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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

         (Mark One)

            [X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2005

OR

            [    ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________to _________

Commission file number 0-20939

CNET Networks, Inc.
(Exact name of registrant as specified in its charter)

Delaware                                                                         13-3696170
(State or Other Jurisdiction of Incorporation or Organization)         (I.R.S. Employer Identification Number)

235 Second Street, San Francisco, CA 94105
(Address of Principal Executive Offices including Zip Code)

Telephone Number (415) 344-2000
(Registrant’s telephone number, including Area Code)

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [     ]

         Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES [X] NO [      ]

         As of April 29, 2005 there were 145,743,196 shares of the registrant’s common stock outstanding.

CNET NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)

See accompanying notes to the condensed consolidated financial statements.

CNET NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)

See accompanying notes to the condensed consolidated financial statements.

CNET NETWORKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

See accompanying notes to the condensed consolidated financial statements.

CNET NETWORKS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005

(1) BASIS OF FINANCIAL STATEMENTS

BUSINESS AND BASIS OF PRESENTATION

CNET Networks, Inc. (“CNET Networks”) is a worldwide media company and creator of content environments for the interactive age. CNET Networks operates websites, each with its own distinct brand, in three content categories: personal technology, games and entertainment, and business technology. The personal technology category is anchored by brands such as CNET.com, Download.com, and Webshots. The games and entertainment category primarily consists of the GameSpot and MP3.com brands. Industry leading brands such as ZDNet, TechRepublic, News.com and Release 1.0 are components of the business technology category. CNET Networks was incorporated in the state of Delaware in December 1992.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, considered necessary for a fair presentation of the financial condition, results of operations and cash flows for the periods presented. These condensed financial statements should be read in conjunction with the audited consolidated financial statements included in CNET Networks’ most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, which contains additional financial and operating information and information concerning the significant accounting policies followed by CNET Networks.

The condensed consolidated results of operations for the three months ended March 31, 2005 are not necessarily indicative of the results to be expected for the current year or any other future period.

CONCENTRATION OF CREDIT RISK

There were no revenues exceeding 10% of total revenues for the three months ended March 31, 2005. Revenues from Google Inc. approximated 12% of total revenues for the three months ended March 31, 2004.

BARTER

CNET Networks trades advertising on its Internet sites in exchange for marketing services of other companies, referred to as “barter revenue”. These revenues and marketing expenses are recognized in the period in which the advertisements are delivered based on the fair market value of the services delivered. CNET Networks determines the fair market value of the service delivered based on amounts charged for similar services in non-barter deals within the previous nine-month period. For both of the three-month periods ended March 31, 2005 and 2004, approximately $2.9 million of our revenues were derived from barter transactions.

INCOME TAXES

CNET Networks records a tax provision for the anticipated tax consequences of the reported results of operations. In accordance with SFAS 109, “Accounting for Income Taxes”, the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for the operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. CNET Networks records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Management believes that sufficient uncertainty exists regarding the future realization of deferred tax assets and, accordingly, a full valuation allowance has been provided against net deferred tax assets. Tax expense has taken into account any change in the valuation allowance for deferred tax assets where the realization of various deferred tax assets is subject to uncertainty.

In February 2005, CNET Networks and the Internal Revenue Service reached an agreement whereby $173.6 million of net operating losses, which were under review by the IRS, were deemed allowable for carryforward. Accordingly, an additional net deferred tax asset of $57.2 million was recorded in the first quarter of 2005 against which a full valuation allowance has been provided. At March 31, 2005, CNET Networks has U.S. federal and foreign net operating losses available for carryforward totaling $519.1 million, consisting of U.S. net operating losses of $398.6 million and of cumulative foreign net operating losses of $120.5 million.

IMPAIRMENT OF GOODWILL, LONG-LIVED AND OTHER ASSETS

Long-lived assets, such as property and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted (and without interest charges) future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Under Statement of Financial Accounting Standard (SFAS) 142, “Goodwill and Other Intangible Assets,” goodwill is to be tested for impairment at least annually. Intangible assets with definite useful lives will continue to be amortized over their respective estimated useful lives.

Goodwill of a reporting unit is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of its goodwill may not be recoverable. Impairment of reporting unit goodwill is evaluated based on a comparison of the reporting unit’s carrying value to the implied fair value of the reporting unit. Conditions that indicate that impairment of goodwill should be evaluated include a sustained decrease in our market value or an adverse change in business climate. CNET Networks reviews goodwill for impairment on at least an annual basis. CNET Networks has established August 31 as the valuation date on which this annual review takes place.

