S&P upgrades CNET

Standard & Poor's said it raised CNET Networks Inc.'s corporate credit, senior unsecured debt and senior unsecured debt ratings to B from B- and raised the subordinated shelf debt rating to CCC+ from CCC. The outlook is positive.

S&P said the upgrade reflects improving business and financial performance driven by strong Internet ad demand. For the year ended Dec. 31, total revenues increased 21% over 2004, EBITDA margin increased to 19.3% from 12.2%, lease-adjusted EBITDA coverage of interest increased to 5.8x from 2.6x and lease-adjusted total debt to EBITDA decreased to 3.1x from 5.1x.

The ratings reflect the company's dependence on online advertising, vulnerability to the financial health of the consumer electronics niche, acquisition-oriented growth strategy and high financial risks, the agency said. These risks are only slightly offset by CNET's position as a leading publisher of consumer electronic product reviews and the currently strong Internet ad demand.

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