Yahoo Trying to Sell HotJobs, Yahoo Small Business
Since taking the helm of Yahoo in January, CEO Carol Bartz has been consolidating management of the company’s sundry product groups, shaving excess costs (including laying off 700 more employees in the second quarter), and otherwise directing resources to support those properties that have consistently performed the best, like Yahoo Mail.
Indeed, just this morning, Yahoo unveiled a new homepage that is already receiving rave reviews for a revamped design that includes more personalized features, along with embedded widgets of third parties like Facebook and MySpace that will enable users to enjoy the Web without leaving Yahoo.
Now, peHUB has learned from multiple sources that as part of Bartz’s drive to dismantle non-core assets, Yahoo is also trying to shed both HotJobs, which Yahoo acquired for $436 million in cash and stock back in 2001, and Yahoo Small Business, which helps customers get their small businesses online by providing them with everything from domain registration to site monitoring to promotional tools.
“They’ve been approached by [major buyout firms] but they’re proactively looking to sell to a strategic investor like a Careerbuilder or Monster.com,” says one source familiar with the situation, adding that the company may be looking to avoid a future embarrassment. “If a Warburg [Pincus] or a Spectrum [Equity Investors] buys HotJobs for $300 million and resells it for $500 million in two years, that’s going to look pretty bad [for Yahoo],” says this person.
Strategy aside, Yahoo — which is attempting to sell the properties without the help of an investment bank – could use a financial boost. Newly released second-quarter earnings show Yahoo’s total revenues dropped 13 percent to $1.5 billion, despite an 8 percent rise in net income to $141 million.
For now, however, its pitch for both properties doesn’t seem to be resonating with potential acquirers. “They’ve been out there for two or three months; this isn’t a brand-new process,” says a source.
No doubt competition in the classifieds space is giving some would-be buyers pause, particularly given the raft of online recruiting alternatives that the unemployed masses are now using, including LinkedIn and Craigslist and vertical search engines like Indeed and SimplyHired.
Ostensibly to make HotJobs a more attractive acquisition target, the company last month announced results-oriented pricing, calling it a pay-per-candidate system. (The model means advertisers pay only when job candidates apply for the positions listed at their Web sites or clicks through to a recruiter’s Web site.)
In terms of Yahoo Small Business, the biggest obstacle may well be the massive amounts of traffic that Yahoo drives to the site, which is largely where the property’s value lies. “How do you deal with that after the sale?” asks one source. “You can cut a deal where Yahoo continues to send traffic at a discounted rate for some period of time, but it doesn’t address where you get traffic after Yahoo goes away.”
Asked for comment earlier today, a Yahoo spokeswoman said tonight that the company “doesn’t comment on rumors or speculations.”
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Ivan said on July 22, 2009
This is my horrible experience with Yahoo yesterday.
I’ve been using a Yahoo! Small Business for the past 3 years to sell items on the internet with my company. Since international orders are flowing in, we heavily rely on their small business mailbox. Last month, I got a problem with my other yahoo domain. They charge me for the renewal of the cancelled service. I disputed that charges because I gave them enough time and notice (and they confirmed it via email) to cancel the service. I write them twice using the yahoo callback form but we got no answer. I followed them up, but still no answer. I cannot call their toll free hotline because we are in the Philippines and we dont have access to it.
So, realizing that Yahoo will never replied to our complain, I call my bank yesterday for a charge back. Yesterday evening, my staff called me informing me that they cannot log in to our yahoo account. Yahoo cancelled all our service in response to the charge back!
They put us on hostage. I called my friend in the US to help us call Yahoo’s toll free to resolve the problem. After discussion and charging my card again, they reactive the account.
The worst part is, upon reactivation, our mailbox content is gone! Three years of business mail, sales lead, important email are gone and Yahoo cannot return it back!
Because of this, I’m out of Yahoo for good. We will transfer all our services to other provider. I reactive our account for three months just to facilitate the smooth transfer of our domain to other provider (like a local web hosting).
I cant believe my life a company like Yahoo cancel the service just like that. A charge back transaction can be disputed back with a bank and that is what I expect from them. But NO! they just decide to bully you.
If we are based in the US, we will file a lawsuit against them for losing our valuable mails. But for now, our only option it to move out of Yahoo.
So, I warn everybody to check your provider and their TOS. If the TOS is saying that you cant do anything if they wish to do this and that, then stay away from them. Yahoo is terrible company.
Nick Stamoulis said on July 22, 2009
I have been a loyal Yahoo Small Business user for well over 8 years. I have registered hundreds of domains, have sites that are hosted use Yahoo! email, etc. I have NEVER had ANY problem with Yahoo!, customer service, technical support etc.
That said, I am nervous I have a good number of domains registered through Yahoo Small Business, if they sell the division, will my domains, websites and my business be safe for renewal? They might be better off holding on the the domains and hosting divisions as these are nice entry points for many small businesses for them to up sell their Yahoo Search Marketing products, etc…
Marc said on July 22, 2009
Why would anyone buy HotJobs?
Once it is disconnected from Yahoo! it loses 80% of its traffic and then has to be re immersed in a traffic and marketing war with Monster and Careerbuilder which each spend 10s of millions a year on marketing. Hard to see how Yahoo! recoups its $436 million purchase price in any scenario. They are better off keeping it.
People want to look for jobs when they are Yahoo!
Erik said on July 23, 2009
Dear Ivan from the comments above:
You should expect that. When you charge back you are costing a company a great deal of money and it should only be used when you never plan on conducting business with them again. They were completely within their right and I don’t believe they even intend their service to be used by International users, so you were clearly in the wrong.
Just something to think about before you go on another idiotic rant about something that was completely within your control.
Rob Snell said on July 23, 2009
What’s up with Carol Bartz and the Yahoo! Executive team?
As a Yahoo! Small business customer since waaaaaaaay back in 1998, I’ve always had the confidence that EVEN THOUGH Y!SB and Yahoo! Store were small potatoes compared to the $$$ in display advertising and search marketing (PPC), the Yahoo! Store part of Y!SB was so profitable that Y! would leave it alone.
My guess is that Y! generates 4-5 BILLION (with a B) in sales for the 45-50K Yahoo! Store owners and gets $125 MILLION a year in rent and revenue share fees from merchants.
I hope Sunnyvale knows what they’re doing!