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Monster Worldwide could announce a sale at any time, speculated an industry executive. Monster declined to comment.
Approaches by suitors are likely as a result of chatter sparked by an executive change and recent upheavals at the publicly-listed New York-based online employment services company, said an industry observer. Bidders could include CareerBuilder, IAC/Interactive, Manpower, and Yahoo, as well as private equity players, industry sources suggested; despite frequent reports that Google could be a bidder, two industry sources said they were not convinced the search giant would buy Monster.
The unexpected departure last month of CEO William Pastore and installation of Sal Iannuzzi as the company’s new CEO is one reason industry sources are saying a deal could happen quickly. Pastore had replaced the company’s founder and former chief executive, Andrew McKelvey, who left in October 2006. Iannuzzi was previously CEO of Symbol Technologies, which was acquired by Motorola in September. Press reports linked McKelvey’s departure to a backdating issue; Monster restated financials following a stock option investigation which found a “cumulative change of USD 339.6m on stock options granted between 1997 and 31 March 2003,” according to a company release.
The industry observer said amidst all the chatter and changes, the company will likely be approached and the board will have to respond. The observer added that the company does not currently have the leadership required for management to continue making long-term plans. One industry executive agreed, noting that a lack of leadership at the top is also a problem given the increasing trend in the online recruitment market sector toward niche job boards, such as Mediabistro, and away from general boards such as Monster.
Also adding to the buzz, said the observer, is investor scepticism about the reasons for the sudden management change and the fact that Iannuzzi’s history in financial services and sale of Symbol could forecast similar skies for Monster. Some believe he was brought in to evaluate strategic alternatives for the company, said the observer.
Private equity firms are the most likely bidders, several industry sources said. Allen Paschal, CEO of OnTargetjobs, said there are several private equity players who could be interested in Monster, but he would not identify them by name. OnTargetjobs itself, which is funded by private equity firm Warburg Pincus, would not be a bidder for Monster because it does not fit with the company’s strategy of buying and building niche job boards for an eventual exit.
Between them, Paschal and another executive listed IAC/Interactive Corp, Manpower, Yahoo, and CareerBuilder as potential strategic acquirers of Monster. Paschal suggested that IAC/Interactive could be a bidder if it could come up with the money because Monster could help IAC drive more traffic to its Web sites, garnering advertising dollars. He said Manpower also could be a possibility, as Monster could easily fit with the recruiting and staffing company’s current focus. Yahoo could be a bidder in order to vault its own HotJobs site into first place; traditionally it has lagged in third place. For the same reason, CareerBuilder could also be interested in Monster, said another industry executive. Yet, the executive noted that some of CareerBuilders newspaper-owners, such as Knight Ridder, may be too preoccupied with their own market-future to pay serious attention to the situation. Google and Yahoo declined comment.
Two of the industry sources doubted recurring rumors of a Google/Monster tie up. Based on Monster’s reported management problems and backdating troubles, the industry executive said that Google has no need to buy what it could build quickly itself. He suggested Monster had reached its peak with the generalist job board model, making the upside for Google too small to interest it without a solid long-range management policy.
Paschal said Google’s strategy to date suggests Monster would not be a good play for it. Paschal noted that he had never seen Google make an acquisition to acquire a sales force. Additionally, he said the company seems to remain neutral when providing search services. That policy could be challenged by a Monster acquisition, he said, because the temptation would be to preference Monster’s job ads instead of showing search results from many different boards. For instance, he noted that many of the ads listed on boards owned by OnTargetjobs currently show up as Google search results.
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