Yahoo Wins Bid to Acquire HotJobs.com
Yahoo Inc. on Thursday agreed to acquire HotJobs.com, the nation’s second-largest online job search firm, in a $436-million deal that is expected to raise the competitive stakes in the fast-growing field.
Yahoo’s bid proceeded after TMP Worldwide Inc., parent of industry-leading Monster.com, refused to increase a competing bid for HotJobs.com.
The deal gives Yahoo, the Sunnyvale, Calif.-based Web portal, another vehicle beyond advertising to help it climb out of a yearlong financial slump, analysts said. It also would solidify HotJobs’ No. 2 ranking. HotJobs remains unprofitable and had lost $21.2 million during the first three quarters of this year. Yahoo’s revenue is expected to be down 37% in 2001.
But the deal is not likely to threaten Monster.com’s lead any time soon in the $1-billion Internet job-posting field, analysts said.
“Monster is not about to be knocked off its pedestal as the No. 1 player by this,” said John Corcoran, an Internet and digital new media analyst for CIBC World Markets. “By a wide margin, Monster will lead in revenues, job postings and resumes.”
But, Corcoran said, Yahoo’s big international presence can help HotJobs expand its reach. Yahoo’s own large database of users can become a big source for new resumes.
Corcoran added that the synergy with Yahoo’s advertising, e-recruiting, corporate portal and data-mining efforts can help HotJobs reduce its marketing and administrative costs.
In a joint statement, Yahoo and HotJobs officials said the acquisition was a good deal for both, adding that “it was another step in their evolving strategies to build a stronger company.”
TMP had made a larger bid to acquire HotJobs in June, but that bid lost value when TMP’s stock price fell over the following months. TMP also may have backed off after the Federal Trade Commission expressed concerns over its bid, fearing a loss of competition in the online job search field.
But not everyone was crowing over Yahoo’s prospects. Some analysts said it will not be easy for a company that is already struggling on its own.
“Yahoo is having financial difficulties. HotJobs is not in the black, and this creates rather substantial risks,” said Rob Enderle, a technology expert for Giga Information Group. “It would be much better clearly if both were profitable. They are staying closer to their core skill sets with this acquisition, but this is a market area in a great deal of trouble.”
Other analysts said Yahoo’s loyal community of users could spend more time than current HotJobs users on its employment pages. Monster is the runaway leader in this oft-neglected category, with its users spending 25 to 36 minutes online per visit over the last 12 months, according to Nielsen/NetRatings, an Internet audience measurement firm. By contrast, HotJobs clients have spent as few as five minutes per visit.
The online job-search market, according to other analysts, is struggling to define its level of success and distinguish itself against more traditional headhunter firms and offline job-search companies.
Some companies, such as biotech giant Amgen Inc., have openly wondered how effective these firms are, having been unable to ascertain whether their new hires have come through job fairs, traditional firms or online companies.
But Corcoran said layoffs have left surviving online job companies in a good position to take advantage of a rush on new jobs once the economy turns around.
He added that smaller niche job sites specializing in certain types of employees also would continue to survive.
Yahoo said it would honor its contract with Careerbuilder Inc., a joint venture between Tribune Inc. and Knight-Ridder Inc. Yahoo offers job listings in partnership with Careerbuilder. Tribune Inc. owns the Los Angeles Times and other newspapers.
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* Top Job Sites
Top 10 job search Web sites based on visitors in November, in millions:
Web site Visitors (millions)
Hot Jobs.com 6.6