CNET Q1: Weak Outlook Won't Satisfy JANA

Tech publisher CNET, under siege from a hedge fund looking to invade the board and replace management, reported a narrower quarterly loss of $6 million, compared to $9.1 million a year ago, and revenue of $91.4 million, up from $89.1 million last year.

Revenue came in under Wall Street's average estimate of $93.4 million, but EPS of $0.04 met estimates and the stock traded up $0.24 to $7.75 in after-hours trading.

In addition to earnings, the company detailed its 3-year content and advertising deal with Yahoo, which will add an estimated $100 million in incremental revenue over the life of the deal. The deal pays CNET a license fee for its content on Yahoo's tech sites, and allows Yahoo to sell display inventory across CNET.

Despite the added revenue, CNET didn't raise guidance for the year ($440 to $460 million in revenue), a move Ashe described as "prudent" given CNET's considerable restructuring costs and weakness in media and entertainment advertising. In addition, revenue from the deal is heavily weighted toward 2009 and 2010.

A key criticism from JANA & Company, the shareholder looking to replace management, was that CNET maximize ad revenue by outsourcing to an ad platform such as Google's DoubleClick.

Ashe described Q1 ad sales as "light," but insisted that pricing remains strong, though volume is lower. US media revenue was $69 million in the quarter, down from $71.2 million last year, but offset by slightly higher international revenue.

CNET's operating loss for the quarter was $18 million, including a $5.1 million restructuring charge related to the firing of 120 employees, about 10% of CNET's US workforce. CNET also reported $2 million in costs related to "stockholder proposals," -- money spent on lawyers, IR specialists, etc. in an attempt to repel JANA and company.

For the second quarter, CNET's projected revenue is on the light side between $100 million to $104 million; Wall Street was looking for $103.4 milion.