Monster operates the online job search portal Monster.com which makes money from two sources:
(ii) job seekers purchasing premium services like resume/cover letter writing and priority listing of resume
However, job postings by employers have been on the decline over the past two years. Job postings generate an order of magnitude more revenue than job seekers purchasing premium resume services, which means that Monster is being negatively impacted by the current economic environment.
We estimate that in North America, Monster earns about $320 per job posting and that the number of job postings has declined significantly from about 1.9 million postings in 2007 to 1.1 million in 2009.
Furthermore, we expect job postings on Monster’s North American sites to continue to decline beyond the recession due to the impact of social networks. The company has been impacted by increasing usage of social networks like LinkedIn and Facebook for recruiting, the success of niche job sites such as TheLadders.com, BlueSteps and Dice, as well as free alternatives like Craigslist.
Do you think the revival in the economy will be sufficient to offset Monster’s losses to social networks?
A. 10% (+$1)
B. 20% (+$2)
C. 30% (+$3)
D. 40% (+$4)
Make a selection above and increase the forecast for Number of New Job Postings on Monster’s North American Sites to 1.9 million to see the answer.
