How Significant Can The New Candidate Management Tool Be For Monster?

-0.24%
Downside
3.41
Market
3.40
Trefis
MWW: Monster Worldwide logo
MWW
Monster Worldwide

Can Monster’s (NASDAQ:MWW) new recruitment marketing platform turn around its business? In early September, the company launched a cloud-based candidate relationship management tool that allows recruiters to identify and reach desired candidates with specific messages and custom recruitment campaigns. Monster has been facing some serious problems with its business model and product offerings especially since the rise of LinkedIn as a recruitment platform. However, the company recently started improving its products and features, and the launch of its new cloud based recruitment platform is just another step in that direction. We believe that if the product finds some acceptance, it could generate as much as $50 million annually for Monster.

Our price estimate for Monster stands at $6.91, implying a premium of about 20%-25% to the market price.

Relevant Articles
  1. Monster Pushes For Shareholder Approval Of Randstad Deal As Q3 Results Slide
  2. What To Expect From Monster’s Q3 Results
  3. Monster Expecting 14% Top Line Decline In Q3; Randstad Deal On Track
  4. Decoding Monster’s $3.40 Acquisition Price: Is A Failed Turnaround Implied In The Price?
  5. Monster’s Revenue, EPS Misses Estimates Amidst Acquisition News
  6. What To Expect From Monster’s Q2 Results

See our complete analysis for Monster


Last Quarter Wasn’t Too Good For Monster

Monster hit a road bump in the second quarter of 2014 due to increased competitive pressure and weaker than expected business in Europe. While North America grew slightly year over year, revenues in Europe saw both sequential and year-over-year declines which were higher than we expected. The company stated that this was primarily due to downward pressure on pricing, resulting from growing competition in the recruitment industry. It also appears that Monster has been relatively slow in terms of adapting its products and services to the changing recruiting environment. The hiring industry is increasingly moving towards leveraging social profiles and platforms. Until Monster can harness this shift, its business will remain subdued. The company mentioned that it has been realigning its sales organization and increasing the headcount, and this will have a negative short-term impact on revenue growth. The logical conclusion is that Monster wants to focus its sales efforts on pushing new products, which may take a while to find acceptance among recruiters and job seekers.

How The New Product Can Help?

The price for Monster’s new product starts from $2,000 and is aimed towards recruiters. The company doesn’t reveal the number of recruiters that use its platform but we can look at LinkedIn’s customer base to understand the order of magnitude of revenue impact the new product can have. LinkedIn had over 24,000 corporate customers using its recruitment products at the end of 2013. If Monster can sell its product to a similar customer base, it can reign in annual revenues of close to $50 million. To put things in perspective, this represents more than 10% of its North American revenues in 2013. Monster, even though declining, has a well known brand and can potentially market its product to a large number of corporates and recruiters.

The company is also bringing in the social aspect as far as its job advertising is concerned. It stated that it ran beta test for Monster Twitter Cards in the second quarter and launched the product for the entire sales force in the U.S. in July. The next couple of quarters will reflect the impact of this new marketing strategy. Earlier this year, Monster acquired TalentBin and has successfully integrated it. It has started selling access to over 120 million aggregated candidate profiles. This compliments its latest candidate relationship management product which essentially uses a semantics based search process to identify and manage suitable candidates. With this product, recruiters can not only navigate and mine their own database, but also the aforementioned 120 million candidate profiles.

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research