loss) before income taxes              3,007      (15,683)

    Income tax expense                                79          146

      Net income (loss)                     $      2,928 $    (15,829)

Basic net income (loss) per share           $       0.02 $      (0.11)

Diluted net income (loss) per share         $       0.02 $      (0.11)

Shares used in calculating basic net income
 (loss) per share                            142,627,445  139,256,081

Shares used in calculating diluted net
 income (loss) per share                     150,074,641  139,256,081

Note: Beginning in 2004, CNET Networks, Inc. will refer to previously
reported "Internet" revenues as "Interactive" revenues.


Consolidated Balance Sheets
Unaudited
(in thousands, except share data)

                                                March 31, December 31,
                                                    2004         2003
            ASSETS
Current Assets:
  Cash and cash equivalents                 $     77,925       65,913
  Investments in marketable debt securities       11,466       12,556
  Accounts receivable, net                        46,625       54,387
  Other current assets                            15,918        8,823
    Total current assets                         151,934      141,679

Restricted cash                                   19,650       19,159
Investments in marketable debt securities         40,180       38,711
Property and equipment, net                       50,499       56,384
Other assets                                      21,955       23,092
Intangible assets, net                            12,579       11,263
Goodwill                                          63,087       61,555
    Total assets                            $    359,884      351,843


    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                          $      8,861        8,767
  Accrued liabilities                             51,987       53,151
  Current portion of long-term debt                3,773           99
    Total current liabilities                     64,621       62,017

Non-current liabilities:
  Long-term debt                                 114,338      118,029
  Other liabilities                                2,154        1,835
    Total liabilities                            181,113      181,881

Stockholders' equity:
  Common stock; $0.0001 par value;
   400,000,000 shares authorized;
   143,038,613 outstanding at
   March 31, 2004 and 139,251,879
   outstanding at December 31, 2002                   14           14
  Notes receivable from stockholders                   -         (137)
  Additional paid-in-capital                   2,712,947    2,709,178
  Accumulated other comprehensive income         (12,099)     (14,074)
  Treasury stock, at cost                        (30,428)     (30,428)
  Retained deficit                            (2,491,663)  (2,494,591)
    Total stockholders' equity                   178,771      169,962
    Total liabilities and stockholders'
     equity                                 $    359,884      351,843


Statements of Cash Flows
Unaudited
(in thousands)

                                                   Three Months Ended
                                                        March 31,
                                                    2004         2003

Cash flows from operating activities:
Net Income (Loss)                                 $2,928     $(15,829)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
   Depreciation and amortization                   8,071        7,216
   Asset impairment and disposals                      -           83
   Noncash interest                                  216          195
   Allowance for doubtful accounts                   686          880
   (Gain) loss on sale of marketable
    securities and privately held
    investments                                   (8,032)           -
   Changes in operating assets and
    liabilities,
     net of acquisitions
     Accounts receivable                           7,126       11,723
     Other assets                                 (2,397)        (848)
     Accounts payable                                 94          762
     Accrued liabilities                          (2,499)      (4,288)
     Other liabilities                               319         (718)
        Net provided by (cash used) in
         operating activities                      6,512         (824)

Cash flows from investing activities:
 Purchase of marketable debt securities           (9,717)      (4,995)
 Proceeds from sale of marketable debt
  securities                                       9,640       16,982
 Proceeds from sale of privately held
  companies                                        9,095            -
 Net cash paid for acquisitions                   (1,673)           -
 Capital expenditures                             (3,277)      (2,496)
        Net cash provided by investing
         activities                                4,068        9,491

Cash flows from financing activities:
 Payments received on stockholders' notes            137            -
 Net proceeds from employee stock purchase
  plan                                               227          174
 Net proceeds from exercise of options and
  warrants                                         3,042            -
 Principal payments on borrowings                    (77)        (107)
        Net cash provided by financing
         activities                                3,329           67

Net increase (decrease) in cash and cash
 equivalents                                      13,909        8,734
Effect of exchange rate changes on cash and
 cash equivalents                                 (1,897)         124
Cash and cash equivalents at the beginning
 of the period                                    65,913       47,199
Cash and cash equivalents at the end of the
 period                                          $77,925      $56,057


Segments
Unaudited
(in thousands)

