Because it was the dot-com boom, and what was better than one dot-com? TWO!

But yeah, they then proceeded to put everything under .com.com, so they had news.com.com, cnet.com.com etc. It was painfully stupid.

I believe the justification was so they could use unified cookies across all their properties -- they set the cookie for "com.com", and then it was available to news.com.com, search.com.com, downloads.com.com, etc., in the same way that yahoo.com cookies are available to news.yahoo.com, sports.yahoo.com, etc.