Pays $61M to Get into Social Networking

Career site Monster Worldwide has bought social networking startup Affinity Labs for $61 million in cash, the two companies said today. A jobs site getting into business networking makes a little more sense than, for example, Cisco buying and Five Across, but the purchase price seems rather high. Affinity was just getting off the ground and had raised only $6 million from Mayfield Fund and Trinity Ventures.
Affinity Labs’ products consists of seven recently launched sites aimed at various professions, among them the informatively named NursingLink, PoliceLink and ArtBistro. None of them are seeing traction yet — VentureBeat reports fewer than 500,000 visitors per month in total.

Update: The company contacted us to say it has 800,000 visitors per month and about a million registered members. Affinity CEO Christopher Michel contended that the acquisition price was appropriate given Affinity was generating “not a small amount of revenue” through highly targeted advertising including email newsletters and lead-generation. He also pointed out that Goldman Sachs released an analyst note praising the acquisition. At the same time, shares of Monster hit a two-year low today due to forecasted online recruitment declines.
There is some history here — Monster was already providing advertising to Affinity and Affinity was giving Monster account holders access to its sites. Further, Affinity CEO Christopher Michel had sold Military Advantage, also a Mayfield investment, to Monster for $39.5 million in 2004 after raising $31 million in funding, so maybe the shareholders were able to defer a better return to a few years later.
At last check, shares of Monster (MNST) were down $1.14 at $27.79.