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Yahoo, Newspapers Ink Historic Job Board Pact

The deal, which takes effect immediately, gives job board giant Yahoo HotJobs a much-needed shot in the arm and cements a trend in inter-media alliances between job boards and newspapers.

November 21, 2006
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Yahoo Inc. and a consortium of seven national publishing giants are forging one of the largest multimedia partnerships in history, allowing classified advertisements to be distributed online and across 38 states through a network of 176 newspapers.

The deal, which takes effect immediately, gives job board giant Yahoo HotJobs a much-needed shot in the arm and cements a trend in inter-media alliances between job boards and newspapers.

"The partnership takes a No. 3 player and brings it into back into contention," says Peter Zollman, founding principal of consulting firm Classified Intelligence.

Under the agreement announced Monday, November 20, HotJobs will power co-branded career sites for print partners Hearst Newspapers, Belo Corp., Cox Newspapers Inc., Journal Register Co., Lee Enterprises Inc., MediaNews Group and E.W. Scripps Co.

Terms of the deal were not disclosed, and both the publishers and Yahoo were vague on financial projections.

HotJobs expects that combining its job listings with those of its print partners will enable it to secure leading market positions in 20 of the country’s top 25 markets, according to Daniel Finnigan, senior vice president at the job board. The publishing companies dominate several of the nation’s largest markets, including Dallas, St. Louis, Atlanta, Salt Lake City, Houston and San Francisco, and will compete in others with rival job boards CareerBuilder and Monster.

Most industry experts contend that HotJobs will finally gain momentum from the deal. The job board has had a difficult time benefiting from the synergies it attained when Yahoo purchased the company in 2002. In spite of Yahoo’s tremendous Web audience, HotJobs had been a distant third in the job board industry. According to Corzen, a New York City-based statistical data provider in the recruitment industry, CareerBuilder has a market share of 39 percent, Monster has 37 percent and HotJobs has 25 percent.

Market share, while important, is only one measure of success, Zollman says. Creating a competitive advantage for HotJobs will depend on other factors, such as recruitment results.

"Producing results for advertisers is what’s important," he says. "If a recruiter is not satisfied with an outcome, he simply won’t return to the job board."

The partnership is expected to shake things up not only in the job board industry, but also in publishing.

"This is a turning point for the newspaper industry," says Dean Singleton, CEO of MediaNews Group.

The publishers will be able to tap new, younger audiences and generate fresh revenues by gaining access to Yahoo, which draws 130 million unique visitors each month.

Several members of the consortium admit having explored similar partnerships with other job sites, including CareerBuilder and Monster, before settling on HotJobs, whose key advantage is being part of Yahoo, a multipurpose Web portal that attracts visitors for various reasons. CareerBuilder and Monster are exclusively job board search engines.

"The world is changing rapidly," Singleton says. "Yahoo has better technology and a better platform that will allow us to keep up with the pace."

For its part, HotJobs will be able to personalize its international brand and attain local reach through the partnership. Furthermore, it will benefit financially since the local sales forces of the newspapers will begin selling ads for the job board, Zollman says. Many of the newspapers involved in the partnership are local leaders in recruitment advertising, including The Dallas Morning News, Houston Chronicle and The Atlanta Journal-Constitution, he explains.

Both Yahoo and its partners believe the consortium will expand beyond the seven founding print partners.

"I know of many newspapers that have expressed interest in joining the group," Singleton says.

It could spell trouble for CareerBuilder, which has built its business through strategic partnerships with newspapers. CareerBuilder has a network of some 190 print partners. The company’s print allies are derived from newspapers owned by founding partners Gannett and the Tribune Co., as well as McClatchy, which gained a 15 percent stake in the company in the summer.

"We expect to maintain our leadership position in top markets nationwide," says Jennifer Sullivan, a spokeswoman for CareerBuilder. The job board has been pursuing a strategy of diversification. This month the company announced a strategic partnership with Lycos Canada, one of the country’s most popular online sites. In addition, the company joined forces with India’s largest Web site, Naukri.com, in September.

--Gina Ruiz

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