Sunnyvale, California — Yahoo Inc.’s continued strategy to lighten its corporate load, and as the national unemployment rate continues to remain around 10%, considering this the Web portal has dumped another of its property deemed expendable by CEO Carol Bartz, selling HotJobs to Monster for $225 million.
As part of the deal, the Internet pioneer Yahoo has been reducing costs and improvising its online focus in the face of tough competition from Google and the aftermath of a botched takeover campaign by software giant Microsoft.
According to the terms of the deal, online employment firm Monster Worldwide Inc. would become authorized provider of career and job postings on Yahoo’s home page in the United States and Canada for three years, being paid based on clicks and other “expressions of interest,” Monster said today in a statement.
The company hopes the transaction to close in the third quarter.
Monster will acquire Yahoo HotJobs for $225 million, along with the rights to list job ads on Yahoo’s home page.
Yahoo Chief Executive Officer Carol Bartz has considerably slashed expenses and closed many under-performing 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 is housekeeping step one,” said Colin Gillis, an analyst at BGC Financial LP in New York, who suggests buying Yahoo shares and does not own them. “It is 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.”
“Presenting together Monster and HotJobs creates even greater access and opportunities for both recruiters and job seekers,” said Yahoo executive vice president Hilary Schneider.
“HotJobs with its remarkable customer base plus the traffic agreement are an ideal complement to Monster’s innovative recruitment solutions and global reach,” said Monster chief executive officer Sal Iannuzzi.
Monster expects the acquisition will empower it to offer employers a “significantly larger pool of candidates” given that industry-tracker comScore reported that an average of 12.6 million people monthly visit HotJobs.
HotJobs is bundled with many features and tools designed for people hunting jobs as well as those looking to hire.
“Carol has definitely made a good move in terms of refocusing Yahoo,” said Aaron Kessler, an analyst with Kaufman Brothers LP, who recommends buying the stock and does not 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 remittances 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 deal solidifies Monster’s position to include high-quality, relevant job seekers efficiently, while at the same time significantly expanding our customer base,” Iannuzzi, said in a conference call.
Yahoo has been shutting down and selling various units as part of an effort to regain focus on traditional Web content like news and entertainment. HotJobs has long been on the chopping block at Yahoo, which has sold properties such as Zimbra amid a focus on Yahoo’s “core” assets as determined by Bartz: content and technology.
Yahoo in 2002 purchased HotJobs for about $436 million. The business, the No. 3 U.S. career and development site, recorded 11.1 million visitors 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.