Friday, 5 February 2010

Yahoo to sell HotJobs to Monster

Yahoo! Inc plans to sell its HotJobs employment Web site to Monster Worldwide Inc. for $225 million in cash as the company focuses on its traditional properties, including the home page.

As part of the sale, Monster will become the provider of career and job content on Yahoo’s home page in the US and Canada for three years, Monster said today in a statement. The company expects the transaction to close in the third quarter.

Yahoo Chief Executive Officer Carol Bartz has reduced expenses and shuttered underperforming businesses, such as the GeoCities Web-hosting site. In July, she struck a deal with Microsoft Corp. to collaborate in Web search and advertising, cutting engineering and capital costs.

“It’s housekeeping step one,” said Colin Gillis, an analyst at BGC Financial LP in New York, who recommends buying Yahoo shares and doesn’t own them. “It’s the first part of the non-core divestitures that the company and management has to go through. The real notable part is it took a year to get this done.”

Yahoo paid about $436 million for HotJobs in 2002. The business, the No. 3 U.S. career and development site, had 11.1 million users in December, down 22 percent from a year earlier, according to ComScore Inc. in Reston, Virginia. Monster, ranked No. 2, had 16.5 million users in December, down 10 percent from a year ago. CareerBuilder ranked first.

Last month, Yahoo agreed to sell Zimbra, an e-mail and online collaboration unit, to VMware Inc. for an undisclosed amount.
Yahoo, based in Sunnyvale, California, paid $350 million for Zimbra in 2007.

‘Refocusing Yahoo’
“Carol has definitely done a good job in terms of refocusing Yahoo,” said Aaron Kessler, an analyst with Kaufman Brothers LP, who recommends buying the stock and doesn’t own it. “Whether longer-term they can really turn around the core growth is another issue.”

With the three-year agreement, Monster will make annual payments to Yahoo, based partly on traffic from users, Monster said.

In addition, the company will be able to pursue similar agreements in areas outside of Canada and the U.S., including Europe and Asia. New York-based Monster also will expand its network of newspapers with the addition of HotJobs, which has more than 600 newspaper partners.

“Essentially, the transaction positions Monster to add high-quality, relevant job seekers efficiently, while at the same time significantly expanding our customer base,” Sal Iannuzzi, CEO of Monster, said in a conference call.

Yahoo rose 29 cents to $15.46 today on the Nasdaq Stock Market. The shares have fallen 7.9 percent in 2010. Monster, down 5.6 percent this year, climbed 38 cents to $16.42 on the New York Stock Exchange.

“HotJobs and Monster believe the transaction will benefit job seekers and recruiters alike by allowing them to have access to a larger and more diverse pool of job seekers and recruiters,” Yahoo said in an e-mailed statement.