This post has been updated.
Job board insiders are scoffing at rumors that Yahoo is planning on selling HotJobs, saying it is unlikely the company could find a buyer in this market.
“It’s the worst possible moment in history to sell a job board,” says one insider who asked not to be named. “There may be a desire to divest (HotJobs), but who’s got the money to buy?”
The most likely candidates to buy a job board are other job boards. However neither of the two biggest boards — Monster and CareerBuilder — appear in a position to make an acquisition.
CareerBuilder, which lays claim to the highest job-seeker traffic and generates more U.S. revenue than rival Monster, is owned, primarily, by three newspaper companies, one of whom, Tribune, is in bankruptcy. A fourth partner, Microsoft, has been having on-again, off-again conversations about buying Yahoo’s search business.
Publicly owned Monster once tried to buy HotJobs, but was outbid by Yahoo. The search company paid $436 million in cash and stock in late 2001 for the company. Monster’s stock then was trading in the low $40s, about four times Wednesday’s $11.57 close.
However, there is a possible sale scenario in which Yahoo would sell HotJobs, and as part of the deal, be paid a hefty fee to send traffic to the site. These traffic deals are common in the industry. For instance, AOL’s jobs channel is powered by CareerBuilder, which pays the company millions for the traffic.
“HotJobs, unbundled from Yahoo’s distribution, would be worth a lot less,” observes Craig Donato, CEO of classifieds aggregator Oodle. He speculates that if a deal for Hotjobs were to be made it would have to include some sort of distribution arrangement. Make it lucrative enough for Yahoo, he says, and it might not be necessary to come up with all that much money upfront.
There are complications. Donato says the value would depend on the unduplicated traffic between HotJobs and a job board buyer. Another is the impact on the 800 member newspaper consortium Yahoo has assembled.
Put together in late 2006, one of the major drivers has been HotJobs. It was over the distribution of jobs and traffic that Yahoo and a handful of newspaper companies first began talking. The partnership eventually included display advertising and content distribution and search traffic, but the first dollars to come out of the deal were from recruitment. Though the importance of the job board to the consortium has dimmed with the recession, one newspaper executive we spoke with told us if Yahoo were to sell HotJobs it would have to guarantee that recruitment advertising would not be harmed.
“That probably means,” says the executive, “that we (newspapers) would stay on the platform and Yahoo would still distribute the listings.”
Former HotJobs general manager Dan Finnigan, who played a key role in forming the newspaper alliance, says he’s not surprised that Yahoo would be looking at HotJobs or other business units. But he doubts it will actually be sold, barring some other business reason.
“For Yahoo, it’s real money” says Finnigan, who left Yahoo in May 2007 and is now CEO of Jobvite. “It makes money.”
One insider involved in the sale of a major job board in the past suggested that the rumors about Yahoo selling off HotJobs may be nothing more than the kind of thing that goes on in a large struggling company when a new CEO takes over.
“(Carol) Bartz is probably doing what every new CEO does and that’s to look at everything,” he says. “HotJobs would be a tough sell. The market’s not getting any better. As a buyer, I think the feeling is it’s going to be cheaper next month.”