By Charlene Li
Yahoo! announced today that its job service, HotJobs would be crawling company Web sites for job listings and adding those listings to its “index” of jobs. One the surface, this seems silly – why would they want to cannibalize the service’s main source of revenues, paid jobs?
I spoke with Dan Finnigan, who runs HotJobs, about their plans. He said that the #1 goal for HotJobs and Yahoo! is to provide a comprehensive job search experience. They were noticing that consumers were starting to conduct job-related searches on the general Yahoo! search pages, and advertisers were buying up job-related keywords. According to Dan, Yahoo!’s long term plan is to have another tab appear on search.yahoo.com for “Jobs”, in much the same way vertical search engines already exist for shopping and local searches. Job listings would also appear in general search results.
The twist is that HotJobs plans to put the paid listings first in the search results, and first in the integrated search listings. As anyone knows from general search results, it’s rare that people will venture beyond the first few pages of a search results. Here’s an example of a search for “RSS” in San Francisco – when I did this search, there were a total of 41 jobs, with 31 of them featured listings. Those ten “scrapped” listings came from just two companies – Juniper and Ask Jeeves – but I fully expect to see a more comprehensive list.
The “free” listings will benefit jobseekers who are looking for very specific jobs or jobs in locations that don’t have a lot of online recruitment listings (here’s another example). The secret to Yahoo’s revenue preservation is that if a company has problems filling a position, they will feel the need to pay for placement in the featured listings – as well as access to resume database.
So Yahoo! really doesn’t have much to lose in terms of revenues – and they also have a great deal to gain as they are third place player to Monster and CareerBuilder. Also, I think Yahoo! sees the writing on the wall with meta-job search engines like Indeed.com, Simply Hired, and WorkZoo that were scraping all of the major job search engines. And Google isn’t far behind – although they have made no announcements, I fully expect Google to unveil a comprehensive classifieds search engine within the next few months.
It's inevitable that job listing prices will feel pressure, yet Yahoo! has alternative ways to monetize job listings throughout its network.
Can Monster and CareerBuilder follow in Yahoo!'s footsteps? It's unlikely as they both lack the greater context of a general portal and search site -- they aren't in as good a position to make up any shortfall in revenues that will inevitably result.
The problem with Yahoo!’s approach is that it’s crawling company job sites and building a great index – but it simply means more jobs for candidates to apply to and get no reply.
Enter Jobster. I first spoke with Jobster in March and was impressed by their business model, which is combination of applicant tracking system and social networking. Recruiters can send out an email to their contacts notifying them about a job opening, and those contacts in turn can either apply for the job or forward it on to other people. The beauty of Jobster is that it turbo-charges one of the top ways people find jobs – referrals. One sure way to make sure that you get an interview is to have someone walk your resume (OK, it’s really done via email) to the hiring manager. While I don’t expect Jobster to beat the job boards in terms of quantity of jobs or number of job seekers, I do expect that candidate quality and the candidate experience will be extremely high.
Now it turns out that Jobster is buying WorkZoo, which it announced today as well. I spoke with Jobster CEO Jason Goldberg on Monday, and he described their vision of how WorkZoo will allow users to expand their search beyond their network of jobs on Jobster proper and see “every” job. WorkZoo has its cut out for them – in previous testing, they lagged significantly in their parsing ability compared to Indeed.com and Simply Hired. But this combination of Jobster and WorkZoo makes sense as a combined service – it’s also is similar to the partnership that currently exists between professional social networking service LinkedIn and Simple Hired.
I expect that Yahoo! will eventually loop its social networking service into HotJobs and enable a similar type of service to Jobster, especially since it also has an applicant tracking service for small and medium sized businesses. But one thing it should do is to be truly comprehensive and scrap jobs from its competitors, Monster, CareerBuilder, and other newspaper sites. Otherwise, they leave the door open for Google, Indeed.com, and Simply Hired.
Indeed.com and Simply Hired will have a hard time fighting off giants like Yahoo! and Google and are ripe acquisition targets. MSN will likely take a look at Indeed.com and Simply Hired, as will Google, but they are likely to pass and build their own crawlers as Yahoo! did that will integrate better into their core search algorithms. The most likely buyers for these sites include IAC/InterActive Corp, which also owns Ask Jeeves and social networking site ZeroDegrees, as well as newspapers chains who are not CareerBuilder affiliates (like MediaNews Group or Belo) who are struggling for relevance in the online recruitment space.
Monster may dust off some of the technology it has lying around from its Flipdog acquisition, but it's likely dated. CareerBuilder and its newspaper partners are still coming to terms with the cannibalization of print classifieds -- it will have a hard time understanding that even online recruitment revenue is coming under assualt.
The result: Look for the emergence of what I call "social classifieds", where the ability to connect people to each other will be the hallmark of success. In a world where listings are a commodity and easily crawled, the true differentiation will be the quality of the experience. It is for this reason that Jobster's model will ring true, and why Yahoo! 360 and MSN Spaces will be core to the success of their respective classified strategies. Google may have the best technology around, but it's Achilles’ heel will be its lack of a robust social network.
Humorous aside:
What I didn’t realize (thanks to my technology blackout) was that the Yahoo! Job Search service had already been quietly launched the previous week, and in fact, had been written about in Yahoo’s own search blog. So throughout Monday afternoon, I kept getting phone calls from reporters and industry colleagues who were sniffing around for some sort of “big breaking classifieds” news. I was told by Yahoo! that the news was embargoed until Tuesday morning, which I steadfastly insisted on honoring. It was only later after business hours that I embarrassingly discovered that everyone already knew about it and that Yahoo! was just formally announcing it. Lesson learned – read the RSS feeds asap after vacation!