Monster and CareerBuilder are facing fresh challenges from upstarts like LinkedIn. To cope, some may have to buy or get bought
Musicians looking for work on a cruise ship have not one, but at least two Web sites where they can search for ocean-liner jobs. That may sound like a narrowly defined niche to have its own series of job-search sites, but it's part of a growing number of sites dedicated to matching employers and job seekers in very specific pockets of the job market. There are also sites catering to pharmacists, stay-at-home moms, and job seekers in particular regions.
And some of these niche job-search sites are turning up the competitive heat on online recruitment stalwarts like Monster.com, CareerBuilder.com, and Yahoo's (YHOO) HotJobs.com. They're not alone. There's also a vanguard of sites like LinkedIn.com and Craigslist.com, which specialize in interactive, social-networking features, that are grabbing share in the online search market that by some estimates is worth as much as $5.9 billion.
Niche sites controlled about 64% of the online job-search market in 2006, up from 39% in 2004, according to Gordon Borrell, chief executive officer of consultancy Borrell Associates. The rivalry will only accelerate this year, as demand for online recruitment surges. A recent HotJobs.com survey indicates 40% of workers plan to look for a different job in 2007. Much of that searching will happen online.
Job Web 2.0
The Big Three have the most to lose. In the past six months, visits to Monster, HotJobs, and CareerBuilder dropped by 23.7%, 18.4%, and 7.1%, respectively, according to Hitwise. "The generalist site is falling away to that very strong niche," says Borrell. It didn't help that Monster Worldwide (MNST), Monster.com's parent, went through management changes and a stock options review, while Knight Ridder, one of the owners of CareerBuilder.com, was sold.
Who's gaining? In large part, sites that make up the newly emerging interactive Web. Sales at LinkedIn.com, a social network of professionals, rose more than tenfold in 2006, says CEO Reid Hoffman. LinkedIn's backers include Netscape co-founder Marc Andreessen and Greylock Partners, which has also invested in new Web stars including Digg.com and Facebook.com. The business is profitable and this month it expects to raise another round of funding for a guerilla marketing campaign and international expansion. "We are beginning to cross into the mass market," Hoffman says. "Our business has arrived," (see BusinessWeek.com, 9/11/06, "Social Networks: Execs Use Them, Too").
To be sure, the incumbents are still growing, owing to the strength of the overall job-advertising market. CareerBuilder.com's sales rose 38% in the first nine months of 2006. But such fortunes could change dramatically if, as analysts expect, the market cools as soon as 2008.
To cope, CareerBuilder and its ilk are regrouping in some dramatic ways. Monster.com more than tripled its sales force in 2006, to 1,800. It's also relying more on partnerships such as with newspaper chains like Freedom Communications, which owns 36 newspapers including The Orange County Register, to expand in local markets (see BusinessWeek.com, 12/6/06, "Newspapers' New Online Delivery Boy"). Rival HotJobs.com has recently set up a slew of new newspaper partnerships, too.
More revamping may be in order, analysts say. Some of the Big Three may need to gobble up successful niche sites, catering to unique audiences, or sites that offer interactive features. "We are planning to be a consolidator," says Doug Klinger, president of Monster North America (see BusinessWeek.com, 9/6/05, "The Job of Challenging Monster"). Jobster.com now lets people use tagging, making searching for keywords easier. In January, the site will start letting people post video résumés. "The basic job-board functionality hasn't changed in 10 years," says Jason Goldberg, Jobster's CEO. "But there's a whole generation of people growing up on MySpace. We want to look more like a social network or an online dating site."
Consolidation may also spread to include other Internet portals as well as cable and media players. On Dec. 28, content provider Jupitermedia (JUPM) acquired jobs aggregator JustTechJobs.com. Search engine Google (GOOG), which already lets users search for jobs through its Google Base, might want to get deeper into online job search, which accounts for one-fourth of all online ad revenues, says Borrell. "I wouldn't be too surprised if Google teamed up with or bought CareerBuilder or Monster," he says. "It's the dance of the elephants, and Google is without a dance partner." Google declined to comment, and Monster and CareerBuilder execs say their shareholders aren't looking to sell.
Many Potential Buyers
Perhaps a partnership is in the works, instead; just in November, CareerBuilder.ca entered into a strategic partnership with portal Lycos Canada to serve up job listings to Lycos searchers. Yet, historically, Google has shown interest in acquiring key properties outright.
Google rivals Microsoft (MSFT), eBay (EBAY), and Yahoo, which owns HotJobs.com, could be on the lookout for acquisitions as well. Many of these giants already have connections to up-and-coming job sites. LinkedIn's Hoffman got his start at PayPal, an eBay property. Indeed, at least three of LinkedIn's investors have present or past connections to the auctions giant; eBay wouldn't comment on its online jobs strategy.
Another potential acquirer: Fox Interactive Media, part of News Corp. (NWS) and owner of social-networking site MySpace.com. Today, MySpace has a small jobs section powered by SimplyHired.com, one of whose investors is Fox Interactive. Perhaps by making more investments or acquisitions, Fox could expand that business and MySpace Jobs, Borrell says.
Job Search's Future: Community?
Cable companies, increasingly looking to own content, could also join the fray. In November, Monster announced a partnership with Freedom Communications, which owns eight television properties across the country. And Monster is working with partners to launch TV and cable jobs channels, says Klinger. On Dec. 26, Monster Worldwide added Philip Lochner, a former Time Warner (TWX) executive, to its board of directors.
For now, pointing to their revenue growth, the Big Three deny their foothold on the market is slipping. CareerBuilder CEO Matt Ferguson says tools like social-networking job sites are yet to be proven: "We don't believe there's such a thing as a community of job seekers," he says.
In December, Monster.com kicked off a new ad campaign with the tagline "Monster works for me." Some employers and job seekers would beg to differ—and they're taking their work somewhere else.