05/24 08:00 MICROSOFT <MSFT.O>
PLANS MSN JOBS SITE USING
CAREERBUILDER
CBDR.O>
By Denise Duclaux
NEW YORK, May 24 (Reuters) - Building on its recent $18 million
investment in newly public CareerBuilder Inc. <CBDR.O>, software giant
Microsoft Corp. <MSFT.O> Monday will unveil plans to add a job search area
to the grab-bag of media properties on its Microsoft Network (MSN).
"We haven't really gone after (online recruiting) in a major, major way,"
Michael Goff, director of programming for MSN, told Reuters. "What we have
heard is this is something users very much want...This is a real market."
Market research firm Forrester Research Inc. predicts online spending by
employers will grow to $1.7 billion in 2003 from $105 million in 1998.
Consultant Hunt-Scanlon Advisors expects the overall online recruiting
industry could swell to $5.1 billion in 2003 from $250 million in 1999.
Goff said Microsoft aims to add an online career section by late summer to
MSN, which touts nearly 28 million users each month.
The investment is part of a recent online spending spree by Microsoft, which
last week revealed a $250 million equity investment in online medical
information company WebMD as part of a plan to add a health channel to
MSN. In April, the Redmond, Wash.-based company announced plans to
buy online calendar service, Jump Networks Inc., to work with MSN.
Earlier this month, Microsoft paid $13 per share for 1.4 million shares of
CareerBuilder's common stock, or a roughly 6 percent stake in the company,
according to a recent U.S. securities filing by CareerBuilder.
Microsoft also has a warrant to buy another nearly 900,000 shares at $13
each, which could raise its stake in the firm to about 10 percent.
"We've taken an investment in (CareerBuilder), and I don't know that we
would if we didn't have some confidence in the company," Goff said,
confirming Microsoft's investment.
Once completed, the Microsoft online job channel will become a member of
the CareerBuilder Network, which includes CareerBuilder's flagship site,
CareerBuilder.com, as well as the online job areas of more than 20 media
companies.
The media companies, which include CNet, Business Week, USA Today and
NBC Interactive, outsource the job portion of their Internet sites to
CareerBuilder and split the revenue with the Reston, Va.-based company.
CareerBuilder subscribers, which have included such employers as drug
maker Bristol-Myers Squibb Co. <BMY.N> and security software maker
Network Associates Inc. <NETA.O>, can select which CareerBuilder sites to
advertise job openings. Ads range from $50 to $200, according to
CareerBuilder.
Microsoft and CareerBuilder declined comment on the financial terms of their
alliance beyond what was disclosed in a CareerBuilder regulatory filing on
May 11.
If Microsoft reaches agreed-upon Web traffic goals, according to the filing,
CareerBuilder will make revenue payments to Microsoft of up to $786,000 in
1999, up to $3 million in 2000 and up to $1.8 million in 2001.
"The employment recruiting market is a very big market," said CareerBuilder
President and Chief Executive Robert McGovern. "It's also very lucrative and
both parties stand to gain substantially from the arrangement."
Like many Internet start-ups, four year-old CareerBuilder said in its filing it
has had a string of quarterly losses and can make no promise as to when it
will become profitable, if at all. Nevertheless, General Electric Co. <GE.N>
and Automatic Data Processing Inc. <AUD.N> have joined Microsoft in
taking equity stakes.
CareerBuilder shares, which were offered May 12 at a price of $13, jumped to
a high of $20 on their first day of trade, but have since dropped to $12.38.
((New York Newsdesk (212) 859-1700, denise.duclaux@reuters.com))
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