Despite CNET’s unexpected legal setback last week in their fight against what is now their largest stockholder (a consortium of investors led by Jana Partners), the board and management team continue to fight on. Previous meetings between Jana and the CNET board were already “tense and uncomfortable.” I can only imagine they’re getting more so.
So far, the Jana consortium has not demanded an ouster of CNET CEO Neil Ashe as part of their proposed reforms of the ailing company. But that may be changing, says a source close to the drama. “Jana’s patience with Neil has run out, they’re now looking to get rid of him,” said the source. When a company’s biggest stockholder (holding nearly 25% of the outstanding stock) wants you to resign as CEO, it becomes difficult to both fight for your job and simultaneously “maximize shareholder value.”
If Ashe is forced out, who might step in as CNET’s CEO?
There are no shortages of rumors here, either. One insider says former CEO Shelby Bonnie may be right for the job. Bonnie resigned as CEO in October 2006 following an options backdating scandal. Later, though, the SEC completely exonerated Bonnie and CNET and dismissed the charges. He is still a major shareholder in CNET and owns about 7% of the outstanding stock. And so far Bonnie hasn’t taken a side in the fight – most other major shareholders are backing current management.
Bonnie, however, has moved on to his new venture, PoliticalBase, and hasn’t shown any outward desire to return to CNET.
Another name that has come up as a possible CEO candidate is Dan Rosensweig, the former COO of Yahoo and who’s currently a partner at private equity firm Quadrangle Group. Rosensweig was formerly the President of CNET, a position he took on following the merger of ZDNet and CNET in 2000. Rosensweig would likely be interested in the job, said someone who’s familiar with the situation, but only if the board of directors invited him to come on board. From what we hear, the Jana consortium might also be interested in pushing him as an alternative to Ashe.
Rosensweig would find himself in a familiar situation. Not only did he previously work at CNET, his right hand Editor-In-Chief at ZDNet, Dan Farber, recently took the top spot at CNET News as well. They remain friends – when Rosensweig left Yahoo, he only gave one personal interview - to Farber. Perhaps they’ll get the old band back together for an encore.