Yahoo-HotJobs Deal Alters Recruitment Contest

By: Lucia Moses

CareerBuilder Inc. had a shot at being the No. 2 online career site when it bought Headhunter.net in November.

The opportunity may have been short-lived, however. Reston, Va.-based CareerBuilder — owned by Knight Ridder in San Jose, Calif., and the Tribune Co. in Chicago — may be kicked back to a distant third place because of Yahoo!’s $436-million cash-and-stock bid for HotJobs.com last month.

On the bright side for newspapers, the deal keeps HotJob’s would-be acquirer, New York-based TMP Worldwide Inc., parent of Monster.com, from further expansion — for now.

In the short term, the deal is likely to spell the end of CareerBuilder’s contract as the exclusive provider of job listings to Yahoo!, although some suspect the Sunnyvale, Calif.-based Web portal wasn’t a significant source of traffic for CareerBuilder. Analysts expect Yahoo! to try to get out of the contract so it can get to the business of integrating New York-headquartered HotJobs. “”It’s not going to sit there and let its acquisition lie fallow,”” said John Corcoran, Internet analyst for CIBC World Markets.

CareerBuilder spokesman Barry Lawrence downplayed the Yahoo! deal. “”It’s just a way to drive traffic to the site,”” he said, and “”with or without them, we’ll find ways to drive traffic.””

In the long term, CareerBuilder, the newspaper companies that own it, and unrelated newspapers face a much bigger competitor for their highly profitable help-wanted advertising revenue. Yahoo! and HotJobs combined will boast some 7 million resumes, compared with CareerBuilder’s 3 million, and a suite of services to woo major advertisers in search of employees. Expanding its portal’s job-search component makes Yahoo! a tougher competitor with newspaper Web sites for passive job seekers, Forrester Research Inc. Research Director Charlene Li said.

CareerBuilder has the advantage of its relationship with Knight Ridder and Tribune newspapers, which promote the job site through CareerBuilder-branded help-wanted sections in print.

Newspapers remain the biggest single medium for recruitment advertising, although the Internet is gaining. According to a 1999 survey for staffing services firm Olsten Corp., newspaper help-wanted ads were used to fill 43% of jobs, down from 48% two years earlier. The same survey reported 5% of jobs were filled by the Internet, up from 3% the year before. That share will grow, fueled by the Web’s low cost, ease of use, and future job seekers who grew up using the Internet, analysts said.

How much? Predictions vary widely, with some estimates calling for online recruitment revenue to grow to as little as $2 billion or as much as $8 billion by 2005 from $1 billion last year.

At stake for newspapers is a large source of revenue. The help-wanted category represented 17.9% of all newspaper ad revenue in 2000 (before the job market sank like a stone), and profit margins can range from 60% to 80%, according to analysts.

In contrast to the Web, newspapers are criticized for using their local-market dominance to charge hefty prices for recruitment ads. Cost isn’t the only issue, though, Li said. Newspapers should be more aggressive when it comes to combining their print and online sales efforts. And while they have strong relationships with recruiters, she said, they need to accommodate those customers better. “”They want more display ads, and they want ads out of the classified section,”” Li said.

Charles Diederich, director of recruitment advertising for the Newspaper Association of America in Vienna, Va., said it’s true that certain jobs are cheaper to post online than in newspapers, but some now question how well the Internet does at matching job seeker and employer. However, if newspapers lose effectiveness, he said, “”They’ll have to charge less.””

Job Sites, By the Numbers



Unique Monthly Visitors, November (In Millions)
HotJobs.com 6.6
Monster.com 5.9
CareerBuilder 1.2
HeadHunter.net*1.1

Time Spent Per Visit
Monster.com25 min. 19 sec.
HeadHunter.net*18 min. 13 sec.
CareerBuilder7 min. 54 sec.
HotJobs.com6 min. 32 sec.

Resumes
Monster.com14.5 million
HotJobs.comMore than 5 million
CareerBuilder3 million
Yahoo!Less than 2 million

*Now owned by CareerBuilder

Sources: Companies, Nielsen/NetRatings Inc

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