CNET's primary areas of measurement and decision-making include two
principal business segments. CNET has determined that its business
segments are U.S. Media and International Media. U.S. Media consists
of an online network focused on three content categories: personal
technology, games and entertainment and business technology. Beginning
in 2004, U.S. Media also includes Channel Services, a product database
licensing business and an online technology marketplace for resellers,
distributors and manufacturers. Previously, Channel Services was
presented as a separate segment; however, as we continued to see a
convergence of customer relationships between U.S. Media and the
Channel Services product offerings, we determined that combining the
reporting results of Channel Services within U.S. Media more
accurately reflects the decision-making processes, internal reporting
and resource allocation within these businesses. International Media
includes the delivery of online technology information and several
technology print publications in non U.S. markets. Management believes
that segment operating income (loss) before depreciation and
amortization is an appropriate measure of evaluating the operating
performance of the company's segments. However, segment operating
income (loss) before depreciation and amortization should not be
considered a substitute for operating income, cash flows or other
measures of financial performance prepared in accordance with
generally accepted accounting principles.


                               Three months ended March 31, 2004
                              U.S.     International
                             Media        Media     Other (1)  Total

 Revenues                   $52,769     $10,628        $-     $63,397

 Operating expenses          47,119      13,868     8,071      69,058

   Operating income (loss)   $5,650     $(3,240)  $(8,071)    $(5,661)


                                Three months ended March 31, 2003
                              U.S.     International
                             Media        Media     Other (1)  Total

 Revenues                   $49,821      $6,767         $-    $56,588

 Operating expenses          48,617       9,926     12,637     71,180

   Operating income (loss)   $1,204     $(3,159)  $(12,637)  $(14,592)


(1) For the three months ended March 31, 2004, other represents
operating expenses related to depreciation of $7,171 and amortization
of $900. For the three months ended March 31, 2003, other represents
operating expenses related to realignment of $5,421, depreciation of
$5,612 and amortization of $1,604.


Quarterly Statistical Highlights
Unaudited

                                    Q1-04  Q4-03  Q3-03  Q2-03  Q1-03

Total Quarterly Revenue ($mm)       $63.4  $73.5  $57.7  $58.4  $56.6

Revenue Distribution (%)(a)

 Marketing Services                    76%    74%    68%    69%    63%
 Licensing, Fees & User                12%    10%    12%    11%    11%
 Publishing                            12%    16%    20%    20%    26%

Advertiser Metrics
 Top 100 US Advertisers' Renewal
  Rate (Q-to-Q)                        89%    96%    94%    90%    89%
 Top 100 US Advertisers' % of
  Network Revenue                      58%    60%    58%    60%    67%

Select Business Metrics
 Network Unique Users (mm)           76.5   66.3   65.5   63.3   60.3
 Network Average Daily Page
  Views (mm)                         44.2   43.9   40.7   36.3   31.8
 Total Paid Leads (b) (mm)           46.1   49.0   38.3   38.2   39.8

Balance Sheet Highlights ($mm)
 Cash                               $77.9  $65.9  $65.1  $72.8  $56.0
 Marketable Debt Securities          51.6   51.2   53.3   56.9   68.2
 Restricted Cash                     19.7   19.2   19.2   18.9   18.4
 Total Cash & Equivalents          $149.2 $136.3 $137.6 $148.6 $142.6

 Total Debt                        $118.1 $118.1 $117.9 $117.9 $118.0

 Days Sales Outstanding (DSO)          66     67     64     67     69

(a) Revenue distribution definitions are as follows:
Marketing Services - sales of advertisements on our Internet network
through impression-based and activity-based advertising.
Licensing, Fees & User - licensing our product database, online
content, subscriptions to online services, and other paid services.
Publishing - sales of advertisements in our print publications,
subscriptions and newsstand sales of publications, and custom
publishing services.

(b) Total Paid Leads include leads from shopping services, downloads,
search, and white papers.


