Unless you’ve been living under a rock recently, you’re aware that Microsoft is doing its damnedest to acquire Yahoo! They want it really, really badly.
Time will tell if the gang in Redmond can pull it off, but I’d take a calculated guess in saying that the employees at HotJobs are hoping it doesn’t happen. ‘Cause if it does, it’s likely just a matter of time before they’re all on a competing site looking for work.
Why?
Well, Microsoft kinda owns a percentage of CareerBuilder. And CareerBuilder already pays Microsoft a pretty penny to run the MSN career center. It’s doubtful they’d keep two job sites around, leaving HotJobs out to dry.
It’s probably as simple as that. A new owner comes in. Integration happens. Costs get cut. Those in bed with the buyer win.
The more interesting question, however, is the aftermath. Does HotJobs get sold to the highest bidder or fade into the abyss? Does CareerBuilder become HotJobs, arguably a better brand name? Does pay-per-click – already part of HotJobs’ offering – become part of CareerBuilder’s DNA?
Then, what does a landscape with two primary players instead of three look like? Does it open an opportunity for ever-acquiring local players to work their way into the national discussion? Does it weaken Monster, leaving them looking for a sugar daddy of equal?
If you’re not on Yahoo!’s payroll, it should be pretty interesting to watch. I’m assuming Microsoft gets what it wants in this case, of course, which, yeah, they probably will.
I say warm up those resumes, Yahooligans! Just don’t waste your time posting them on HotJobs.
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February 13th, 2008 at 5:38 am
Good blog post. I previously worked at Microsoft. Here is one insight into the reason Microsoft spun out Expedia. Microsoft decided that they wanted to focus on the software and internet business. They found that building a deep business in a verticle like Travel wasn’t something the company wanted to do. The reasons are a lack of focus on software/internet, and a drain of resources away from software/internet. (This came from Rich Barton, the former CEO of Expedia)
It wouldn’t surprise me if Microsoft spun HotJobs out as it’s own company. That’s what I would do. That would let it have it’s own resources and manage it’s own P&L without distracting Micro-Hoo. I’m not sure Microsoft adds too much value in this case.
It worked well at Yahoo because it was a way to arbitrage traffic. The real answer will probably come from seeing what Yahoo looks like over time when under the Microsoft umbrella.
I never saw Microsoft as a company that would want to acquire Monster, CareerBuilder, Dice, for these reasons.
-Bryan
Bryan Starbuck
Bryan@TalentSpring.com
TalentSpring is a job board for the game industry and of software developers. TalentSpring has matching technology so employers find exact matching employees, without strict keyword search. TalentSpring also ranks job seekers by how good they are in specific industries. This allows employers to get an exact list of employees that match their open position, and sorted by how good they are against that kind of a job opening. Merit based hiring.
February 13th, 2008 at 5:58 am
Joel,
I hate to disagree with you on this one, but I don’t think a Microsoft acquisition of Yahoo should have HotJobs employees reaching for their resumes.
Microsoft hold only a minority share in CareerBuilder (I think it’s 4%), with the remaining shares held by newspaper publishers Gannett, Tribune and McClatchy, so it’s unlikely that an integration is a feasible option. Even though HotJobs is a better brand name, the barriers to CareerBuilder becoming HotJobs seem too significant.
We have a situation in the UK where a number of significant players hold a stake in a generalist board (Fish4Jobs) but the stakeholders have also snapped up/developed their own job boards in recent years. This potential ‘conflict’ does not seem to have hampered the success of either set of job boards.
I’d be surprised if Microsoft would reduce its online recruitment market share by encouraging an integration. A sale of HotJobs would be a more likely option, but if I were at Microsoft I’d want to keep a recruitment property I could have 100% control over.
Perhaps a more important question is “what do the HotJobs’ employees think about (potentially) becoming Microsoft employees?”
February 13th, 2008 at 12:01 pm
Joel – Some good points raised above by you Bryan and Julian. If anything, its an opportunity for MSFT to shift their thinking around the relationship with CareerBuilder – and who wouldn’t want to do that! A potential spinoff of HotJobs, as MSFT did with Expedia could be quite compelling given the data access HJ brings. HotJobs has a lot to offer if managed effectively. An even more significant opportunity would be for MSFT to see the value in integrating MS-CRM with HotJobs and influencing the current landscape of tools and functionality offered by the job boards and ATS vendors. Regarding integration of the two companies – I wonder more about the cultural/environmental differences and the resulting impact on future growth, initiatives and retaining talent from Yahoo. How successfully has MSFT managed the acquisition/integration of aQuantive?
February 13th, 2008 at 12:22 pm
If I was a HJ employee I would excited.
Yahoo has let the thing slide and HotJobs was once the #2 career site and is now a distant 3.
Microsoft owns a sliver of CB and would not have any money for a full acqusition. Plus they need money to acquire Yahoo.
Logic would tell you they would sell the stock/shares in CB to help finace the deal. Then they would own 100% of HotJobs.com.
MSFT would then integrate HJ into all of MSFt dropping CB. HotJobs needs a serious shot in the arm to build some momentum and trying to regain some lost market share.
Once again..if I was a HJ employee I would be elated. Recruitment advertising is a profitable business and the income potential (not to mention content) would be welcomed by MSFT after it overpaid for Yahoo.
HJ would be a strategic fit for content, revenue, etc for Microsoft/Yahoo.
Once again..if I were a HJ employee I would be elated.
