Welcome to the CNET Networks third quarter financial resultsconference call. (Operator Instructions) I would now like to turn the conference overto Ms. McLaughlin. Thank you, you may begin your conference.

Thank you and good afternoon. Before we get started I wouldlike to remind you that this call is being webcast. The webcast can be accessedon the CNET Network’s Investor Relations website at ir.CNETNetworks.com. Areplay will also be available shortly after the conclusion of this call. I’d also like to remind you that in the financial newsannouncement released today and also on this call, CNET Networks is providingspecific forward-looking statements including guidance related to our expectationsof future financial performance. Any forward-looking statements made as part ofour news today are subject to risks and uncertainties that could cause actualor predicted results to differ materially. These risks are outlined in our third quarter newsannouncement as well as in the company’s Securities and Exchange Commissionfilings, including its 10-K for the year 2006 which can be obtained from theSEC’s website or directly from our investor relations website. All information discussed on this call is as of today, October 25th, 2007 and CNET Networksundertakes no duty to update this information. Last but not least, you can find a reconciliation of thenon-GAAP financial measures that we use in our news release and on this call toGAAP financials on the last pages of today’s news announcement. Hosting today’s call are Neil Ashe, CNET Networks’ ChiefExecutive Officer; and George Mazzotta, our Chief Financial Officer. Following their prepared remarks, we will host a briefquestion-and-answer session. To facilitate the question-and-answer session, wewill be muting the line following each question and will take follow-upquestions if time allows. Now let me turn the call over to Neil.

Thanks, Cameron and thank you all for joining us. After ayear on the job, I can confidently say that we’re building a company that cansucceed in 2008, 2009 and beyond. Strategically, we’re focused on providingpeople with brands that make a difference and that help marketers win. We arepremium online. Financially, we’re realizing value from businesses that donot fit with our long-term plans and we are positioning ourselves to create valuefor shareholders with our balance sheet. Operationally, we have a winning teamwho knows what success is and is committed to achieving it. We are makingimportant internal changes that ensure we reach our goals. What does all this mean? It means that we’re creating a newCNET Networks, a bold company that is entrepreneurial and aggressive. We arenot the site of the day; we are the media company of the future. I’m excited to tell you about three significant eventsduring the quarter that underscore our commitment to success: (1) We have filled out our executive leadership ranks withthe addition of Stephen Colvin as Executive Vice President overseeing our Entertainmentand Lifestyle brands. Stephen comes to us from Dennis Publishing, where helaunched and built Maxim, Blender and The Week. (2) Last week we announced a $250 million credit facilitythat provides us with the financial flexibility to create value for ourshareholders. (3) We evaluated our brand portfolio and made the decisionto focus on the assets with the largest opportunities for us. Accordingly, wehave made the decision to sell WebShots to American Greetings for approximately$45 million. Before I share more results, I will provide highlights ofour third quarter results. The number of people coming to our propertiescontinues to grow. We ended the third quarter with 141 million monthly uniqueusers consuming over 91 million pages per day. As we discussed with you lastquarter, we have migrated some of…

Thank you, Neil. Before I review our third quarter results,I’d like to provide you with some insight into how we will account for the saleof WebShots. The sale of WebShots to American Greetings for $45.2 million incash will close today. We expect that the sale of WebShots will be treated foraccounting purposes as a discontinued operation. This means that we will reportthe net operating results of WebShots as a separate line on our incomestatement labeled discontinued operations in the fourth quarter. This also means the operating results of this business willbe removed from continuing operations within our historical financialstatements for all comparable periods beginning with the fourth quarter of 2007financial reports. Additionally, shortly after we close the sale of WebShots,we will file a pro forma financial statement which reflects the effect of thisdisposition for historical periods including interim periods in 2007 and thefull year 2006, 2005 and 2004 as required by SEC guidelines. As part of our annual impairment review during the thirdquarter, we determined that a portion of the carrying value of WebShots shouldbe impaired. As a result, our third quarter financial reports reflect a $19million non-cash asset impairment charge on our income statement as anoperating expense, and an equal amount is reflected as a reduction in goodwillon our balance sheet. This impairment had a significant effect on our reported netincome and income tax expense for the third quarter, which I’ll explain in amoment. We expect that the accounting for the sale of WebShots in the fourthquarter may result in a gain or loss, which will be reflected in discontinuedoperations. Now let me review with you our financial results for thethird quarter. Total revenue for the third quarter was $99.5 million, anincrease of 7% from $93.3 million last year. Revenue growth during the quarterwas driven largely by strong performance…

Thanks, George. We exit the third quarter with real progresson the transformation of our company. We are excited to be building a new CNETNetworks, a bold company that is entrepreneurial and aggressive. By realizingthe potential of our existing brands, identifying new opportunities for growthand continuously doing what we do better, we are building a vibrant andvaluable company that seizes the long-term opportunity and creates value forusers, employees, marketers and shareholders. CNET Networks builds and grows engaging media brands thatcaptivate passionate people. With leading online destinations serving over 140million people worldwide, CNET Networks is the media company of the future. That wraps up our formal comments and we’d like to turn itover to the operator so we can open it up for your questions.

