Updated from April 14

Shares in CNet Networks ( CNET) slid 14% early Thursday after the company's guidance fell short of Wall Street expectations.

Fueled by online advertising growth, the San Francisco company cut its losses in the first quarter.

The operator of online sites devoted to technology and interactive gaming reported an operating loss of $5.7 million in the first quarter ended March 31, compared to a loss of $14.6 million in the first quarter of 2003.

Revenue for the first quarter was $63.4 million, up 12% from the year-earlier number and ahead of the Thomson First Call consensus of $61 million.

Based on generally accepted accounting principles, CNet reported first-quarter net income of $2.9 million, or 2 cents per share, compared with a net loss of $15.8 million, or 11 cents per share, one year earlier.

CNet said the most recent quarter's EPS got a 4-cent boost from "unusual items," including an $8 million gain on the sale of investments and a $1.7 million foreign currency gain linked to fixed assets in Switzerland.

But even after subtracting the 4 cents to arrive at an adjusted 2-cent-per-share loss, CNet edged past the consensus estimate of a 4-cent-per-share loss.

Online advertising revenue in the first quarter grew 35% from year-earlier figures, according to TheStreet.com's calculations, from $35.7 million to $48.2 million.

CNet also made gains in licensing its product database, online content and subscriptions to online services and other paid services.

The company operates such online properties as CNet, ZDNet, TechRepublic and GameSpot, and publishes the print magazine Computer Shopper.

"During the first quarter, our core Interactive business continued on its strong growth trajectory, with all key metrics trending ahead of our expectations, including strong organic growth in revenue, improved margins, and growth in unique users," CEO Shelby Bonnie said in a statement.

CNet raised guidance for full-year 2004, estimating full-year revenue to be in the range of $275 million to $285 million, straddling the consensus figure of $279 million. Operating income before depreciation and amortization, says CNet, will fall in the range of $30 million to $32 million, compared to the consensus of $31 million.

Second-quarter revenue is forecast in the range of $65.5 million and $67.5 million, again surrounding the consensus. Operating income, before depreciation and amortization, will be in the range of $3.5 million to $4.5 million, short of the First Call consensus of $5.4 million.

In the second quarter, CNet plans to launch two music-related products. One will be devoted to free, artist-authorized digital downloads, while the other, MP3.com, will be a music information site.

On Thursday, CNet slipped $1.67 to $10.55. The stock's price has more than tripled from where it was one year ago.

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