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Sat, Aug 25, 2001 - Page 24 News List

Monster.com's rivals get ready for an uphill battle

TOP RECRUITERS Despite the slow economy, one online job-finding company manages to make a profit while expanding overseas and absorbing key rivals

By Stephanie Stoughton  /  NY TIMES NEW SERVICE , MAYNARD, MASSACHUSETTS

From the outset, Jeff Taylor, chief executive at Monster.com, has stopped at almost nothing to get his company's name in front of the public. Taylor with the company mascot at corporate headquarters in Maynard, Massachusetts.

PHOTO: NY TIMES

From the outset, Jeff Taylor has stopped at almost nothing to get Monster.com's name in front of the public.

The company's mascots -- colorful bug-eyed beasts with sharp teeth -- scream from the sides of buses, in subway stations, and on blimps. The chief executive himself has become known for his public stunts, including blimp water-skiing in response to a challenge from Virgin Group founder Richard Branson.

"I believe enough in this brand that I'll put myself in front of it," said Taylor, a 40-year-old marketing mastermind who admits that delivering on his promise to Branson was not his "most relaxed moment."

Taylor's aggressive marketing has helped make Monster.com the leading online recruiting site. The company is not only making money, it's even flourishing in the current slower economy, expanding overseas, and absorbing key rivals on the Internet.

TMP Worldwide Inc, the New York recruiting firm that bought Monster.com about six years ago, credits the online job-recruiting service for fueling its growth.

While many Internet companies are hemorrhaging money, Monster.com has been profitable for more than a year. In the second quarter, Monster.com contributed more than a third of TMP's commissions and fees, and posted an operating profit of US$36.1 million.

Starting from a rudimentary job-listing board in 1994, Monster.com has expanded its offerings to include a resume database, searches for "prescreened" executives, career advice, and an automated recruiting Web-based software that filters candidates from a stack of resumes.

Taylor likes to tell the story about how he once invited newspapers to join him on the Net. They never took him up on the offer. But now that the rah-rah Internet days that fattened newspapers are fading away, it looks like he is eating some of their lunch.

A report last month by William G. Bird, a publishing analyst with Salomon Smith Barney, suggests that Monster.com is the leading or number two help-wanted franchise in the US, with as much as a 10 percent market share in the top 25 major markets. In highly wired cities like Boston, San Diego, and San Francisco, its market share is much larger.

"While we do not believe newspapers face obsolescence any time soon, a more likely outcome is sliding market share followed by reduced ad pricing and margin compression," Bird wrote. "In many respects, the Internet represents a phantom menace to the newspaper industry."

While some analysts believe Monster.com has become an unbeatable force in online job recruiting, not everyone agrees. Like other Web companies that soared to phenomenal heights, Mons-ter.com is watching its growth rate slow as the economy cools and the Internet matures, turning into an essential yet familiar technological tool.

With hiring slow and the short-term economic outlook uncertain, some corporate customers have avoided signing long-term contracts. That means Monster.com's days of triple-digit sales growth, which have been fueled by acquisitions, may be waning.

In the second quarter which ended onJune 30, Monster.com reported commissions and fees of US$142.2 million -- a 64 percent increase over the US$86.5 million in the year-earlier period.

The company makes most of its money by charging companies US$295 or more to place ads online.

At the same time, Monster.com faces increasing competition from newspapers, niche job sites, and companies offering recruitment management tools.

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