Has Cheezhead lost his mind, selling to Jobing.com?

Yesterday, September 9, 2009, Jobing.com announced the acquisition of the Cheezhead Group, with infamous HR blogger, Joel Cheesman.

Why would a Aaron Matos, CEO of Jobing.com, want to buy a notoriously outspoken blogger?

While the answer might seem strange, but Search Engine Optimization (SEO) is probably the #1 reason.

Over the years, Jobing.com has been purchasing a lot of undervalued or distressed recruiting websites, including; Employocity, ColoradoJobs, JobSummit, the California Online Job Network, Rhinomite, Careers Colorado, LocalCareers Network, CanJobs.com, and WorkMetro.

Most of these properties were small and barely profitable websites, but they all had one thing in common, hundreds of very valuable job search related domain names.

OLD Jobing Strategy = Defense

In the past, Jobing’s purchasing of other websites and domain names seems to have been a defensive strategy. Buy the companies and domains, do some limited integration, but generally keep others from acquiring and competing on a local basis.

That strategy might finally be over.

New Strategy- Low cost Job Seeker and Employer Acquisition

Jobing now controls one of the largest collections of the most valuable job search related domain names. The value of these domain names has yet to be exploited to its full potential, from a Search Engine Optimization (SEO) standpoint.

Joel Chezman is one of the few people who could unlock the value in the thousands of domain names that Jobing.com now owns. Bringing Joel on board to integrate the SEO strategy is a great move.

Each month, there are over 150 million job related searches originated on Google.com. The majority of these searches lead job seekers to the largest job boards, who have made significant investments in search engine optimization (seo).

The top ranked career sites are using search to generate upwards of 50% of their job seeker traffic. Meanwhile, search is one of the lowest cost of job seeker and employer acquisition models.

SEO is a Zero Sum Game – Jobing stands to Win, and Big!

Search engine optimization is also a zero sum game, by integrating the domain into a search engine optimization network of job seeker eyeball-grabbing domains, Jobing could quickly pull millions of job seekers from competing national and local job boards. There are only 10 Top 10 positions, and the Top 1 ranked position can receive as much as 65% of the search traffic.

Currently, Jobing relies on one of the most expensive job seeker acquisition models, utilizing a lot of offline and outdoor advertising. Additionally, outdoor advertising attracts a blue collar labor workforce, while online advertising and marketing, including both SEO and SEM, attract a white collar workforce.

Bringing in a recruiting specific search engine optimization strategist to integrate and leverage thousands of highly valuable domain names makes a lot of sense. If this is Jobing’s strategy, which it seems to be, Jobing could expand nationally much quicker, with not only lowering its cost of marketing to job seekers and employers, but also doing this at the direct cost of its competitors.

In the end, I think this is a real win for Jobing and Cheesman.

What’s interesting is this, maybe Gannett and Tribune already discussed their ownership needs, (ie possibly cash), and they have already starting sucking the cash out of CareerBuilder. The rapid, and all of sudden, “boxes coming up the elevator”) speed of the layoff, makes me think it was definitely scripted to happen at the same time Tribune filed Chapter 11.

This action, on behalf of Tribune says to the ownership, debtors, and judges… “This is a solid cash business, we want to continue owning it, and not sell it, but we need to “restructure”. And with the restructuring plan we have already started implementing, we think we can take a little extra “profit” out of it, to help pay some of the other bills.

Most in the Internet Recruiting Market would agree that CareerBuilder has become THE leader in providing employers with job seeker candidates.

What’s really going on?

9/25 -Sales VP giving low performers notice.
10/10 – CareerBuilder CEO states headcount will drop.
12/4 – Mass Layoffs at CareerBuilder headquarters.
12/9 – Tribune Co. announces bankruptcy.

CareerBuilder ownership, as reported in May 2007, looks something like this:
Gannett    40.8%
Microsoft    4%
Tribune    40.8%
McClatchy Co.    14.4%

From my experience, here is one way it could play out.

In a chapter 11 bankruptcy, the management, creditors, and judge have to come together to figure out how to pay the bills.

Option 1- Tribune sells to Microsoft

From the management and ownership side, this is probably not a good option, but it might be one of the only options, depending on how bad the situation at Tribune Co is. CareerBuilder is one of the business units that is probably generating cash and its equity continues to grow. So selling now might now sound all that attractive. However, we are facing a massive hiring slowdown, which in turn is going to kill Q4, Q1, and probably Q2 and Q3 revenues. So is CareerBuilder at its valuation Peak?

A sale would be enticing, IF they could get a solid valuation Bankruptcy bad for Tribune Employees cash, which might come from Microsoft increasing their stake, or other major suitors coming in. There probably aren’t many others with cash on hand to invest, so I’m favoring a Microsoft deal.

Option 2 – Tribune, and other owners, start pulling cash from CareerBuilder.

This, of course would cause some serious long-term affects to the brand, because their market share would drop, which would devalue the property even further. Not only would this be bad for CareerBuilder, but it could become a real ugly mess internally. Because of the slowing economy slowdown, this too might be a really ugly choice, as cash is going to be drying up anyways.

What are other options?
What do you think CareerBuilder will look like in 24-36 months?
Will companies start focusing on their own Career Sites?
Will HR Search Engine Optimization take off?
Will employers start engaging their potential job seekers with social networking and marketing, and owning their own brands online?

If CareerBuilder does tank, this would probably be a major shot in the arm for Pay-Per-Click Recruiting? The clear winners will be the aggregators, like Indeed, SimplyHired, JuJu.com, TopUSAJobs, GO Jobs (our aggregator business), and others.

What are your thoughts? Comment below!!!