US online job companies shop abroad

The large online recruitment companies in the US, having found that their business models don’t always translate in other countries, are increasingly buying their way into foreign markets. In recent weeks, both Monster Worldwide and have gone on shopping trips overseas.

In October, Monster acquired the remaining 55% stake it did not already own in for $174m in cash. ChinaHR is a key player in the Chinese online recruiting sector and represents a sizeable gamble by Monster to gain market share in the world’s most-populous country. Monster’s move into Asia came just three months after CareerBuilder picked up Paris-based for an undisclosed amount.

Both Monster and CareerBuilder have said they will continue to look at international expansion. Monster currently gets some 42% of its revenue from outside the US. That’s up from just 23% in 2005. While CareerBuilder, which was recently acquired by Gannett, does not disclose its international segment revenue, it has emphasized that division with its acquisitions. The company’s past four deals, along with its partnership with MSN, show the company is looking abroad.

Number of overseas Monster Worldwide and CareerBuilder deals

Acquirer Number of acquisitions Value Target countries
Monster Worldwide 6 $380m France (2), Germany, Norway, People’s Republic of China, South Korea
CareerBuilder 4 Not disclosed France, Greece, the Netherlands, Sweden

Source: The 451 M&A KnowledgeBase

Uptake in travel deals

-by Thomas Rasmussen

The past year has seen a surge in online travel deals as well as venture funding of travel startups. In fact, we wonder if the industry hasn’t gotten a little too crowded. A number of startups have received funding, including Uptake, which was founded by ex-Yahoo Travel execs. Uptake brings the social aspect to the online travel world by aggregating user-generated reviews from various portals. It fetched $10m in venture funding from Trinity Ventures and Shasta Ventures last week, bringing its total raised to $14m. The company says the funds are to be used for internal expansion and acquisitions. Indeed, the current competitive landscape has presented startups like Uptake as well as established players like Expedia with one choice: grow or risk becoming irrelevant.

Against this backdrop, online travel companies have taken different approaches to M&A. Relative newcomer is one company that recently took a major step to buy growth. Hoping to go public eventually, the company doubled its size overnight by acquiring competitor SideStep Inc for an estimated $180m in December. Meanwhile, fellow startup Farecast worked on the other side of a transaction, opting for a sale to Microsoft in April for an estimated $115m to help Redmond shore up its ailing MSN Travel division. Meanwhile, the giant of the industry, Expedia, has been ratcheting up the M&A pace. Of the 15 acquisitions it has done, 11 were inked in the last 18 months. In a recent filing with the US Securities and Exchange Commission, Expedia said it spent $180m on five acquisitions in the first two quarters alone.

As for Uptake, we expect the small company to consider a few tuck-in acquisitions of smaller rivals to add more voices to its reviews. Potential targets include companies such as TravelMuse and TripSay, which also offer user reviews. However, while Uptake is eyeing targets, we have a feeling it may be a target itself. We suspect the social aggregation aspect of Uptake is very appealing to larger players that are trying to bring the social Web 2.0 experience to online travel. Likely acquirers include Kayak and Microsoft, which both lack a social rating system. Expedia and Yahoo Travel, an outfit Uptake’s founders know well, might also want the technology to improve on their own systems.

Number of known strategic online travel deals

Period Deal volume
September 2007-2008 14
September 2006-2007 11
September 2005-2006 6
September 2002-2005 19

Source: The 451 M&A KnowledgeBase