AOL, MSN Partner With CareerBuilder

By: Ann M. Mack (Adweek IQ) Updated at 11 a.m. Eastern Standard Time, Aug. 5

AOL Time Warner's America Online struck a four-year strategic alliance Monday with CareerBuilder.com, valued at up to $115 million. Early Tuesday, Microsoft Corp. said it also would partner with CareerBuilder.

Both AOL and Microsoft are ending alliances with Monster.com. Shares of Monster's parent company, Monster Worldwide, tumbled nearly 14% following AOL's announcement Monday.

Under the terms of that deal, CareerBuilder.com will power the Careers and Jobs areas of several AOL brands. The online job market also will be promoted across many AOL sibling properties, including Time Inc. Web sites and CNN.com.

The agreement, which begins in December, involves a combination of performance-based elements and guaranteed payments.

The deal will give AOL, CompuServe, and Netscape users access to CareerBuilder.com's 400,000 updated job postings, which are pulled from online and offline newspapers nationwide through the Chicago-based company's ties to Gannett Co. Inc., Tribune Co., and Knight Ridder. AOL members will also be able to use online products, such as a personal search agent that hunts for job opportunities in expressed areas of interest and automatically e-mails them to the job seekers.

One of AOL's rivals, Yahoo!, in February 2002 bought HotJobs.com, an acquisition that has contributed to the Web portal's efforts to diversify its revenue streams. In the second quarter, for instance, year-over-year revenue for Sunnyvale, Calif.-based Yahoo's listings services grew 29% to $32.3 million, driven in large part by incremental revenue from the jobs site.

Monster Worldwide Chief Financial Officer Mike Sileck told The Associated Press that Monster had made the decision not to extend either deal.

He said the move was part of a broader strategy that would save the company $50 million a year -- money it could spend on improving its targeting of job seekers and advertising to prospective job posters, who pay the bills.

"Our clients, who are employers, the advertisers, have been clear with us: there's plenty of traffic, what they need is more targeted traffic," Sileck said.

Together, MSN and AOL accounted for about 25% of Monster's traffic, Sileck said, which totals about 15.6 million unique visitors per month, according to comScore Media Metrix.

Microsoft said its deal with Careerbuilder.com was valued at $150 million in referrals, advertising, and other fees.

Banc of America Securities equity analyst Marta Nichols said the real impetus behind the deal is the changed industry landscape, with Monster's main competitors better-capitalized than ever. CareerBuilder.com is backed by three deep-pocketed newspaper companies, while HotJobs, the No. 2 site, is owned by Yahoo!

Nichols said Monster may have decided it had done enough work building its brand and no longer needed the portals' help.

Credit Suisse analyst Lachlan Drummond added: "We have long held the view that newspapers can be in control of their long-term destiny online, and CareerBuilder is proving to be a platform in the help wanted sector to execute upon. Careerbuilder has been gaining traffic and revenue share from Monster for some time now, and we believe that this deal will jumpstart Careerbuilder towards parity for the intermediate to longer term. ... Newspapers have shown their ability to grow their online operations through the recession while Monster did not."

Jupiter Research values the online recruiting industry at $660 million, the largest single segment of the $1.6 billion online classifieds market, which also includes ads for such things as cars and homes.