Updated from 12:45 p.m. EDT

CBS ( CBS) reached an arrangement to acquire Internet company CNET Networks ( CNET) in a $1.8 billion deal.

Media giant CBS said it will pay $11.50 for each share of CNET. The acquisition, CBS said, will make it one of the top 10 Internet companies in the U.S., with a combined 54 million unique users a month and approximately 200 million users worldwide.

Based in San Francisco, CNET Networks owns a number of entertainment, news and information sites, including CNET, ZDNet, GameSpot.com, TV.com, mp3.com, Search.com, BNET, MySimon and TechRepublic. The company, which had 2007 revenue of $406 million, also has a large international presence, particularly in China.

Shares of CNET jumped $3.46, or 43.5%, to $11.41 Thursday. The stock closed Wednesday at $7.95, and it has traded in a range of $6.47 to $9.88 in the past year. CBS, based in New York, was off 2.4% to $24.23.

CBS Looking for Clicks in All the Wrong Places

Research firm Cowen said the acquisition could end up being dilutive to shares of CBS. The firm believes CBS investors would have rather seen the $1.8 billion that's being paid to CNET instead used toward dividends or buybacks. Cowen maintained an underperform rating on CBS.

Stanford, another research firm, said it views the offer as fair and as a good acquisition for CBS. The firm also thinks CNET's sale and Microsoft's ( MSFT) withdrawn bid for Yahoo! ( YHOO) could foretell a new round of Internet advertising consolidation, suggesting targets could include SourceForge ( LNUX), The Knot ( KNOT) and ValueClick ( VCLK).
This article was written by a staff member of TheStreet.com.

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