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Monster.com parent concedes HotJobs fight

Tags:
HotJobs,
Tmp,
Monster.com,
Recruitment

Larry Dignan CNet

Published: 27 Dec 2001 15:21 GMT

Monster.com parent company TMP Worldwide said on Thursday that it will not match Yahoo!'s offer for HotJobs, effectively freeing HotJobs to merge with the Internet portal.

On Monday, HotJobs notified TMP that it had 72 hours to match or top Yahoo!'s unsolicited bid, which was worth about $436m in cash and stock. Earlier this month, Yahoo! countered TMP's bid, arguing that HotJobs' listings could diversify the company's revenue base and "create a powerful new force in recruitment."

Yahoo!'s offer, which valued HotJobs at $10.50 a share, was well above TMP's offer of $9.22 a share based on TMP's closing price on Wednesday. New York-based TMP made the original offer to buy HotJobs in June. The deal was initially valued at $460m, but the value eroded with TMP's stock price. The TMP-HotJobs engagement was also prolonged by antitrust concerns from regulators.

Despite the decline in the deal's value, TMP said it already offered HotJobs "full and fair value for the company."

"While a combination with HotJobs is attractive to us, we do not see a financial or strategic rationale for modifying our bid for the company," TMP chief executive Andrew J. McKelvey said in a statement. "With a proven record of performance for users and shareholders alike, we are very comfortable with our prospects. We look forward to competing with HotJobs."

TMP's decision was widely expected by Wall Street analysts, who wagered that TMP did not see HotJobs as strategic enough to enter a bidding war. In a research note Wednesday, UBS Warburg analyst Kelly Flynn said the Yahoo! offer was simply better -- and less risky -- for HotJobs shareholders since it included $228m in cash along with stock. However, Flynn did not rule out the possibility of another HotJobs bidder.

Monster.com is the leading online recruitment service provider and provides content for America Online and MSN, the top two portals, the company said. According to Jupiter Media Metrix's November ranking of the top 50 Web properties, Monster.com was ranked No. 31; HotJobs was at No. 45.

To ensure Monster.com stays on top, TMP will launch a new US marketing campaign with advertisements during the Super Bowl and the Bowl Championship Series, the company said. The Bowl Championship Series is a series of games to determine the college football national championship.

Monster.com's "Never Settle" ad campaign will also appear during the Olympic Winter Games.

For its part, Yahoo! has made it clear it wants to be a major player in the recruiting game. Analysts said Yahoo! is hoping to target listings as a way to diversify its revenue base from advertising.

At a recent daylong meeting with analysts, Yahoo! chief executive Terry Semel said the company wants to garner 50 percent to 60 percent of its revenue from advertising and marketing in 2004, down from 80 percent it gets now.

To accomplish that goal, the Internet portal is also likely to acquire companies where it can be in the running to dominate a niche, analysts said. "We believe this move (Yahoo!'s bid for HotJobs) represents a strong indication that Yahoo! is increasing its focus, identifying which markets are most attractive, and aggressively pursuing them," said USB Piper Jaffray analyst Safa Rashtchy in a recent research note.

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