February 13th, 2008 at 1:41 pm
Microsoft would need to divest of either its CareerBuilder stake or of all of HotJobs to satisfy the Feds as well as the other CB shareholders. If it viewed the Jobs category as important enough to acquire a piece of CB, why not keep HotJobs? I doubt that HotJobs fades into the abyss. It’s still solidly #3 and substantially bigger than Dice. That said, being owned by Yahoo certainly hasn’t done anything for HJ, I’m not sure why it would be better to be owned by MSFT.
February 13th, 2008 at 2:02 pm
Normally I don’t waste my time on such conjecture but I wanted to address one of the comments made by Brian regarding HotJobs traffic.
Brian’s claim that Yahoo has let HotJobs slide into a distant # 3 role is factually incorrect. According to the latest media metric numbers, HotJobs is #2 in the space with 37.3% market share. Monster and CareerBuilder were 24.3% and 53.1% respectively. Even more impressive are the YoY growth rates. HotJobs has grown 63% YoY, while Monsters growth was -8, and CareerBuilder’s was 17%. So how did this happen? Yahoo has invested millions in a new state of the art operating platform for HotJobs. Additionally, Yahoo’s co-branding deal with a consortium of newspapers has paid dividends for HotJobs, as it has meant huge increases in traffic in markets in which HotJobs was relatively unknown a year ago.
The suggestion that Yahoo has let HotJobs slide ignores the facts. Nice try Brian; better luck next time.
February 13th, 2008 at 2:22 pm
Looks like Rob has jumped on Brian’s ignore the facts express…….
In your last sentence Rob, you say that being owned by Yahoo hasn’t done anything for HotJobs. Again, this Brian-esque claim is based on assumption, not fact. HotJobs reps are now selling recruitment media, and sponsored search on the Yahoo network. This gives HotJobs clients a targeted audience of 135 million users, rather than the 40 million available through all 3 job boards combined. Without the leverage of Yahoo’s audience, the HotJobs product offering would be no more effective than that offered by Monster or CareerBuilder. The traffic on job boards is steadily decreasing, while the amount of career related searches on search engines is up 300% in 6 months (33 million/month on yahoo for those of you who appreciate facts). This suggests that the online recruitment landscape is changing rapidly. HotJobs recognized this early on, and has been able to leverage Yahoo traffic to offer solutions beyond the job board…..solutions that neither of its competitors can counter.
February 13th, 2008 at 3:19 pm
Brian’s most silly assumption is that Microsoft does not have the money to do X. They have the money to do X, Y, Z, and AA just to start, if that’s what they want to do.
What’s Microsoft’s history look like when buying similar firms in similar spaces ? Do they start chopping out of the gate or let them be for awhile ?
I dont think a 4% stake (if thats what it is) would trouble fed regulators all that much. Who knows if they will be looking at YHOO businesses beyond ’search’ anyway ? Cant count on the feds to show much nuance or savvy esp in technology cases like this.
February 13th, 2008 at 4:12 pm
So many things could happen. All the scenarios above, plus some consolidating. Don’t forget about Monster – there is clearly some event in their future. Don’t forget about the future of CB and their position within Tribune. Will they be spun off? Will Gannett pick them up? McClatchy has never really been a big fan of being part of that trifecta. Will the newspapers decide that Yahoo! has done a better job addressing their needs and considate it all that way? A lot of newspaper veterans are involved with that project – for a reason. The hard part ahead is the inevitable “hurry up and wait” effect that this will cause. I hope it doesn’t stall too many deals – both on the direct sales side or on the newspaper side. If I were a CB or Monster (or any other site like Dice or JobFox) rep or partnership person, I’d be milking the opportunity to snag some business on the backs of this Microhoo! possibility. Microsoft illicits so many different reactions from people.
It’ll be interesting to see where Yahoo’s! layoffs are concentrated (they started today) and how much they affect the HJ team. Regardless of what happens, there is a roller coaster ride ahead!
February 13th, 2008 at 5:48 pm
Martin – MSFT does not have enought money to buy them!
See – http://www.msnbc.msn.com/id/23008580/ (MSFT for the first time in its history would have to borrow money to make the acquisition.) I love MSFT but they do not have enough money to do “whatever” they want.
Publius – ok…in my neck of the woods CB and MSTR are the big recruiting sites. Perception -wise I have heard very little about HJ since the merger. I guess the other two companies have done a beter job contacting me and working with my company for our recruiting needs/postings.
If HJ has been building…good for them but it has been a quite build. Maybe a better marketing campaign would help them.
February 14th, 2008 at 12:20 am
Brian Microsoft has 21b on hand and probably another 25b in shareholder equity just in 2007. They have no debt at the moment and 66b coming thru the door in the next year. Just because you cant pay cash for a house (or may not want to) does not mean you cant buy it, for one of those real world examples. , I do believe that they can buy just about anything they want. YHOO will go down as one the all time bad deals-
February 14th, 2008 at 3:58 pm
Sorry folks, I should have clarified. HotJobs is a distant third in terms of revenue. The HotJobs traffic numbers are strong. Unfortunately, selling postings on a wholesale basis to newspapers isn’t a great way to make money for either HJ or Monster.
February 14th, 2008 at 7:39 pm
Publius is dead on.
February 18th, 2008 at 11:33 am
3rd in revenue for YHJ is not necessarily a bad thing. CB launched a $250 million ad campaign – someone needs to pay for that. The ROI with YHJ’s gains in marketshare seem to outweigh the revenue differences. With the lack of advertising expenses, it seems that YHJ is returning a higher yeild.
Shareholders rejoice!
February 19th, 2008 at 7:07 pm
Careerbuilder paid a lot for the right to be represented on AOL and MSN. If M/S owns a portion of CB, then it’s not worth talking about. Monster “lost” the bidding war about five years ago over reaching AOL and MSN eyeballs. M/S would love to have it’s own property.