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Yahoo Sells “Non-Core” Asset HotJobs For $225 Million
The HotJobs for sale rumor has been around for some time. Yesterday a deal with Monster was finally announced. It is being widely hailed as a smart move by Yahoo to gain cash and divest itself of another “non-core asset.” Except for payment and other terms the deal is conceptually analogous to what Yahoo is doing with PriceGrabber in shopping and with Microsoft in search: outsourcing content or fulfillment.
Yahoo will continue to have a career site (at least for the next three years) but it will be powered and populated by Monster:
Monster and Yahoo! have also entered into a three year commercial traffic agreement, to take effect upon the closing of the acquisition, in which Monster will become Yahoo!’s provider of career and job content on the Yahoo! homepage in the United States and Canada. The traffic agreement calls for performance based annual payments calculated by clicks and expressions of interest, subject to annual floors and ceilings. In addition, the traffic agreement provides Monster with an exclusive right for a period of time following the closing of the acquisition to negotiate similar traffic agreements with Yahoo! properties on a global basis, including countries in Europe, Asia and Latin America, subject to certain limitations.
The price is $225 million in cash (Yahoo acquired HotJobs for $436 million in 2002). PaidContent summarizes some additional terms (based on an SEC filing), including a non-compete between the two companies. The related, potential sale of Yahoo Small Business has reportedly been called off.
Given that Yahoo decided shortly after CEO Carol Bartz joined to outsource search, presumably a “core” asset, one is lead to wonder what will Yahoo retain as it moves forward, as the company seeks to reduce costs and boost margins.
Bartz’s remarks on the recent Yahoo Q4 earnings call may hold some clues. She identified the “homepage, mail, messenger, news, sports, finance and entertainment” as key areas. This is a relatively casual, top-of-mind list she rattled off during her opening comments, but it may indicate what Yahoo wants to “retain” for itself. Bartz added about 2009 as a whole, “We [ ] decided to close down products that didn’t drive engagement or proudly represent Yahoo.”
In addition, Bartz spent a great deal of time talking about Yahoo’s display advertising business and related technology. The emphasis is on attracting brand advertising dollars and delivering TV-scale (or larger) audiences to them:
[W]e are still ahead in the display game and we intend to keep it that way. Frankly our competition is television. That is where major advertisers spend most of their money and where we are taking share. As a result, video is becoming increasingly important . . .
But we are only getting started. Our recently announced partnerships with Group M and Electus expand our capabilities in this space . . . We give Electus massive reach but remember we are not trying to mimic traditional TV formats. We are about developing low cost, high quality web content for our users that is created in partnership with advertisers.
Even as Yahoo is shedding “non-core assets,” the company is thinking again about acquisitions. Here’s what Bartz had to say about that subject for 2010:
For us 2010 is about acquisitions and investments to make Yahoo! even stronger. We think about acquisitions in three buckets. The first are the small to medium acquisitions where we acquire important technology and the people behind it. The second is content related where we acquire a company for their audience, content or community. There are a lot of niche sites that have highly engaged users and specialty content that would fit well with our portfolio and our advertiser needs. Third is geographic, where we will make an acquisition to move into or strengthen markets like our deal with Maktoob . . .
So what is ahead for us this year? We are done looking inward. We are looking outward at the incredible opportunities ahead and we are focused on the following areas; Great experiences for our consumers including more social, mobile and video features and improved local content . . .