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WIKI ANALYSIS
Monster Worldwide, Inc. (NYSE:MWW) owns Monster.com, the number three visited online job recruitment website in the U.S. with 1.1 million job listing and over 40 million resumes. [1] Unlike its competitors, Yahoo! HotJobs, Gannett and McClatchy's CareerBuilder, Monster has other free services including educational and financial guidance. [2] Monster.com generates revenues from employers paying to post job listings and look at resumes. Advertisers also pay Monster to advertise on its websites. From March 2007 to March 2008, the company saw its revenues decline by $500,000 in North America and its total growth rate drop from 15% to 13%, because the stagnation of the U.S. economy led fewer employers to post job-listings.[3] In addition, the decrease in North American revenues comes from competition with CareerBuilder and other online job recruitment sites. CareerBuilder provides more ways of connecting employers and jobseekers because it posts resumes on 1000 different local newspapers and media websites; therefore, giving people more chances to be hired. [4] Subsequently, Monster’s market share, the percentage of the online job recruitment audience, decreased 54% in 2007.[5] By building up its international segment with international web domains, however, the company's total revenue continued to grow in 2007. [6]
Business Overview
North American Segment (48% of total revenue, 21.5% operating income)
The Careers segments make money through employers looking to recruit. Jobseekers use the site for free. Employers are charged between $100-400 for 30-day listings depending on the local market and number of listings, and memberships for viewing the resumes posted cost between $1000-$2000. [8] Monster has 200,000 member companies with 20 industries and 23 occupational categories. [9] The North American division has been struggling with flat growth rates due to a decrease in listings, while expenses increase.[10] The segment had a 43% increase in marketing and promotion. [11] Costs for researching new technology and bettering the performance of the website increased 59%. [12] These changes came in order to attract more costumers for a greater market share. At the same time, In 2005, Monster downsized and focused on recruitment and advertisement.[13] The North American segment had 18% less employees in 2008 than 2007 due to more downsizing continuing fro 2005, thus saving 7% in salary expenses. [14]
International Segment (36% of total revenue, 6.1% operating income)
The company also has websites for jobseekers in different countries. After the US, Germany has the highest revenue making up 10% of the total revenue.[15]The international segment (in East Asia, Europe, and South America) continues to see its growth rate increase, earning 36%, 29%, and 24% of its total revenue internationally in 2007, 2006, and 2005, respectively. [16]
Advertisement and Fees Segment (12% of total revenue, -8.6% operating income)
The Advertisement and Fees segment includes sites like FastWeb.com, Tickle.com, and Military.com. The sites target students through scholarship opportunities, IQ tests, personality quizzes, and jobs with the military. These websites puts ads on these free sites to sell consumers services like a degree from an online university. [18] Unfortunately, even with a plan to attract more of the $30 billion internet advertisement market, the Internet Advertisement and Fees segment had an annual revenue growth of -14% in 2007, down from $39 million to $34 million. [19]
Financial Performance and Growth
| Metric | 2006 (FY) | 2007 (FY) | 2008 (Q2) |
|---|---|---|---|
| net profit margin | 9.96% | 11.50% | 6.59% |
| market share | 36.2% | 11.51% | 4.32% |
| total revenue (millions) | $1,116.68 | $1,351.31 | $370.37 |
Key Trend and Forces
As the economy heads toward recession, revenue growth decreases
Monster is affected by changes in GDP and unemployment. In the US, fewer employers looked to hire in 2007, indicated by a decrease of the 20,000 points in non-farm payrolls (the number of jobs added). [25] Because there were fewer jobs available, Monster reported a loss in job postings in all its occupational categories. [26] The Monster employment index, which shows the online job demand, also decreased by 12% from May 2007 to May 2008. [27] On the other hand, the number of resumes posted increased because more people were looking for jobs. Unfortunately, Monster doesn’t generate revenues from jobseekers; they come from employers. Since, the demand for jobs decreased, the total revenue growth rate fell 2%. [28]
Monster uses the international market to grow
Already more than half of Americans have internet access, so the internet growth rate is becoming smaller. With only 137 million Chinese internet users in 2007, there are still over 1 billion Chinese yet to acquire Internet access and China's internet growth rate continues to increase (23% in 2006 and 23.4% in 2007). [29] In 2006, Monster partook in a partnership with ChinaHR to tap into the Chinese market. [30] The company bought 44.4% of ChinaHR’s shares after paying $51 million and helped jump-start the Chinese online recruitment market with its technology,[31] causing ChinaHR's site to became number one in the country, with 15 million daily page views and more than 100,000 new job posts each day.[32] With a goal to buy the rest of ChinaHR by end of 2008, Monster is betting on earning more in the Chinese market in the future. [33] Monster has a presence in 40 countries, reaching more than 50% of the world’s workforce.[34] The company plans on reaching 90% of the world through its projects in Mexico, Turkey, Russia, and the Gulf of the Middle East with low-cost launches in smaller markets.[35]
Monster's Audience is Declining
