HotJobs shareholders will receive 0.3045 in Yahoo stock and $5.25 in cash for their shares. HotJobs will become a wholly owned subsidiary of Yahoo.
The HotJobs acquisition will help Sunnyvale, Calif.-based Yahoo diversify its revenue dependence on advertising. The portal has been hit hard by the online advertising collapse, with sales in theplummeting 39 percent compared with the same period in 2000. The majority of HotJobs' revenue comes from membership fees paid by employers and recruiters.
"Yahoo's acquisition of HotJobs is consistent with our business strategy to build a diversified global business and provide deeper, more valuable solutions for our consumers and business partners," Yahoo Chief Executive Terry Semel said in a statement.
During a presentation to Wall Street analysts in November, Semel set a goal of reducing revenue from advertising to 50 percent of the company's total sales. Already, the company is showing signs of moving in that direction. In 2001, non-advertising revenue reached 25 percent of total sales, up from 13 percent the previous year.
Yahoo executives emphasized their intention to acquire companies that are leaders in their specific markets, especially those categorized as "listings" businesses, which include personals and job searches. True to its word, Yahoo in December made an unsolicited offer for New York-based HotJobs, eventuallyHotJobs' agreed suitor, Monster.com parent TMP Worldwide.
Still, the company's most immediate concern is figuring out how to sustain revenue in a down economy. Yahoo expects 2002 revenue to increase modestly, reaching between $750 million and $800 million, compared with the $717.4 million it earned in 2001.