Here’s Why the Deal Sucks for Monster

In all the hoopla last week surrounding the acquisition, most pundits overlooked how bad it was for Monster and its job board brethren.

According to a source who wanted to remain anonymous, Recruit Co., Indeed’s buyer, had a deal with Monster on the table as well. Indeed’s pricetag was rumored to be $1.2 billion while Monster wanted $1.4 billion.

So, a measly $200 million apparently separated the two options. And although Indeed’s revenues are private, one can make an educated guess that it currently doesn’t touch Monster’s.

But since most companies buy other companies for where the puck is going and not where it is, the choice to go with Indeed proved the growth story was with Indeed. The growth story for Monster, in contrast, is likely over, and choosing Indeed highlights that fact.

One job board CEO I spoke to put it like this:

I think it is a telling sign that a large foreign entity would bypass buying a huge traditional job board with big brand in the US to go with an aggregator model. It shows a sea change in the thinking of buyers out there.  

Content originates and stays on the employer site, but the aggregator creates visibility and exposure, and also applies an Adwords model to the employer’s jobs to allow the employer to increase exposure.  The question is, ‘Is the age of acquiring and consolidation of traditional job boards dead?“

Rumors of Monster’s impending sale remain hot. The latest point to either private equity or Microsoft taking over the company. Employees I know at the company are excited. We’ll see what happens.

And should we expect a feeding frenzy on the heels of Indeed? Probably … or at least as frenzied as the employment space can get. The job board CEO I spoke with also had an opinion on that as well.

How does this impact LinkedIn?  

I think that LinkedIn should consider looking at the No. 2 or No. 3 player in the vertical job search space, and offer a strong competitive aggregator solution that pulls jobs from every employer in the US, and then uses their extensive matching technologies and user database to provide more in-depth services than what the aggregators currently offer.

Eventually, LinkedIn can use those aggregated jobs to acquire more users, by forcing folks to apply using LinkedIn.

I agree it impacts LinkedIn, but think it makes a lot more sense for an established board to make a play for an aggregator. CareerBuilder buying Simply Hired has been a rumor floating around. Maybe Indeed will be a catalyst for that to happen.

In light of the acquisition, Indeed cofounder Rony Kahan said, “This business model of including all the jobs, and having companies pay via clicks on ads instead of by post, represents the way the online recruitment industry is evolving.”

If he’s right, there could be a lot of gobbling going on with Thanksgiving just a few months away. And Monster better be hoping for an early Christmas.