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The arguments that CNET’s (CNET) board should retain its current management went away today when the company announced it Q1 results.

Total revenue was up a very modest 3% to $91.4 million. Non-GAAP operating income before depreciation, amortization, stock compensation expense, restructuring charges and stockholder proposals and stock option investigation related costs, net, was $1.7 million compared to $11.0 million during the first quarter of 2007.

CNET’s revenue is not growing as fast as internet advertising in general. That is almost impossible to explain given management’s argument that it has some of the best online content destinations in the world. CNET claims that its unique users are 161.3 million up from 143.7 in the same quarter a year ago. Average daily pages-views rose from 81.2 million last year to 89.7 million in the most recent period. In other words, CNET is getting a much smaller yield from its page-views and visitors than it was a year ago.

The company’s guidance was equally dismal. Revenue in the second quarter is expected to move up only 6% to 10%. On an EPS basis the company says it will breakeven.

Management views its financial performance as an improvement. With the figures from Q1 and CNET’s outlook, that can’t be supported.

Douglas A. McIntyre