After a lengthy slumber, the sluggish domestic labor market finally awoke last fall and got back to business. Though it has since taken time some time off for vacation -- July payrolls expanded only a meager 32,000 -- the nation's workforce has swelled by 1.5 million jobs since last August. Even the beleaguered manufacturing sector has created 91,000 jobs this year, with overall unemployment rates dropping to 5.5% after peaking at 6.4% last June.
How has Monster Worldwide (Nasdaq: MNST), parent of Monster.com, the nation's largest online job site, responded? Well, that depends; the company's operations and stock price have taken divergent paths. After a disastrous $1.04-per-share loss in the first quarter of last year, Monster has posted five consecutive periods of profitability. Second-quarter earnings released last month surged 75% on revenues that climbed 26% to $209.4 million.
Yet during that time the stock has lost one-fourth of its value and today languishes 80% below the peak it reached several years ago -- when names such as JDS Uniphase (Nasdaq: JDSU) and Verisign (Nasdaq: VRSN) were still en vogue. Perhaps it is that disparity that prompted Barron's to recently pose this question: Is Monster Worldwide on the auction block?
To be sure, such a valuable online property would enhance the portfolios of many, from InterActiveCorp (Nasdaq: IACI) to Yahoo! (Nasdaq: YHOO). Just last week eBay (Nasdaq: EBAY) acquired a 25% ownership stake in craigslist, an Internet bulletin board that derives its revenues from online job postings. Though Monster.com is still the premier player in terms of sales and last month captured 25.7% of all employment site traffic, craigslist receives more overall visitors. Furthermore, it has undercut Monster's pricing and connects prospective job seekers and employers on a local rather than national basis.
While traditional print media companies have seen help-wanted revenues on the rise, with classified sales up 19% at Pulitzer (NYSE: PTZ) and 12.2% at Gannett (NYSE: GCI), for example, job hunters are increasingly focusing their efforts on efficient online searches rather than tediously poring over newspaper listings with highlighter in hand. Of course, most media firms have also embraced the digital revolution, such as Gannett, Tribune (NYSE: TRB), and Knight Ridder (NYSE: KRI), who collaborated to bring CareerBuilder.com to life.
While rivals such as CareerBuilder and Yahoo!'s HotJobs.com (not to mention countless smaller recruitment sites) are waging a fierce battle for online recruitment dominance, Monster Worldwide remains at the top. Including affiliates, the firm boasts 43 million registered job seekers, 312,000 corporate customers (including 490 of the Fortune 500), and more than 1 million job postings. It is estimated that the company's resume database grows by 46,000 per day. Considering recruiters are most drawn to locations teeming with resumes and job seekers are likewise attracted to places where jobs are plentiful, these metrics are critical.
Stating that Monster Worldwide might be a possible takeover candidate is purely speculative at this point. Neither CEO Andrew McKelvey, who controls one-third of the voting rights, nor the two largest institutional holders have shown any inclination to sell. However, an offer with a substantial premium attached might be difficult to ignore. As always, prudent investors should first take a hard look at fundamentals before rolling the dice on rumors.
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Fool contributor Nathan Slaughter
has 16 "free resume critique" offers in his inbox. He owns none of the companies mentioned.
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