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Monster to pay $225 million for Yahoo's HotJobs site
NEW YORK |
NEW YORK (Reuters) - Monster Worldwide Inc (MWW.N) said on Wednesday that it will buy Yahoo Inc's (YHOO.O) HotJobs site for $225 million in cash, citing an improving job market.
The deal, which comes as the U.S. unemployment level remains around 10 percent, would take Yahoo out of the online recruitment business, leaving Monster with only one major competitor, Careerbuilder.com.
Monster, which controls about one-third of online jobs postings in the United States, does not expect the deal to raise significant issues with antitrust regulators, since HotJobs has a smaller share of the market.
Careerbuilder, owned by U.S. newspaper publishers Gannett Co Inc (GCI.N), McClatchy Co (MNI.N) and Tribune Co (TRBCQ.PK), as well as software maker Microsoft Corp (MSFT.O), has the largest part of the online job ads market.
It is too soon to say whether Monster will cut jobs as a result of the deal, Chief Executive Sal Iannuzzi told Reuters.
The deal comes as the U.S. economy shows signs of recovering from a protracted slump. The government's January jobs data due on Friday is expected to show only the second monthly jobs gain since the recession began in 2007, though the unemployment rate is expected to remain above the key 10 percent level.
Monster's monthly index of online jobs demand weakened in December, suggesting a broad recovery was not yet under way.
Under the terms of the deal, Monster will pay Yahoo $20 million to $31 million a year for Yahoo to redirect traffic to its site.
Yahoo acquired HotJobs in 2002 for roughly $445 million in cash and stock. J.P. Morgan analyst Imran Khan said that unique users on the HotJobs site in December declined 32 percent year over year, in a note to investors citing data from comScore.
Yahoo's sale of HotJobs, which had been rumored for months, is the latest example of the Internet company's reorganization under CEO Carol Bartz who took the helm in January 2009.
Bartz has shed various assets including last month's sale of the Zimbra email business to VMware Inc (VMW.N), and struck a deal to let Microsoft Corp (MSFT.O) handle its site's Internet search technology, in an effort to refocus the company on Internet media and advertising and reignite growth.
Monster also will double the number of newspapers that it works with to about 1,000, Iannuzzi said. Monster and HotJobs each have deals with newspaper websites for displaying online job ads.
The HotJobs deal is expected to close in the third quarter. Monster said the deal will be accretive to earnings next year.
HotJobs generates annual revenue of about $100 million. Monster's 2009 revenue totaled $905 million.
The deal overshadowed Monster's quarterly results, also released on Wednesday. They largely matched expectations.
Monster's net loss came to $2.1 million, or 1 cent per share, matching forecasts. Revenue fell 27 percent to $213 million, slightly ahead of Wall Street expectations. Deferred revenue, which Monster will recognize over a long period, rose 15 percent sequentially to $305 million.
Monster shares were trading at $16.50 after hours, up from their closing price of $16.42. Yahoo was up slightly from the close at $15.50.
(Reporting by Nick Zieminski, additional reporting by Alexei Oreskovic; Editing by Robert MacMillan, Leslie Gevirtz)
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