Was HotJobs Really that Hot an Investment?

If you are yawning through the NFL playoffs, you mightfind more thrills in the online job search arena.

In recent months, there have been more tackles,upsets, and penalties in online recruiting than in anyof the gridiron match-ups I’ve witnessed.

Yahoo! (Nasdaq: YHOO) notched one of the biggestscores last month, when it snatched HotJobs.comfrom the clutches of Monster.com for a cool US$436million.

Why all the heat and commotion over online job sites? Because,as Yahoo! realized, a recession may be the best timeto befriend job-seekers. And while the payoff may notbe immediate, HotJobs.com will likely bring Yahoo! onestep closer to the promised land of sustained profitability.

Just the Facts

To recap, back in June 2001, TMP Worldwide (Nasdaq:TMPW), the parent of the leading job site, Monster.com,staked a claim to acquire the No. 2 job site,HotJobs.com for about $400 million.

Then, in August, newly appointed Yahoo! CEO Terry Semel made an unsuccessful bid to round up Headhunter.net,ultimately losing the property to CareerBuilderfor $200 million.

Not to be dissuaded from his job classifieds mission,Semel bullied TMP/Monster.com out of the running forHotJobs, with the December bid.

All Monster.com took away from the brawl were $17million in fees from HotJobs, which it willpresumably use to mount a gloves-off marketingcampaign. Get ready, Super Bowl advertising fans!

Golden Opportunity

So will Yahoo! live to see the fruits of itslabor? You bet.

The online career classifieds business — now valuedat more than $1 billion — will increase up to 35 percent annually,reaching between $2 billion and $4 billion by 2005,according to recent estimates by Forrester Research.

Powered by Yahoo!’s marketing machine and brandequity, HotJobs.com has a shot at unseating Monster.com asthe top job site. In any event, HotJobs will claim a healthy chunk ofthese billions for its new parent.

Timing is Everything

Easy for me to say, I suppose. But here’s why Semelwill be keeping his job for at least another sixmonths.

First, the timing of the HotJobs.com acquisitioncouldn’t be better. The increasing droves ofunemployed professionals are required by law to spenda portion of each week scanning job listings, in orderto qualify for unemployment benefits.

Granted, job-seekers do not pay for the service, soYahoo! will not see the traffic spike impact itsbottom line immediately, aside from a fewmore advertising dollars.

But as the economy recovers and more jobs becomeavailable, employers and recruiters will be all themore willing to pay listing fees to reach this buddingtalent pool.

Hot Name

Second, from a branding standpoint, HotJobs.com putsYahoo! on the job classifieds map, much more thanHeadhunter.net would have.

The overall awareness of Yahoo!’s own Careers sectionhas been diluted by its collage of other offerings.Indeed, Yahoo!’s resume pool is less than half ofHotJobs.com’s five million.

When you think of job searching, you don’t think ofYahoo!, do you? But what a difference $436 million canmake.

New Customers

And finally, HotJobs.com could fit snuggly intoYahoo!’s service-oriented EnterpriseSolutions division. This potential profit-centerdelivers corporate portals and other online toolsto business customers.

With mounting numbers of candidates competing forfewer jobs, there is a clear “pain point” in humanresources departments to screen and hire effectively from among the masses.

Yahoo! could package HotJobs.com technology anddeliver an application to alleviate this pain, as longas it could prove the application’s long term value.

Ready to Rumble

Not surprisingly, Monster.com has launched a counter-attack, with its announcement of a software product called Monster Office HQ, which allows human resource managers to track job postingsand to collect resumes in a searchable database.

Watch for a similar effort from Yahoo! in the comingmonths.

Too bad there’s no Las Vegas line on the onlinerecruiting battle. My money would be on Yahoo!/HotJobsin a nail-biter.

What do you think? Let’s talk about it.