Microsoft Takes CareerBuilder Stake

In a very interesting development, Microsoft has taken a 4% equity stake in number one jobs site CareerBuilder. Here’s the release. That means Tribune and Gannett own just over 40% and McClatchy, which recently joined the Yahoo! newspaper consortium has just under 15%. There are probably a number reasons for this:

• CareerBuilder wants a strategic alliance with a big Internet player (perhaps as a bulwark against Google and Yahoo!) and the related resources and capabilities (it built site search on FAST’s platform).
• This may also have been simply part of the package that CareerBuilder negotiated as a component of the extension of its relationship with MSN
• The newspaper owners want the money themselves, while they still retain control
• Microsoft may be seeing this as a way to vertically enhance search in a key vertical. It recently acquired health site MedStory as another example of a move toward verticalization

Even though CareerBuilder is the leading jobs site, Yahoo!’s newspaper consortium and the persistent Google threat mean that its position is far from stable. Brand equity can degrade quickly online in the face of competition.

Online recruitment revenues are estimated to be in excess of $5 billion vs. $4.7 billion for jobs classified advertising in print newspapers for the FY 2006 (per the NAA).

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Here’s PaidContent’s coverage.