Of around 15 million employers in the U.S., Monster did business with approximately 2% in 2007 and has been losing its audience to its competition since 2005.[36] In 2007, in an attempt to regain its audience, Monster cut costs by $150-170 million and spent around half of it to promote its brand. [37] Monster also purchased Affinity Labs, Inc. in January of 2008, communities specific to different professions that include sites such as NurseLink.com and PoliceLink.com. [38] The company wanted to attract consumers to its site with free news, videos, jobs, and discussions. Monster's visits increased by 26% in the following month. [39]
Social networking sites pose a threat
Craigslist, a social networking community with a growing unique audience of 3 million, charges nothing for job postings (except for the maximum of $75 in heavily populated cities). [40] Online social networking threatens online job search engines because it provides a free and more direct way of connecting jobseekers and employers. Even with 220 enhancements on the sites to keep its customers, Monster fears losing revenues from 1) advertisers if more consumers turn to social networking sites and 2) employers as they look for workers on these free sites.[41]
Competition and Market Share
Online job recruitment sites use their competitive prices, brand recognition through their advertisements, their user-friendly sites, and supplementary free services to attract resumes. Though Monster has similar pricings, it is behind CareerBuilder and Yahoo!HotJobs in market share. In 2007, Monster had 1.1 million listings and 41 million resumes. [42] Monster has free educational and financial services that none of the other have. The competition, however, has a few advantages of its own, as isted below:
- CareerBuilder: ranked number one job search website since 2006 with 1.5 million listings and 13 million resumes; has more than 1000 partnerships with media agencies and newspapers; which unlike other employment sites, helps listings reach more people and charges a flat rate of $389 for a 30-day post; Microsoft joined as one of the parent companies, along with Gannett (GCI), McClatchy Company (MNI), and Tribune Company (TRB). [43]
- HotJobs: charges based on the city ($90 in Tuscan, $380 in Los Angeles) [37, has 1 million listings and 20 million resumes posted; owned by Yahoo! (YHOO), the merger between Yahoo! and Microsoft (MSFT) will give HotJobs another means of growth. [44]
- Indeed: a basic search engine for jobs; unlike the other providers, it has no resume posting and no fees; individuals search for listings and directly apply to the employer; the company is private with institutional investors including New York Times Company (NYT) and Union Square Ventures. [45]
Regardless of its high number of resume postings, revenues are made from employers and Monster overlaps by 50% with the other sites. Monster is third in the market share of U.S. visits to the website, as listed below:
| Domain | Market Share of U.S. job website visits | YoY (07-08) |
|---|---|---|
| CareerBuilder | 12.96% | -6% |
| HotJobs | 11.18% | 84% |
| Monster | 4.32% | -54% |
References
- ↑ Cosumer Search Job Sites Information
- ↑ Monster Worldwide About Us
- ↑ Monster Worldwide feeling the impact of an economic slowdown
- ↑ Microsoft Acquires Equity Stake in CareerBuilder
- ↑ Hitwise Shows Positive Numbers for Careerbuilder, Indeed
- ↑ Monster Worldwide feeling the impact of an economic slowdown
- ↑ MWW March 2008 10-K, Item 1: Business, page 2]
- ↑ Monster employer site
- ↑ Hoover's profile: Monster's Worldwide, Inc.
- ↑ MWW March 2008 10-K, Item 6: Selected Financial Data , page 28
- ↑ MWW May 2008 10-Q Item 2: Management Discussion and Analysis of Financial Condtion and Results of Operation, page 27
- ↑ MWW May 2008 10-Q Item 2: Management Discussion and Analysis of Financial Condtion and Results of Operation, page 27
- ↑ MWW March 2008 10-K, Item 1: Business, page 1
- ↑ MWW May 2008 10-Q Item 2: Management Discussion and Analysis of Financial Condtion and Results of Operation, page 27
- ↑ MWW May 2008 10-Q Item 2: Management Discussion and Analysis of Financial Condtion and Results of Operation, page 27
- ↑ Downgrading Monster Worldwide
- ↑ MWW March 2008 10-K, Item 1: Business, page 2]
- ↑ MWW March 2008 10-K, Item 1: Business, page 2
- ↑ Downgrading Monster Worldwide
- ↑ Google Finance Monster WorldWide, Inc.
- ↑ ComScore Media Metrix Releases Top 50 Web Rankings for March 2008
- ↑ MWW March 2008 10-K, Item 1: Business , page 3
- ↑ Google Finance Monster WorldWide, Inc.
- ↑ Google Finance Monster WorldWide, Inc.
- ↑ Downgrading Monster Worldwide
- ↑ Monster's Index
- ↑ May 2008 Monster Worldwide, Inc. Press Release
- ↑ Downgrading Monster Worldwide
- ↑ China to overtake US in number of Internet user in 2009
- ↑ MWW March 2008 10-K, item 1A: Risk Factors, page 14
- ↑ MWW March 2008 10-K, item 7: Management's discussion and analysis of financial condition and results of operations, page 39
- ↑ Monster International
- ↑ MWW March 2008 10-K, item 7: Management's discussion and analysis of financial condition and results of operations, page 40
- ↑ MWW March 2008 10-K, item 1A: Risk Factors, page 15
- ↑ MWW March 2008 10-K, item 1A: Risk Factors, page 15
- ↑ Monster Worldwide Q1 2008 Earnings Call Transcript
- ↑ Monster expanading but stock is on vacation
- ↑ MWW March 2008 10-K, Item 1: Business, page 2
- ↑ Monster Worldwide Q1 2008 Earnings Call Transcript
- ↑ Craigslist vs. Monster vs. CareerBuilder
- ↑ MWW March 2008 10-K, item 1A: Risk Factors, page 10
- ↑ Craigslist vs. Monster vs. CareerBuilder
- ↑ CareerBuilder Company Profile
- ↑ About Yahoo!HotJobs
- ↑ Indeed Job Trends
- ↑ Market share of U.S. visited employment sites
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