Your first question comes from Mark Mahaney - CitiInvestments.

That organic revenue growth that you mentioned for thequarter excluding WebShots, can you just give the comparable growth rate, whatthat would have been like in the June quarter or in the first half of the year,just so we can see what the trend was? Then if you could just talk generally about pricing trendsthat you’re seeing for your premium ad inventory, do they seem relativelystable or are you seeing any pricing pressure? Thank you very much.

I’ll take the pricing question and let George handle thecomparable revenue growth rates. On the pricing trends, we are seeingconsistency in our pricing. In some of our premium areas we’ve had theopportunity to actually increase prices, so I guess the direct answer is no, wehave not seen downward pressure on our pricing in the fourth quarter. As relates to the comparable, excluding exited businessesgrowth rates, George?

Mark, for the first six months of 2007, without WebShots,our growth rate would have been in the mid-teens.

Your next question comes from Brian Fitzgerald - Banc ofAmerica Securities.

You mentioned that you’re seeing good traction in games onthe quarter. Microsoft just gave goodnumbers, specifically mentioning strong demand for Vistaand Premium. Can you talk to how things are shaping up for Q4 in terms ofadvertising around PC software? Are you seeing the games continue to be stronggoing into Q4?

Our guidance for Q4 obviously incorporates the bestinformation that we’ve got right now. Yes, we continue to see games performanceto be strong in the fourth quarter with new launches. We’re seeing strength inthe consumer electronic categories. I’d say beyond that, we’re seeing trendsconsistent with what we’ve seen in the PC space so far. We’re seeing pretty goodtrends in the business media section of our business as well.

Your next question comes from Megan Barker for Anthony Noto -Goldman Sachs.

Hi, it’s Megan Barker on for Anthony. A couple of questions.First, can you give us an update on the salesforce initiative to sell CNETproperties as a package deal? Just anycolor there? Secondly as you look to develop new sites, what verticals are youcurrently not in that you think could be interesting? Thank you.

First, the update on the sales initiative. As I mentioned inmy remarks, Jack Haire has been a tremendous influence on the organization sofar and he’s taken on the newly created role of Chief Client Officer withresponsibility for really three key items, which are (1) raising our industryvisibility (2) identifying strategies for new categories and new accounts, and (3)to ensure a world-class sales experience for our customers across our entirecompany. We’ve made a lot of progress on that front. We expect thatto deliver benefits, as I said, in 2008, 2009 and beyond. You can expect to see us probably addadditional folks over time in those areas as well. We are seeing stronger trends both in what would beconsidered out of category advertisers for us as well as those companies thatare operating or are marketing on multiple of our properties. It’s still in itsnascent stage though, so we’ll be talking about that more in the future, but sofar we’ve seen good progress. In terms of additional verticals, we’ve always said that ourevaluation of areas where we want to be where we’re not is based on threepretty key functions. One is, is there a sizeable audience that we believe thatwe can build in that marketplace? The second, is there marketer interest? Third, do we think we can do it better? We want to be leaders in the businesses that we are in, andthat’s why we’ve chosen to focus on the properties that we are focusing on today.The most exciting of which, as I mentioned, is BNET. We are very bullish on business media andwhat we think we can do in business media. BNET is business from the inside,which is something that no one else is doing, and there is a lot of heat aroundbusiness media right now, and we are excited and confident about being acompetitor in the marketplace.

Your next question comes from Kit Spring - Stifel Nicolaus.

Can you give us what the multiple is on both revenues and EBITDAfor the year on WebShots? Your CapEx was down quite a bit in 4Q. What do youexpect for the year for CapEx, what’s a run rate for the year on CapEx? Thankyou.

I’ll take those questions, Kit. WebShots, we’ll disclose that it has a EBITDAmargin about equal that of the total company. As far as our CapEx investmentgoes, our CapEx is, as you know, not a linear investment. Our CapEx is a planto fund expansion in the business, and we think our guidance of about $30 millionfor the year is appropriate and consistent with our capital investmentstrategy. We think that what we experienced in the first three monthsof this year will continue through the fourth quarter, which is that probablyabout 50% of our capital investment is devoted to our international expansionprograms. The other remaining 50% is devoted to domestic business expansion andinfrastructure investments.

Your next question comes from Sandeep Aggarwal - Oppenheimer.

