Big Paydays for Niche Job Sites May Enrich HR
The financial success stories last month of two niche job boards, Dice and Mediabistro, not only drew attention to the relatively cloistered segment of the online recruiting industry, but the events also may boost budgets for HR.
“The fact that serious market investors are putting big money behind online recruiting technology elevates these tools in the minds of corporate CEOs and CFOs,” says Shally Steckerl, founder of JobMachine, a recruiting consultancy based in Norcross, Georgia. “They become more relevant, not just a bunch of cutesy things that only HR cares about.”
Darien, Connecticut-based Dice raised more than $217 million on July 17 in its initial public offering on the New York Stock Exchange, while New York-based Mediabistro, which began as a small hub for media professionals in 1999, was acquired July 18 by Jupitermedia Corp. for $23 million.
Such deals, and the accompanying attention from business media, could help recruiting executives make a case for more money. “The more mainstream these tools become, the better for recruiters,” Steckerl says. “CFOs might actually begin to realize that there is a need for something like an IT HR budget.”
The Dice and Mediabistro deals also reinforce a continued positive outlook for the online recruiting industry. “There is no doubt the migration of advertising dollars into job boards and away from print newspapers will benefit the sector,” says Timothy McHugh, an analyst for William Blair & Co.
The deals also point to a growing trend of consolidation among the niche job boards, which could change the industry’s landscape and have a direct effect on how recruiting is done.
“I can see these types of transactions inspiring more merger activity,” says John Zappe, principal and analyst at Classified Intelligence, a research consultancy in Altamonte Springs, Florida.
Jobing.com has been on a shopping spree for geographically specific Web sites for several years. Most recently, the Phoenix-based niche job board purchased Localcareers.com, a Milwaukee-based company that encompasses 400 local and niche employment Web sites.
Industry experts say mergers and acquisitions do arrive with both good and bad news for recruiters. On the positive side, consolidation creates bigger job boards, which could translate into more centralization and lower prices. Bigger job boards also have more money that can be used for product development.
But mergers also add layers of formalities and personnel, which can slow postings and other crucial job board elements, industry experts say.
It’s uncertain how Dice will use the funds from its IPO and whether it will alter its product lineup. The company is in a quiet period until the end of August and can’t comment.
Dice, which was publicly traded on the Nasdaq before plunging into bankruptcy in 2003 and emerging from Chapter 11 several months later, previously stated that the cash will be used for a variety of purposes, including paying down $32 million in debt. It has also said the money will be used as working capital.
Jupitermedia will allow Mediabistro to carry on with business as usual, says Michael DeMilt, vice president of marketing. “It is already a successful business,” DeMilt says. “We don’t plan to change it.”