Case Study of Monster Inc'

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Case Study of Monster Inc.

• By Donatas Sumyla

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(No Transcript)
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Content

• Introduction
• Online Brokers
• Company Overview
• Monster.com
• GBF
• Winner Takes All?

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Introduction

• Founded in 1967, Monster is the leading global
  online careers and recruitment resource property.
• Company also owns TMP Worldwide and Yellow Pages.
• Provides services in N.America, Europe, and the
  Asia-Pacific region to more than 495,000 clients
  (Fortune 500 to small and medium size
  enterprises, educational institutions, government
  agencies).
• Over 46 million resumes on its database

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Online Brokers

• Business Model wasnt created out of a new idea.
• Offline business examples
• Real estate agencies.
• Insurance agencies.
• Stock brokers.
• Travel agents.
• Online brokers were born with the fast spread of
  the Internet usage.

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Online Brokers

• Value for clients is created by
• Reducing search costs (big online databases,
  24/7, up-to-date).
• Personalization (users preferences).
• The Internet makes communication between clients
  and trading partners easy.

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Online Brokers

• Revenues are collected by
• Commissions and other transaction-related fees
• Subscription fees
• Advertising
• System integration fees
• Cost categories
• Cost of revenues
• Product development costs
• Sales and marketing costs
• GA expense

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Online Brokers

• GBF strategy
• Network effects depend on buyer and seller
  heterogeneity and client exclusivity
• Many online brokers are subject to strong network
  effects
• Large portion of costs are fixed companies
  benefit from strong scale economies
• Sticky websites have high CRR

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Company Overview

• Industry overview
• Since the birth of the Internet, the online
  recruitment market has seen significant changes.
• It was influenced by the economic downturn of
  2001-2003.
• Many went bankrupt or merged with the major
  players
• Monster
• CareerBuilder
• Yahoo! Hotjobs

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Company Overview

• Industry overview
• Online recruitment is positioned to grow more
  quickly than other economic sectors.
• Online advertising will exceed 16B by 2008
  (mostly recruitment advertising).
• Mintel forecasts that recruitment advertising and
  membership revenues will reach 5.9B in 2009.

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Monster.com

• Formed in 1994 454th commercial website
  worldwide.
• As a leader it offers innovative technology and
  superior services.
• The Monster global network consists of 22 local
  content and language sites.
• Has over 25M job seekers members, a resume
  database with more than 17M unique resumes, over
  100,000 member companies, over 1M unique job
  opportunities with the network.

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Monster.com

• Marketing is divided into local and global
  marketing segments.
• In 2004, Monster launched its Go Local
  initiative to reach deeper into small and
  medium-sized business (heart of economy).
• Teamed up with Infinity Broadcasting to extend
  its local presence through 180 radio stations and
  their websites (70 million weekly listeners).
• Acquired Jobsahead (Monster India), 40 stake in
  ChinaHR.com, jobpilot and emailjob.com in Europe.

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Monster.com

• Revenues come from
• The placement of job postings on the sites within
  the Monster network
• Access to the Monster networks online resume
  database
• Other subsidiary services
• Designing and placing recruitment ads in
  traditional media (newspapers, trade
  publications).

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Stock
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Stockholders

• Principal stockholder CEO Andrew J. McKelvey
  (34)
• Direct private holders
• Institutional holders
• Employees

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Monster.com

• Growth
• The success of Monster depends on its brands and
  their value.
• By expanding the brand Monster attracts and
  expands the client base.
• Based on the growing number of other Internet
  sites and relatively low barriers to entry the
  market.
• Rapid evolution of the market requires continuous
  improvement in the performance, features and
  reliability of all Internet content by Monster.

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Competitors

• The market is highly competitive pressure to
  reduce prices, new capabilities and technologies,
  job completion schedules.
• Competition from number of sources
• Media companies
• Other employment-related sites
• Internet portals
• National and regional advertising agencies
• Marketing communication firms
• Two biggest rivals in the industry
• CareerBuilder
• Yahoo! HotJobs

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GBF Model

• Value Proposition
• Reducing costs (time, pleasure, not always
  money).
• Available 24/7.
• The amount of resumes and job postings.
• Technology (personalization).

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GBF Model

• Network Effects
• Strong.
• First-mover advantage (454th commercial website
  worldwide).
• Heavy spending on advertising and building its
  brand name.
• More employers more job seekers.

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GBF Model

• Economies of Scale
• A large portion of Monsters costs are fixed.
• The company is not completing transactions on any
  behalf of its consumers.
• Only creates the leads.
• It is easier to deal with a few big employers
  with large number of postings.

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GBF Model

• Customer Retention
• Medium.
• Higher because of the sites stickiness.
• Lower because job seekers tend to use several
  methods to look for a new job.

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Winner Takes All?

• Mergers and Acquisitions
• In 2003-2004, Monster completed 6 business
  combinations
• Howard Edwards (N.America)
• Quickhire (N.America)
• jobpilot GmbH (Europe)
• JobsAhead.com (Asia/Pacific)
• However, company also discontinued several
  business in Europe, US, Australia and New
  Zealand, etc.

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Questions???