CNET Networks has an investment in a privately held company comprising approximately 19% of that company’s equity. This investment has historically been accounted for using the cost accounting method. During the first quarter of 2005, CNET Networks provided additional debt financing to this company, and determined that it should use the equity method of accounting for this investment beginning in the first quarter of 2005. This change to the equity method of accounting resulted in a charge of $183,000 to record CNET Networks’ share of in-process research and development associated with this investment. This charge is included in cost of revenues. For as long as this investment qualifies for the equity method of accounting, CNET Networks will be required to record its share of this company’s net income (loss).

STOCK-BASED COMPENSATION

CNET Networks accounts for its stock-based employee compensation plans using the intrinsic value method. As such, compensation expense is recorded on the date of grant if the current market price of the underlying stock exceeds the exercise price. The compensation expense is recorded over the vesting period of the grant.

As allowed under SFAS 123, “Accounting for Stock Based Compensation”, CNET Networks applies APB Opinion No. 25 in accounting for its stock-based compensation plans and, accordingly, no compensation cost has been recognized for the plans in the financial statements because options are granted at the current market price. Had CNET Networks determined compensation cost based on the fair value at the grant date for its stock options under SFAS 123, CNET Networks’ net income (loss) and net income (loss) per share would have been adjusted to the pro forma amounts indicated below:

SFAS No. 123 does not apply to awards prior to 1995. The weighted-average fair value of options granted in the three months ended March 31, 2005 and 2004 was $9.83 and $10.01, respectively. The fair value of each option grant is estimated on the date of grant using the Black Scholes option-pricing model with the following weighted-average assumptions used for grants:

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued Statement 123R, “Share-Based Payment”, which will require all companies to measure compensation cost for all employee share-based payments at fair value. This statement was to be effective for public companies for interim or annual periods beginning after June 15, 2005. On April 14, 2005, the SEC adopted a new rule that amends the compliance dates for implementation of FAS 123R. The SEC’s new rule allows companies to implement Statement 123R as of the beginning of their next fiscal year, which for CNET Networks would be January 1, 2006. The statement eliminates the alternative to use the intrinsic value method of accounting under APB Opinion No. 25 that was allowed under the original provisions of Statement 123. Since we currently report share-based compensation using the intrinsic-value method, the adoption of this standard will have a significant impact on the consolidated statement of operations as we will be required to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. The stock-based compensation disclosure within this note sets out the impact of using fair value accounting for share-based payments for the three months ended March 31, 2005 and 2004. However, the amounts disclosed within our footnote are not necessarily indicative of the amounts that will be expensed in future periods upon the adoption of Statement 123R as those amounts will vary with the level of equity instrument awards and the grant-date value of those awards. Additionally, upon implementation of Statement 123R, we may choose to use a different valuation model to value the compensation expense associated with employee stock options. We are still evaluating the provisions of Statement 123R.

In March 2004, the FASB issued EITF Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”, which provides new guidance for assessing impairment losses on debt and equity investments, as well as new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB delayed the accounting provisions of EITF Issue No. 03-1; however, the disclosure requirements remain effective and have been adopted for our year ended December 31, 2004. We will evaluate the effect, if any, of EITF No. 03-1 when final guidance is issued.

(3) ACQUISITIONS

On January 14, 2005, CNET Networks acquired Collaborative Content LLC which operates the website at www.tvtome.com (Collaborative Content LLC and TVTome, collectively known as “TVTome”). TVTome’s website provides episode guides for almost all the current and for many of the classic television shows. Under the terms of the agreement, CNET Networks paid a total of $5.0 million of which $2.0 million is deferred consideration payable in two years bearing interest at a rate of 3.0% per year. The $3.0 million of consideration paid at closing was paid in cash and there were approximately $160,000 of direct acquisition costs.

Under the purchase method of accounting, the total purchase price as of the date of acquisition has been allocated to assets and liabilities based on management’s preliminary estimate of fair value. The preliminary estimated fair values of the assets acquired in the TVTome acquisition is $141,000 of receivables and $572,000 of amortizable intangibles. The intangibles, with a weighted average life of approximately three years, consist of content, existing relationships, tradenames, and a noncompete agreement. The excess of the purchase consideration over the fair value of the net assets acquired has been allocated to goodwill. A preliminary estimate of $4.5 million has been allocated to goodwill, and is deductible for tax purposes. Goodwill will not be amortized and will be tested for impairment at least annually. The preliminary purchase price allocation for TVTome is subject to revision as more detailed analysis is completed and additional information on the fair value of the assets becomes available. Any change in the fair value of the net assets of TVTome will change the amount of the purchase price allocable to goodwill. The results of TVTome’s operations have been included in CNET Networks’ statement of operations from the date of acquisition.

(3) GOODWILL AND INTANGIBLE ASSETS

Acquired Intangible Assets. The following table sets forth the amount of intangible assets that are subject to amortization, including the related accumulated amortization: