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AUGUST 21, 2003
By Olga Kharif Who's Afraid of Monster.com? [Page 2 of 2] For those newspaper outfits, securing a lock on this market, which Morgan Stanley expects to grow to $1.16 billion annually in 2005, is crucial to offsetting a decline in print help-wanted advertising. Traditionally, such ads have contributed about 30% of newspapers' classified revenue -- which, in turn, accounted for about 40% of their total advertising sales, says Edward Atorino, an analyst with Blaylock & Partners. But the print job-ad market dropped from $8.7 billion in 2000 to $4.2 billion this year, according to Morgan Stanley. The papers see online job ads as one way to rebound. A YAHOO EDGE. Meanwhile, HotJobs is planning to launch its own advertising attack on Monster at the end of the third quarter. It will highlight its technological integration with the Yahoo portal, which has offerings such as Yahoo Finance and Yahoo search. It figures that pitch could appeal to people who want to keep their online lives -- everything from a stock portfolio to e-mail -- in one place. And because it doesn't have to write Yahoo a check every month, HotJobs enjoys low costs in relative terms, says Daniel Finnigan, general manager of HotJobs. It's even possible that Yahoo could start a price war. The site is in a strong position because 70% of the people who looked for jobs online last month visited the Yahoo portal. Says Finnigan: "We're in an investment mode." Competition in the help-wanted space is only likely to increase. Search engine Google might emerge as a competitor in a few years, says Jonathan Gaw, an analyst with tech consultancy IDC -- though a Google spokesperson says it has no plans to do so at the moment. And Monster intends "to continue to get our fair share of the market," Sileck declares. Meanwhile, Monster Worldwide's other businesses are still ailing. Its recruitment advertising and direct-marketing businesses were flat sequentially in the second quarter and down year over year. Still, many analysts believe that Monster.com's revenues will hold steady even if its traffic dips. It takes several months for corporations to reevaluate their career-site options, says Gaw. And Monster still has double the number of resumes of CareerBuilder, its nearest competitor, says Juliana Deeks, an analyst with market consultancy Jupiter Research. HIRING RECOVERY? Moreover, the economic recovery should give it a boost, along with everyone else. New jobs nationwide are likely to grow by about 250,000 this year -- and by 1.2 million in 2004, estimates Sophia Koropeckyj, a labor economist at think tank Economy.com. Some even call Monster's decision financially prudent. Kelly Flynn, an analyst with UBS Warburg, thinks investors would have penalized Monster for renewing the America Online and MSN deals. Another consideration is that Monster has "probably acquired all of the customers they were going to acquire [through the portals]," says Christie Nordhiel, a marketing expert at Northwestern University. So, Monster may remain the meanest player on the block for quite awhile longer. But its rivals are biting at its knees. And Monster's separation from the portals will leave it more vulnerable than it has been in years.
 Kharif cover technology and the markets for BusinessWeek Online.
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