Monster + News Ltd = Seek Killer??

[Article published by Michael Watkins for technation on Nov 28th 2008]

Monster Worldwide has just struck a deal with News Ltd to buy 50% of CareerOne, News’s online jobs board.

The deal in short, allows CareerOne to employ Monsters search engine for more exacting search results.

Whats interesting here is why now? The market is tanking, job vacancies are evaporating and CareerOne’s Job numbers were down 10% from recent July levels. News CEO John Hartigan explains that the deal “signals an intensifying of our challenge to Seek“.

Possible benefit’s for News, if they are willing to spend the cash during the downturn, include promoting the CareerOne brand while Seek’s financials stall, which could result in more market share for the company next year when markets pick back up. Its a viable avenue to head down, but in order to gain more market share, there needs to be more jobs available and with current employment numbers dropping, that option isn’t looking attractive.

I’ve followed this story for the best part of 5 months now, ever since Monster announced they were heading back into the Australian market earlier in the year, after failing last time they were here. The question that still sticks out for me on this is, how can you realistically expect to be anything more than a distant second to Seek in the online Job’s board market in Australia.

The Bassett brothers company, which is now 26.7% owned by James Packers Consolidated Media Holdings, retains a staggering 60% of the Australian market. That is a colossal piece of market share, which Seek will aim to retain, tooth and nail.

There just doesn’t seem to be a financially attractive or strategically effective way to beat Seek in this sector.

I found that Fairfax Digital’s Jack Matthews’ remarks, sum up the move well,

“[we don't see] the benefit of bringing in a company that’s already tried and failed here. If we had a business that was really successful, we wouldn’t sell half of it.”

Seek has beaten Monster once before…and I can’t see a merger with CareerOne stopping that from happening again.

Seek Killer?? — We’ll wait and see.