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Reduced Stake in CareerBuilder for McClatchy

August 13, 2006
Speculation surrounding CareerBuilder’s ownership structure came to a halt when publishing titans Gannett Corp. and Tribune Co. announced plans to give McClatchy Co. a smaller minority share while increasing their stake in the job board giant to 42.5 percent apiece. The change gives CareerBuilder broader and deeper access to new markets, says Matt Ferguson, CEO of Chicago-based CareerBuilder.

Gannett, Tribune and fellow publishing company Knight Ridder were the founding partners of CareerBuilder and had equal stakes. But since Knight Ridder was purchased by rival publisher McClatchy in March, the ownership configuration was thrown into question as Gannett and Tribune considered whether to raise their one-third shares in CareerBuilder. Under the August 1 agreement, which values CareerBuilder at $1.55 billion, McClatchy will receive $310 million and retain a 15 percent stake in the job board company. CareerBuilder is the nation’s largest online job site, with more than 23 million unique visitors and more than 1.5 million job listings. The company also publishes classified ads in newspapers across the country.

McClatchy’s newspapers have added 12 new markets to CareerBuilder’s portfolio, gaining access to Sacramento, California, and Raleigh-Durham, North Carolina, Ferguson says.

The change in CareerBuilder’s ownership structure is the latest ripple in what was a relatively stable job board industry. In late July, Monster and Philadelphia Media Holdings—the new owner of The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com—announced plans to launch a co-branded job search and recruitment Web site.

Philadelphia Media Holdings was formed after McClatchy sold a group of properties it had obtained through the Knight Ridder acquisition to local investors earlier in the year. Philadelphia Media Holdings and CareerBuilder will go their separate ways today, when the co-branded Web site—philly.com/ monster—is scheduled to go live, says Brian Tierney, chairman and CEO of Philadelphia Media Holdings.

"We had the option to stay with CareerBuilder or to go with any other job board in the market," Tierney says. "At the end of the day, we decided on Monster because it offers the most powerful brand and great customer service."

The deal, which took less than two months to complete, is the first of its kind for Monster. The company partnered with Philadelphia Media Holdings because of a familiar brand and its reach in a regional market of some 2 million people, according to Douglas Klinger, president of Monster North America. The two papers circulate a combined 520,000 copies daily, and Philly.com receives 2 million unique monthly visitors.

"The move speaks volumes about which job board is perceived to have the higher quality and brand," says Jim Janesky, managing director of research at Ryan Beck & Co., an investment bank and brokerage firm based in Florham Park, New Jersey.

More changes for the job board industry could be on the horizon. Jody Lodovic, president of MediaNews Group, a privately held owner and operator of 40 daily newspapers in nine states, recently announced talks with Yahoo HotJobs about a relationship in online classified advertising.

MediaNews has agreed to buy four newspapers from McClatchy, which means that if the relationship between MediaNews and Yahoo HotJobs materializes, it may also represent a loss for CareerBuilder. Janesky, however, does not anticipate an exodus from CareerBuilder, particularly because dozens of newspapers remain closely tied to it.

Gina Ruiz