Major online job boards jockey for position - HR News - America Online signs contract with CareerBuilder instead of Monster Worldwide Inc

HR Magazine, Oct, 2003 by Bill Leonard

The two largest job boards on the Internet shuffled the marketing deck in September when CareerBuilder announced that it would replace Monster as the exclusive job-listing provider for America Online (AOL) and Microsoft's MSN--two of the largest portal sites on the Internet.

The announcement sent the stock prices for Monster Worldwide Inc. into a tailspin, with the stock losing more than 20 percent of its value in less than a week. Even with Monster's sharp drop in stock prices, it's not completely clear who is really coming out ahead in this mega-marketing switcheroo.

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"This is not business as usual for Internet job boards. It's a huge change in how the boards are going to market themselves," said Bruce Murray, president and CEO of Corzen Inc., a New York-based marketing research firm that tracks trends in recruitment advertising. "But this is one of those strange circumstances where it actually appears to be a good deal for everyone involved."

According to Murray, Monster has such strong name recognition and a top position in the market that the arrangements with AOL or MSN no longer brought in new customers or increased traffic.

"AOL is losing subscribers, and executives with Monster just didn't see the value of spending huge amounts of money to extend their exclusive marketing agreement," Murray said.

Officials with Monster claimed the decision not to renew their agreements with AOL or MSN would save the job board more than $50 million per year. A spokesperson with CareerBuilder said the new marketing arrangements are the first step to becoming the No. 1 job board on the Internet and will help persuade more employers to list their job openings on the web site, which is owned by three large news-paper publishers--Knight Ridder Inc., Tribune Co. and Gannett Co.

"It won't happen in four or five months, but over time I think this will make us the traffic leader," said Matt Ferguson, chief operating officer of CareerBuilder.

Such marketing arrangements with giant Internet portals don't come cheaply either. CareerBuilder will pay AOL as much as $115 million over four years and will pay Microsoft nearly $150 million over the next five years.

"It's an investment that CareerBuilder had to make,"said Murray. "With its affiliation with the three large newspaper chains, CareerBuilder definitely has very strong content. But it lacked a strong presence on the Internet. I think this marketing agreement should boost its name recognition significantly."