Case Study of Monster Inc.
By Donatas Sumyla
Content
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Introduction
Online Brokers
Company Overview
Monster.com
GBF
Winner Takes All?
Introduction
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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;
Online Brokers
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Business Model wasn’t created out
of a new idea.
Offline business examples:
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Real estate agencies.
Insurance agencies.
Stock brokers.
Travel agents.
Online brokers were born with the
fast spread of the Internet usage.
Online Brokers
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Value for clients is created by:
Reducing search costs (big online
databases, 24/7, up-to-date).
 Personalization (user’s
preferences).
 The Internet makes
communication between clients
and trading partners easy.
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Online Brokers
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Revenues are collected by:
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Commissions and other transactionrelated fees
Subscription fees
Advertising
System integration fees
Cost categories:
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Cost of revenues
Product development costs
Sales and marketing costs
G&A expense
Online Brokers
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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
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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:
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Monster
CareerBuilder
Yahoo! Hotjobs
Company Overview
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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.
Monster.com
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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.
Monster.com
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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.
Monster.com
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Revenues come from:
The placement of job postings on
the sites within the Monster
network
 Access to the Monster network’s
online resume database
 Other subsidiary services
 Designing and placing recruitment
ads in traditional media
(newspapers, trade publications).
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Stock
Stockholders
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Principal stockholder – CEO
Andrew J. McKelvey (34%)
Direct private holders
Institutional holders
Employees
Monster.com
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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.
Competitors
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The market is highly competitive –
pressure to reduce prices, new capabilities
and technologies, job completion
schedules.
Competition from number of sources:
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Media companies
Other employment-related sites
Internet portals
National and regional advertising agencies
Marketing communication firms
Two biggest rivals in the industry:
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CareerBuilder
Yahoo! HotJobs
GBF Model
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Value Proposition
Reducing costs (time, pleasure,
not always money).
Available 24/7.
The amount of resumes and job
postings.
Technology (personalization).
GBF Model
Network Effects
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Strong.
First-mover advantage (454th
commercial website worldwide).
Heavy spending on advertising
and building its brand name.
More employers – more job
seekers.
GBF Model
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Economies of Scale
A large portion of Monster’s 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.
GBF Model
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Customer Retention
Medium.
Higher because of the site’s
“stickiness”.
Lower because job seekers tend
to use several methods to look
for a new job.
Winner Takes All?
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Mergers and Acquisitions
In 2003-2004, Monster completed 6
business combinations:
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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.
Questions???