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Editor's note: This Stocks Under $10 alert was originally sent to subscribers Nov. 7 at 8:32 a.m. EST. It's being republished as a bonus for and readers. Frank Curzio heads Stocks Under $10 Investment Team.

Navigating the slew of consumer electronics products and new technologies can be daunting, but

CNet Networks'

(CNET) - Get ChinaNet Online Holdings, Inc. Report

group of Web sites can offer a useful roadmap to information and trends.

Right now, however, CNet investors increasingly find themselves without any reliable navigational tool for the stock, as poor management decisions and increasing competition continue to push it lower.

The Internet media company's list of Web sites falls into three key segments: technology information, which includes, CNet Download and CNet News; games and entertainment, which includes GameSpot, and MP3 brands; and the business community, which includes ZDNet, TechRepublic and BNet. These are just part of the company's family of sites, which target a wide audience.

However, shares of CNet, which closed Monday at $8.85, are down more than 45% from their 52-week high set in early January, and the stock is on our

Stocks Under $10 Watch List.

We recognize that all is not well for CNet, but a look further down the road shows there may be some light at the end of this bumpy route.

The decline in CNet's share price can be attributed to several recent strikes against the company.

On Oct. 11, CNet confirmed that it had backdated options grants, and based on that finding, CEO Shelby Bonnie resigned. The options backdating that CNet has been cited for occurred between 1996 and 2003, so it could take some time for the company to restate results.

Also, the company preannounced that third-quarter earnings and full-year guidance would be below estimates.

On Oct. 23, CNet reported some third-quarter results but did not release operating expenses, operating income, net income or earnings per share.

For the quarter, the company posted revenue of $92.8 million, which was in line with its previous lowered guidance.

However, CNet said that page views declined 13% year over year, mostly because of weakness in its tech and gaming segments. This marked the fifth consecutive quarter of page-view deceleration for the company.

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While concerns regarding CNet's slowing growth in page views are warranted, we believe the trend could reverse itself as the holiday season approaches and shoppers seek information on the latest gadgets.

CNet should also benefit as


(MSFT) - Get Microsoft Corporation (MSFT) Report

begins spend advertising dollars on its Vista operating system.

In addition, with two new gaming consoles --



PlayStation 3 and



Wii -- set to hit the market in just a few weeks, CNet's gaming sector should benefit.

Another positive for CNet is that renewal rates remain strong.

CNet does business with 57 of advertising magazine


2006 ranking of the top 100 advertisers, based on spending. Management said on its conference call that 96% of CNet's top 100 advertisers renewed contracts from the previous quarter, which we believe is a catalyst for CNet shares.

This should come as no surprise, because CNet attracts more than 125 million monthly unique visitors worldwide through its portfolio of Web sites, according to the company. Advertising represents roughly 80% of CNet's total revenue, so strong unique visitor traffic is essential to the business.

Nevertheless, despite those pluses, the overall risk/reward scenario for CNet is still only average.

There's no question that the departure of Bonnie -- one of the founders of the company -- is a negative. In addition, the lack of financial information at this time leaves us with only a partial picture of the company, and unable to come up with an accurate valuation.

Also, technology blogs seem to be popping up on a daily basis and are taking traffic away from CNet.

We believe most of these risks are already factored into the stock price. However, because CNet's options investigation -- with eight years of accounting in question -- could take a while to sort out, we do not see much upside to the share price at the current quote anytime soon.

Given CNet's large number of monthly unique viewers, we believe shares do have limited downside, but we prefer to wait on the sidelines until the options and earnings picture becomes a little clearer.

In keeping with TSC's editorial policy, Frank Curzio doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Frank X. Curzio is a research associate at, where he works closely with Jim Cramer and and writes Stocks Under $10

. Previously, he was the editor of The FXC Newsletter and senior research analyst for Greentree Financial, and passed his Series 7, 63 and 65. He appreciates your feedback;

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to send him an email.