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The deal isn't exactly a surprise. HotJobs has been rumored as buyout bait since Carol Bartz arrived at Yahoo!. It's also the second significant divestiture in as many months, following Yahoo!'s sale of email enabler Zimbra to VMware (NYSE: VMW ) in January.
The deal finally unites HotJobs with Monster.com. Monster's parent had agreed to acquire the company shortly after the dot-com bubble burst in 2001, but was ultimately trumped when Yahoo! wooed HotJobs away in a cash-and-stock deal valued at $436 million at the time.
Your calculator doesn't lie: Yahoo! is taking a hit on this sale. Then again, it's not as if Yahoo! needs the money. It closed out its latest quarter with $4.5 billion in cash and marketable securities. The company didn't need to sell low -- and, yes, this is selling low.
The industry is in a funk right now. In the fourth-quarter results they posted this week, Monster Worldwide and Dice.com parent Dice Holdings (NYSE: DHX ) reported 27% and 24% drops in revenue, respectively.
With an arsenal of cash at its disposal, one would argue that Yahoo! should have kept HotJobs and snapped up smaller niche sites like Dice or China's 51job (Nasdaq: JOBS ) . Revenue in Yahoo!'s latest quarter fell 8% before traffic acquisition costs, revealing the danger of putting all of its eggs in the display-advertising basket. Earnings before one-time events also took a hit.
Some will argue that Zimbra and HotJobs aren't core holdings at Yahoo!, but it's not as if shrinking in scope will make Yahoo! a more worthy online advertising competitor to Google (Nasdaq: GOOG ) . Heck, it all but threw in the flag there when it surrendered its search stronghold to Microsoft (Nasdaq: MSFT ) .
This isn't a time for Yahoo! to think smaller. If that's what Bartz thinks, she may want to keep HotJobs.com close -- because she may need it in a year or two.
What do you think of Yahoo!'s divestiture strategy? Share your thoughts in the comments box below.