Newspaper heavies Knight Ridder and Tribune
Company announced a newly
formed, jointly owned company would acquire both Careerbuilder and
CareerPath.com in an effort to muscle into the crowded e-recruiter
space.
Los Angeles-based CareerPath.com is
a privately-held firm cooked up in the mid-90s by a half dozen major
newspapers that include the likes of New York Times , San Jose Mercury-News, Chicago Tribune, Boston Globe,
Washington Post , and the Los Angeles Times.
Originally created as little more than a back-page collection of classified
ads put on the Web, CareerPath has managed to claw its way into the fourth
most accessed job search resource on the Internet.
CareerPath has built a respectable user base but is generally considered a
me-too player amongst better-heeled rivals. While the company may weigh in
as a fourth place contender with 1.7 million unique visitors in May, the
third spot is easily secured by JobsOnline.com with a portly 3.7
million monthly users. America Online’s AOL
WorkPlace Channel and TMP Worldwide’s Monster.com round out the top two spots
with 4.8 million and 3.9 million unique visitors, respectively.
CareerBuilder, the only
publicly-traded of the two acquirees, nearly doubled its market cap
following the news to 7-13/16, on nearly 50 times average trading volume.
Despite a whirlwind IPO debut, shares of the newcomer fell on hard times
shortly thereafter, and haven’t traded above its offering price for more
than a year.
Whereas CareerPath is largely viewed as a me-too e-cruiter, CareerBuilder
still wades in the kiddie pool with just 650,000 unique eyeballs for the
month of May. While the two companies will be sandwiched together under the
terms of the acquisition, the combined entity will still only rank as the
fourth most trafficked job search site on the Net.
Knight Ridder and Tribune will pay roughly $200 million in cash for
CareerBuilder, which is a 100% premium over last week’s close, or about
fair market value following the post acquisition announcement run-up. The
amount paid by the newspaper giants for the remaining stake in CareerPath,
that the two don’t already own, was kept under wraps.
So where does this land-grab measure on the Richter scale? I’d say little
more than a tremor. The buyout and subsequent combined entity hardly makes
a dent against the big three. But I will say, this pair of acquisitions
hold a decent value from a bargain hunter’s point of view.
Despite pockets of strength in some Internet stocks, this is one sector in
which rising tides won’t lift all ships. CareerBuilder’s future didn’t hold
much promise beyond a potential acquisition target, and the company needed
to be bought by a deep-pocketed sugar daddy to keep its boat afloat. After
years of spinning their wheels against flamboyant rivals who’ve made names
for themselves through flashy Super Bowl ads, perhaps CareerBuilder and
CareerPath will fare better as a tag team. Only time will tell.
Any questions or comments, love letters or hate mail? As always, feel
free to forward them to kblack@internet.com.
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