Monster Worldwide, Inc. (MWW) recently completed the acquisition of HotJobs for $225 million in cash. HotJobs is a leading online recruitment website which was previously owned by Yahoo! Inc. (YHOO).

As per the terms of the deal, Monster and Yahoo! have also entered into a three-year commercial traffic agreement, whereby Monster will become Yahoo!’s exclusive provider of career and job content on the Yahoo! homepage in the United States and Canada.

The HotJobs acquisition will add 6 to 12 cents to the bottom line by 2011 after paying Yahoo! for their traffic. HotJobs acquisition should strengthen Monster’s position in the online job market and global recruitment resources. Along with an expanding customer base, Monster will now have access to roughly 62% of the US internet population (130 million).

Monster will also expand its newspaper partnerships from 400 to 1000 with the addition of 600 HotJobs daily and weekly newspapers providing local reach in all 50 states.

The economic downturn has adversely impacted Monster’s business. With the economy showing signs of recovery, Monster is trying hard to revive its business. Monster is also taking steps to diversify its customer base. Monster has traditionally targeted the enterprise market, or those businesses that are among the largest 1,500 organizations/ operations on a global basis.

However, the company is now concentrating its efforts on expanding its footprint into the small-to-medium sized businesses (SMBs), having approximately 10 to 2,000 employees and operating primarily in local and regional markets. The company is currently creating alliances with media and publishing companies that extend its presence with local and regional job seekers in various markets across the United States.

Management continues to see signs of encouragement for its business in 2010. While the impact of these positive developments will not be felt in 2010, we expect the company to return to profitability in 2011. We currently have a Neutral recommendation on Monster. The stock currently has a Zacks #3 Rank, which translates into a short-term Hold rating.
 
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