A question on your full year guidance. In Q3, your revenueand EBITDA margin came right in the middle of your previous guidance, andlooking at your full year number for the guidance, it seems like the EBITDAmargin guidance is going down. I thinkthat you just mentioned that WebShots was in line with the overall company’smargin. So I wanted to know what’s going on there? Secondly, the kind of success you’re seeing in China,can you name any other countries which are attractive or where you canreplicate similar type of success? Thank you.

I’ll start with the international operations and the successwe’re seeing in China.As I’ve said, Chinais a key market for us. The UKis also a key market for us. On a smaller scale, we’ve seen strong growth inboth France andin Australia.Obviously, many of our leading brands have global footprints and we are excitedto capitalize on strength. Frankly, the larger the market, the more interestingit is for us. So the English language markets and Chinaare the leaders for us. George, do you want to take the guidance question?

I can take that. We believe that the guidance that weprovided for Q4 is appropriate and we’ll operate well within the marginguidance that we provided. It’s the step up in operating expenses from Q3 to Q4is probably what you’re noticing, which is not a reflection or indication ofwhat’s happened with WebShots. But it’s our continued investment program in theinternational business, probably two-thirds of that increase in operatingexpenses from Q3 to Q4 that is implied within our guidance is operatingexpenses that we’ll invest in international. The balance of it is investmenthere in the United States.

Your next question comes from Gordon Hodge - Thomas Weisel Partners.

Intel was out, I think a couple weeks ago, talking aboutincreasing the commitments of their ad budget to online pretty significantlyover the next year or two and then also I think putting a push behind theirIntel Inside co-op money, encouraging that to go online as well. I’m wonderingif you can give us any feel for whether you will benefit from that, based onconversations you have had with them and their partners. Neil, you talked about creating value in using your balancesheet. I’m wondering if you mean by that that you would consider buying backstock or are you more inclined to make acquisitions? If so, are you interestedin boosting traffic, gaining more content, you know, other areas that maybe youcan just give us a sense of what your interests would be from an M&Astandpoint. That would be great. Thanks.

First on Intel, there has been some press about thecontemplated changes in the Intel Inside Program (IIP) and the effect that thatwill have online. It won’t surprise anyone to know that we’ve been closelyengaged with Intel through this entire process, their evaluation of what theywanted the IIP program to look like as well as its direction. It’s a littleearly to call exactly what the impact of that will be, but it will be moreonline advertising by both Intel and the Intel Inside Program dollars. So wewill work diligently over the coming months to capture our fair share of that. The second is about how we intend to use our balance sheetto increase value for our shareholders. Number one, in the context of buildingvalue, our strong preference is to grow. So to the extent that we can findproperties that fit our criteria that either add to what we already have,ideally, which we will continue to do a fair amount of. We’ve been very, verysuccessful with plug-in acquisitions to grow initiatives that we already have,that could get us into a new property or expand in geographies like China. While we don’t have any specific plans to do a sharerepurchase at this point, obviously, we have the financial flexibility to dothat if we decide to in the future. With the M&A market the way it is, in many cases, ourproperties in the collective look very inexpensive in relation to what we seeas acquisition targets. So we consider ourselves in the market for acquisitiontargets and we evaluate our properties the same way. While there are nospecific plans, it is something that we would consider.

Your next question comes from Lev Polinsky – JP Morgan. Lev Polinsky – JP Morgan: First of all, I was wondering, in the past you’ve releasedsome user data ex WebShots, some with. Idon’t know if you’d be able to give some usage trends for your sites, excludingthe impact of WebShots, just to get an idea of it for historical. Secondly, it seems like the bigger growth opportunity atthis point exists internationally than in the US.But at the same time, monetization outside the USseems like it’s not as high as it is maybe in the UK;but beyond that it’s not. Looking at ’08 and beyond in a long-term way, where do youthink monetization for a user outside the UScan be compared to where it is for a user in the US?Do you think it reaches parity eventually, or is it a 50% discount? What areyour thoughts on that? Thank you.

Thanks for the questions. First on our user and usage data,excluding WebShots, on a pure kind of apples-to-apples basis, excludingWebShots and excluding the transition to the platforms outside the US, users inthe third quarter were up a little bit over 10% and page views were basicallyflat. So the second question, our biggest growth opportunities.You’re accurate, international monetization is not currently equivalent to USmonetization. The way we look at international markets is first, the advertisingspend per capita and then secondly, the share of online advertising per capita.You identify appropriately that the UKis the only market outside the USwhere both of those ratios, are higher than in the US. I believe 50% of marketing dollars arespent in the US. So we are still focused -- I should becrystal clear about this -- we are still focused on growing in the United States and still see a large growthopportunity in the US. In terms of monetization, the ability to monetize a user indifferent markets will scale based on frankly, the amount of advertising that’sin that market. So we don’t have any illusions that the value of a Chinese useris going to be anywhere near the value of a USuser in the immediate future, based on the fact that the total advertising piethere is much smaller. So it depends how long you extend your time horizon todecide what you think that total revenue opportunity is, but those are thevariables which we use to determine what the revenue opportunity is.

