Updated from 8:04 PM ET March 9.
Chairman and CEO Halsey Minor is leaving the company he founded seven years ago to start -- what else? -- an Internet incubator, several sources close to Minor say. He'll join Eric Greenberg, founder of Web consultants
, to form
, a services firm that will help entrepreneurs get their new businesses off the ground.
, the high-powered venture firm that was an early backer of
, is an investor in Twelve, which has yet to publicly announce its plans.
Minor and Greenberg, both 35, are two of the most successful entrepreneurs in the Internet industry. But Minor's departure from CNet, a "destination" Web site for all kinds of technology-oriented information, marks a considerable blow to investors and to the young company, even as it branches out into new services. Late Thursday, CNet named Vice Chairman Shelby Bonnie its CEO, replacing Minor, who will remain chairman and will stay actively involved in providing strategic direction.
These include the recent $700 million acquisition of shopping "bot" Web site
, as well as a new unit that provides data services to other businesses. As the founder and constant public face for CNet, Minor has risen in lock step with his company.
"He is key," said one Wall Street analyst who has followed the company in the past. "He's the centerpiece. If I were an investor, I would read this as his saying he doesn't think CNet is a very good place to grow young companies. If I were a hedge fund manager," the analyst said Thursday, "I'd be putting you on hold to short the stock."
Shares of CNet have been holding up rather well, at least for an Internet
company focused on consumers. At Thursday's close of 68 7/8, up 7% for the day, CNet's shares are up 21% year to date, giving the company a market capitalization of $5 billion. CNet also has the distinction of having been profitable, at least before embarking last year on a $100 million marketing campaign to attract more traffic to its sites, which include the tech information site
, an authoritative source of tech industry news. Gross profits in the fourth quarter amounted to 61% of CNet's $38.3 million in revenue. The ad blitz gave CNet $39.2 million of operating losses in the fourth quarter.
Meanwhile, word of Minor's departure is beginning to spread through the venture capital community in Silicon Valley, which seems to spend as much time these days chattering about those upstart incubators as it does about who's backing what deal.
Greenberg, who recently stepped down as chairman of Scient, confirmed that he is launching a new company to nurture start-ups, but declined to identify his partner in the venture. And he's not wild about the term "incubator." "This is not an incubator," said Greenberg. "We build businesses. We do not incubate them."
You can understand why he might want to distance Twelve from the incubator fad, which has taken on
-like proportions in high-tech finance. "There's enough noise out there right now," Greenberg said. "Most of the other people have never built businesses."
Indeed, the tech world is getting crowded with business incubators. On Thursday, a group of
, an incubator focused on wireless Internet technologies. Other new and existing incubators include
, started by
founder Sky Dayton and ex-
Internet chief Jake Weinbaum;
, begun by software executive Andrew "Flip" Filipowski; and
, headed by entrepreneur Bill Gross.
Greenberg and Minor clearly have high hopes for their venture, however. According to a source close to the company, they chose the name Twelve for two reasons. "First, it sounds cool," he said. "And also, on a scale of one to 10, their companies will be 12s."
Adam Lashinsky's column appears Tuesdays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at
Jennifer Friedlin contributed to this report.