                 Guidance to the Investment Community

$ in millions, except       Q1-04    Q2-04 estimate  FY 2004 estimate
per share                   Actual     Low - High       Low - High

Interactive Revenues      $55.5      $57.0 - $58.5   $237.0 - $245.0
Publishing Revenues        $7.9        $8.5 - $9.0     $38.0 - $40.0

   Total Revenues         $63.4      $65.5 - $67.5   $275.0 - $285.0

Operating income
 before depreciation &
 amortization              $2.4        $3.5 - $4.5     $30.0 - $32.0

Depreciation expense      ($7.2)             ($4.5)           ($20.7)

Amortization expense      ($0.9)             ($1.8)            ($6.2)

Operating income
 (loss)                   ($5.7)    ($2.8) - ($1.8)      $3.1 - $5.1

Realized gains on sale
 of investments            $8.0                  -              $8.0

Interest expense, net     ($1.2)             ($1.3)            ($5.1)

Other income (expense)     $1.8              ($0.1)             $1.5

Tax expense               ($0.1)             ($0.1)            ($0.3)

Earnings (loss) per
 share                    $0.02    ($0.03) - ($0.02)   $0.05 - $0.06

Safe Harbor Statement:
This press release and its attachments include forward-looking
information and statements that are subject to risks and uncertainties
that could cause actual results to differ materially. These
forward-looking statements include statements regarding the company's
expected financial results in the second quarter 2004 and full-year
2004 and statements regarding new acquisitions and new product
launches, as well as other statements throughout the release that are
identified by the words "expect," "estimate," "target," "believe,"
"anticipate," "intend" and similar expressions. These statements are
only effective 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 risks
and uncertainties include: a lack of growth or a decrease in marketing
spending on the Internet or on CNET Networks' properties in
particular, which could be prompted by a lack of confidence or
familiarity with the Internet as an advertising medium, weakness in
corporate or consumer spending, competition from other media outlets
or other factors; the failure of existing advertisers to meet or renew
their advertising commitments; the loss of marketing revenue and users
to CNET's competitors, especially in the highly competitive fields of
comparative shopping, personal technology and games and entertainment;
a decline in revenues from our print publications due to a decrease in
the company's custom publishing business or as more marketing spending
shifts from print to the Internet; the weakening of the US dollar,
which could increase the operating losses of our international
operations; the acquisition of businesses or the launch of new lines
of business, which could decrease the company's cash position,
increase operating expense, and dilute operating margins; an increase
in intellectual property licensing fees, which could increase
operating expense, including amortization; the risk of future
impairment of the company's assets; and general risks associated with
our business. For risks about CNET Networks' business, see its Annual
Form 10-K for the year ended December 31, 2003 and subsequent Forms
8-K, including disclosures under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," which are filed with the Securities and
Exchange Commission and are available on the SEC's website at
www.sec.gov.


Operating Loss Reconciliation
 (in thousands)

                                                   Three Months Ended
                                                        March 31,
                                                     2004        2003

 Operating loss                                   $(5,661)   $(14,592)
 Depreciation                                       7,171       5,612
 Amortization of intangible assets                    900       1,604
 Operating income (loss) before depreciation
    and amortization                               $2,410     $(7,376)

The company believes that "operating income (loss) before depreciation
and amortization" is useful to management and investors in evaluating
the current operating performance of the company, since depreciation
and amortization include the impact of past transactions and costs
that are not necessarily directly related to the current underlying
capital requirements or performance of the business operations.
Management refers to "operating income before depreciation and
amortization" to compare historical operating results, in making
operating decisions and for planning and compensation purposes. A
limitation associated with these measures is that they do not reflect
the costs of certain capitalized tangible and intangible assets used
in generating revenue. Management evaluates the costs of these assets
through other financial measures such as capital expenditures.
"Operating income before depreciation and amortization" should be
considered in addition to, and not as a substitute for, other measures
of financial performance prepared in accordance with US GAAP.



Explanation of Net Gain from Unusual Items

In the first quarter of 2004, approximately $0.04 of net income per
share can be attributed to the effect of certain unusual items. The
company recognized $8.0 million of gains on the sale of investments
during the quarter. Additionally, as a result of integrating its
Switzerland-based Channel Services operations into US Media, the
company evaluated the carrying value of its office buildings and other
fixed assets in Switzerland and recognized $3.5 million of accelerated
depreciation and a related $1.7 million foreign currency gain. The
foreign currency gain is included in the "Other Income" line of the
income statement. The company believes that this information is useful
to investors because these items are infrequent in nature and may
affect the comparability of the current quarter results to other
quarterly results.