Monster Revenue Falls as New Rival Launches

Monster.com parent company TMP Worldwide (Nasdaq: TMPW) said the job board saw revenue drop in the fourth quarter but continued to post profits and remains positioned for growth in a challenging business climate.

Monster recorded a profit of US$28.9 million in the last three months of 2001 on sales of $115 million. Fourth-quarter revenue was down compared with the fourth quarter of 2000, when Monster raked in $120 million.

Overall, TMP, which also operates interactive marketing and yellow pages services, recorded a profit of $27 million, or 24 cents per share, down from 31 cents per share a year ago.

Monster Challenge

Monster CEO Jeff Taylor said the job board has seen continued growth of its user base and that it continues to climb in the Web rankings.

But Monster faces a rapidly changing competitive environment. Just over a week ago, Yahoo! (Nasdaq: YHOO) closed its takeover of number two job board HotJobs.com, which TMP previously had tried to acquire.

Employers Unite

And on Tuesday, a group of high-profile employers, including IBM (NYSE: IBM), Intel (Nasdaq: INTC) and General Electric (NYSE: GE), launched a nonprofit job search site in conjunction with the E-Recruiting Association.

The site, DirectEmployers.com, will link job seekers directly to internal job postings at companies. Rather than paying a per-listing fee, employers will pay a yearly membership fee that will allow them to list unlimited jobs on the site.

DirectEmployers is being run by former Monster president Bill Warren. Warren also founded the Online Career Center, considered the first-ever Internet career site.

Warren, who became free to help form the startup after settling a non-compete lawsuit with Monster late last year, called the nonprofit site “a new type of Internet job search engine.”

Worried? Us?

But in TMP’s conference call, TMP president and chief operating officer Jim Treacy sounded a confident note. Saying he wanted to “address the hysteria surrounding our company,” Treacy said the parent company and Monster in particular remain on solid footing.

He pointed to the company’s cash reserves of $264 million as well as Monster’s overseas growth, and he cited relationships with AOL and MSN that give Monster wide reach online.

Treacy also noted that Monster’s annual sales grew from $400,000 in 1995 to $536 million in 2001.

He said that following its 2001 buying spree, TMP has ceased most acquisition activity for the immediate future, though it will continue to explore options in the online space.

According to TMP, its $115 million acquisition of European career site Jobline already is paying dividends, making Monster a “pan-European site” that may cross over into profitability early this year.

2002 Uncertainty

Citing continued economic uncertainty, TMP lowered its outlook for 2002, forecasting that total revenue will be down as much as 5 percent compared with last year. Much of that decrease will come in the company’s offline businesses, Treacy said.

But long-range trends continue to point in Monster’s and TMP’s favor, TMP CEO Andrew McKelvey said.

Not only will baby boomers continue to retire in record numbers, but when the economy does rebound, employees who felt they were not treated fairly during the downturn will ratchet up their job searches, McKelvey noted.

“There are some encouraging and stabilizing signs,” he said.

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