CBS buys CNet for $1.8 bln

It's been a couple years since Quincy Smith joined CBS. At the time, many people thought he'd go on an acquisition spree, given his background as an Allen & Co. investment banker whose worked on deals such as Advertising.com's sale to AOL and del.icio.us sale to Yahoo. Since joining CBS, he's been behind the $5 million purchase of WallStrip last year as well as the $280 million purchase of Last.fm.

But many observers have been waiting for something bigger. Well, here it is. CBS valued CNet at $11.50 per share. That's a 45% premium above CNet's shares yesterday. CBS paid a multiple of 19 times 2008 cash flow (EBITDA) and 13 times 2009 cash flow. By comparison, Google is tradig at 19.7 times 2008 cash flow.

So, has Quincy lived up to his goals he shared with me back in November 2006? Here's what he said to me while I was at MarketWatch.

"When I asked Smith whether he's looking for technology or eyeballs, he said that he's more inclined to take a closer look at technologies and platforms that help to deliver content or advertising, or even video search technologies. Smith would not disclose how much CBS has set aside for acquisitions, when I asked him if CBS would pay $1 billion for Facebook. "Facebook has a fantastic group of guys," he said, underscoring Facebook's ability to understand the Internet generation and the type of programming that might be popular. "I won't rule anything out," he added. "We could do a huge content deal... [but] it's all theoretical."

Smith said that communities/social networks are increasingly core to any media company and that CBS wants to either buy, build or partner to establish communities online. To be sure, Smith is looking for young companies. (Aren't all media companies?) "While you're talking to a reformed investment banker, there are a lot of things we can do with commercial relationships," he said. "I'm not inclined to buy a YouTube, unless they're six guys and a dog who would appreciate working on building a platform."

(Editor's note: We'll be having Mike Marquez, VP of corporate strategy at CBS Interactive, as our guest host on Vator Box. Watch for that episode in a couple weeks.)