CNET Networks, Inc. (NDAQ: CNET) owns perhaps the most valuable, but underutilized, domain portfolio in the world. CBS Corporation (NYSE: CBS) acquired it at a steep discount today, paying only $1.8 billion for the struggling technology company. The acquisition extend CBS's internet presence and gives it access to some of the most valuable entertainment and news domains in the world - including News.com and TV.com.

"When you can combine the entertainment assets, the news assets, the platforms that are available with technology, the cross advertising opportunities, it just gives us great scale," CBS Chief Executive Leslie Moonves said on a conference call.

The $1.8 billion deal, announced this morning, values CNET at $11.50 per share and represents a 45% premium over yesterday's close. The technology company posted $406 million in revenues for 2007, which means CBS paid about 4.4x revenues for the acquisition. However, the domain portfolio contains the majority of the value. Domains like Cool.com have attracted offers of upwards of $38 million, which means domains like News.com may be worth substantially more.

The acquisition would also help boost CBS's earnings and expects its combined internet unit to reach $1 billion in revenue by 2010 or 2011. Obviously, the cross-advertising between television and internet would be a huge driver of traffic to the newly acquired domains. The move may have surprised many, but it looks to many like a great play at just the right time!

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