This morning we were wading through the 3,000 word letter from Carl Icahn when the news flashed across our screens that CBS had agreed to buy CNET for a staggering $1.8 billion, a 45 percent premium from where the shares were trading before the news. Our first thought was that this must be a very good day for the folks over at Jana Partners, Spark Capital Sandell Asset Management Corp, the hedge funds that have been agitating for changes at CNET for months. Our next thought: how the Hell can CBS justify that kind of valuation?

“It’s like taking a street hooker to the Ritz when she’ll settle for an alley,” one internet insider told us.

That’s entertaining if not very enlightening. CNET has been a struggling brand for ages. The argument of Jana Partner’s was that CNET could be saved from oblivion if the management got serious about cutting costs and revving up its online ad revenue by using a third party like Google’s DoubleClick. CBS doesn’t seem to be seriously considering either, according to published statements.

There doesn’t seem to be much synergy between CBS and CNET. But Les Moonves sounds very excited about the deal because it gives CBS a “totally a great new distribution system.” Peter Kafka has a great summary of the conference call but nothing in it persuades us that this is anything but eyeball valuation, 1999-style.

CBS Buying CNET For $1.8 Billion; CBS Predicts $1 Billion Interactive Revenues By 2010 [Alley Insider]

Tech Sociologist David Weinberger, author of “Everything is Miscellaneous” gives us a good old fashioned July 4 call for deregulation, or “delamination” of the major telco carriers. In the essay “Delamination Now: How to Keep the Internet the Way of the Princess Phone,” Weinberger argues that the behavior of the carriers violates Net Neutrality and allows the carriers to turn the internet into cable TV. Net Neutrality is anathema to the carrier business model (using enormous government subsidies and monopoly status to turn a profit), and the carriers are spending $1.4mm a week lobbying against it.

Weinberg argues that even if Net Neutrality laws are pushed through Congress, the carriers will ignore most restrictions, much like any part of the Telecom Act of 1996 the carriers didn’t like, all while eating up generous subsidies. Anyone remember the $200bn the carriers used to build a fiber optic network?

Turning the internet into cable TV is a bad thing. Imagine AT&T asking Google to pony up some cash so that its search results are delivered as fast as Yahoo’s, not delivering movie downloads of a Hollywood studio that won’t pay an extra fee, or billing users a premium rate for accessing some websites over others.

Weinberg’s solution is to open the whole thing up again, and force the carriers to open their infrastructure to ISPs. This will enforce a dual layer structure where the ISPs will pay wholesale rates to the carriers and the ISPs will provide retail service, opening up bit by bit connection competition. Net-topia is a short jump away, from Weinberg’s essay:

Of course, these ISPs are likely going to use cables already laid by the incumbent carriers (heavily subsidized by taxpayers, by the way). For this the carriers deserve to be compensated at reasonable rates. That’s the way it was until the Supreme Court decided that it was unfair to the poor carriers.

Companies trying to sell us professional content — think Hollywood — will still be able to, of course. They’ll have the same access to the Internet as the rest of us. So, if a movie studio does a deal with a cable company to offer us a package deal that gives us ten of their movies for free every month as well as low-cost telephony, they certainly can. They just won’t be able to torque the Internet so that it works better for their services than for their competitors. Welcome to capitalism, boys!

This all sounds great in theory, but would require a complete paradigm shift away from Congress thinking the internet is a series of tubes, and the Telco companies getting some of the most egregiously favorable Congressional treatment out of any industry. Any measure that calls for “an engaged citizenry” is most often doomed to be wishful thinking.

Weinberger: Delaminate the bastard telcos! [BoingBoing]
Delamination Now!

Kevin Ham is one of the world’s most successful “domainers,” or people who have profited from buying up internet domain names. His websites get over 30 million hits a day and are worth over $300mm in aggregate. Kevin is also a Christian, and wants you to know he’s a Christian. Kevin is so Christian, that many of his most valuable domain names are rooted in Christian mythology (god.com, satan.com, christianrock.com (Jars of Clay is mythically bad)). Kevin is so Christian that he steers most business conversations back to the Bible. Kevin is so Christian that he’s made a fortune through teaming up with the government of Cameroon to exploit the “cm” instead of “com” typo and registered most of his domain names using registration spamming software and by exploiting a free registration loophole. It is god’s work, after all. From CNN Money:

Working mostly as a solo operator, Ham has looked for every opening and exploited every angle — even inventing a few of his own — to expand his enterprise. Early on, he wrote software to snag expiring names on the cheap. He was one of the first to take advantage of a loophole that allows people to register a name and return it without cost after a free trial, on occasion grabbing hundreds of thousands of names in one swoop.

And what few people know is that he’s also the man behind the domain world’s latest scheme: profiting from traffic generated by the millions of people who mistakenly type “.cm” instead of “.com” at the end of a domain name.
…
The difference is that hardly any .cm names are registered, and the letters are just one keyboard slip away from .com, the mother lode of all domains. Ham landed connections to the Cameroon government and flew in his people to reroute the traffic. And if he gets his way, Colombia (.co), Oman (.om), Niger (.ne), and Ethiopia (.et) will be his as well.

The man who owns the Internet [CNN Money]