The NY-based jobs site operator canned 800 workers after missing Q2 sales and earnings targets. Revenues were up 20%, to $331 million, but Wall Street was looking for $337; earnings fell 2 cents short of $0.34 consensus. Monster will take a $55 to $70 million charge next quarter, much of that for severance payments.
The press release and SEC filing didn’t shed light on what’s gone wrong, but we suspect Monster has been suffering from the same problems as newspapers – brutal competition from Craigslist and niche, focused job sites. On a conference call, Monster CEO Sal Iannuzzi, who took the top job in April, did the expected–blamed the old regime. And while he acknowledged a lot of competition, he thinks his overhaul (cut costs, put more money into marketing, don’t lower prices if at all possible) will do the trick. The Street seems to agree.
Important note for Yahoo and newspaper investors: In the last year Monster has signed a series of deals with newspapers, including the New York Times, Milwaukee’s Journal Sentinel and Community Newspaper Holdings, to collaborate on job sites, and Iannuzzi is lukewarm about these ventures at best. In retrospect, he says, resources poured into those deals would have been better spent other places. Question: If these ventures are underwhelming, what does that say about similar online/print deals that Yahoo! has struck? Reuters, Filing, Release.