AOL Deal Scares Monster Holders

America Online may be in the infirmary, but it still wields enough power to send Net stocks flying.

That's what

Monster Worldwide

(MNST) - Get Report

discovered Monday when rival online employment company CareerBuilder announced an exclusive, four-year deal to take over Monster's slot as job-listings provider to AOL.

News of the deal, which is slated to take effect in December, sent Monster's shares down 14% Monday. The stock slid $3.59 to close at $22.51.

The AOL-CareerBuilder deal, which AOL parent

AOL Time Warner

(AOL)

says is worth up to $115 million over the life of the transaction, is faintly reminiscent of the heady days of AOL's late-1990s advertising boom. Back then, companies proudly announced how much they were spending to gain a foothold on the online service, in the hope that Wall Street would reward them for investing millions in a hot piece of online real estate. Those hopes turned out to be realistic, though short-lived. (CareerBuilder, once publicly traded, is now a partnership of

Knight Ridder

(KRI)

,

Tribune

(TRB)

and

Gannett

(GCI) - Get Report

.)

More relevantly, Monster's freeze-out is a flashback to the situation faced a year ago by pay-per-click search engine

Overture Services

(OVER)

. With investors concerned back then about Overture's ability to get online distribution -- that is, to make sure its search results got in front of as many Internet users as possible -- Overture's shares zoomed when a distribution deal with

Yahoo!

(YHOO)

was announced, but plummeted when the company lost its berth on AOL.

Monster, formerly known as TMP Worldwide, derives 62% of its revenue from its online employment operations, with the rest coming from Yellow Pages and an off-line employment advertising business.

On a conference call earlier this year, a Monster executive said that a "big chunk" of the company's marketing expenditures would be spent on AOL and

Microsoft's

(MSFT) - Get Report

MSN.