Your next question comes from Hagit Reindel - Jefferies.

First on guidance, could you just help us understand yournew guidance versus the old and maybe how much of Q4 guidance in the past wascoming from WebShots? Should we think ofa quarterly run rate of about $3 million, the same as it was this quarter, isthat kind of how you saw it? Second, on the international margin, it went down againsequentially this quarter. Was that dueto the three acquisitions that you made that you mentioned or was just themargin lower for some reason? Could youjust give more color on that? Thanks.

First I’ll speak to the revenue guidance for the fourthquarter. Net of all the exited businesses, and to clarify, that’s WebShots thisyear and then earlier this year, we exited several other businesses like Korea,our events businesses outside the USand EDventure, the growth rate is about 8% to 13%. We will release, as we finish the accounting process, we’llrelease the specific WebShots numbers throughout the income statement. But youcan assume that it’s probably on the growth rate, and we won’t project what thefourth quarter of WebShots will actually end up being. The second is why are international margins downsequentially? The fourth quarter is obviously the largest revenue quarter inmost of the markets in which we compete. We’ve been scaling up to realize thatrevenue. That revenue is mildly depressed by some investments in places like Chinaand as you point out, some of the acquisitions which aren’t yet at the marginof the rest of the business. There’s no outlier effect going on ininternational from Q3 to Q4.

Your next question comes from Scott Kessler - Standard &Poor’s. Scott Kessler - Standard& Poor’s : I wanted to explore a little bit further about how you planon leveraging your balance sheet to deliver benefits for shareholders. What Iwanted to know is, Neil, I think you referenced an interest in growth. So arewe looking at more international acquisitions like you’ve been doing? I thinksomeone previously asked about a new category. You’ve emphasized yourcontinuing dedication to the USmarket. Maybe a little bit of detail as to exactly what you plan on doing withwhat just recently now is $250 million in a credit facility and $45 millionplus from the sale of WebShots. That would be appreciated.

Obviously, there is a premium on financial flexibility atany time, and we’ve long held that our balance sheet is a strategic resourceand we’re beginning to demonstrate that. Our absolute goal and focus is onmaking our company more valuable. Our bias is on growing. So we will look tocontinue to make acquisitions and you can expect us to make small acquisitionsin the fourth quarter consistent with what we have done in the past that won’tconsume anywhere near all of those proceeds. But now we have the flexibility to be a player in many ofthe transactions that could come down the pipe. We will focus those on, as Isaid, the areas that present the largest growth opportunity and we willcontinue to be as disciplined as we have been in the past on our expectationsfor return and for contribution to our business. So this really is the realization, this credit facility isthe realization of what was financial flexibility that we already had. Now it’son demand to use when and as we and our board of directors see as appropriate.

Your next question comes from Gordon Hodge - Thomas WeiselPartners.

I don’t know what the basis was on WebShots from a taxstandpoint, I assume that cash, you get to keep most of it? If you could just update us on the status of the search dealthat you have with Google which I believe expires at the end of the year andhow those negotiations might be going? Thanks.

We appreciate your dedication to the fire alarm or whatsounds like a fire alarm in your building. First you’re correct; there will beno tax impact on our sale of WebShots, so that is direct cash on cash to us. The second, on the Google search deal, we’re in the secondyear of a two-year deal so that comes up later this year, and we’ll provide youwith additional information as it becomes available.

Your next question comes from Mark May - Needham & Co. Mark May - Needham& Co.: Thanks. There is no fire here, but I am talking whiledriving a rental car.

That could be dangerous for everybody. Mark May - Needham& Co.: I’m sorry if you’ve touched on this already, but you havethe announcement of the sale of WebShots today. You’ve sold or shuttered a fewother businesses in the last 12 months. Do you have plans for further suchactions of other assets that you have? Is this part of a bigger picturestrategy? How do we tie these assetsales or closures into what your strategy is for the business?

Yes, this is part of a strategy, and that strategy is to be focusedon those areas that present us with the highest potential opportunity in thefuture. We want to concentrate our management, our operation and our financialresources on those opportunities which we believe can deliver the highestgrowth. Our core competence is building leading media brands, and weexpect to be leaders in the markets in which we compete. So yes, we willcontinue this process going forward. There aren’t any immediate plans, butthat’s the filter by which we evaluate each of the properties that we own.

There are no further questions at this time. Do you have anyclosing remarks?

Thank you all for spending some time with us today. As Isaid, this is an exciting quarter for us, as we believe that we’ve madesignificant progress in the transformation of our company. We’re excited forthe new CNET Networks that’s aggressive, bold and entrepreneurial. Thank youfor spending some time with us.