How Did It Double?
Take this job and post it! Job seekers -- and those looking to "better deal" their present gigs -- are flocking to popular online job sites like HotJobs.com. There's no doubt the Internet destinations are attracting a great deal of curious "Honest boss, I was only browsing" window shoppers, too.
Prospective employees are checking up on openings. Headhunters are finding resumes of job seekers willing to be guillotined. The niche's surge has been explosive. Sales at HotJobs.com grew 489% last year. Its largest competitor, TMP Worldwide's (Nasdaq: TMPW) Monster.com, is drawing close to ten million unique visits every month.
It's an ironic phenomenon. Here we are with the lowest unemployment rate since the 1960s, and Internet-based "Want Ads" are all the rage. Then again, maybe that isn't so ironic. With the job market so tight, companies have resorted to creative ways to recruit new workers. Even HotJobs.com is hiring -- with 27 new positions open as of last week.
Then again, I guess that's the point. The company that bills itself as the "hottest hand on the web" is growing faster than the unemployment lines are shrinking. Hands down.
Business Description
Hunting down a job is free at HotJobs.com. The New York-based company makes its money from more than 3200 recruiters who subscribe to the site's online employment exchange. It also sells banner ads on its pages.
HotJobs.com also stages job fairs throughout the country and provides recruiting software and consultation to worker-needy companies. There are four offices in the U.S. with a fifth in Australia.
Financial Facts
Income Statement
12-month sales: $20.7 million
12-month income: ($17.8 million)
12-month EPS: ($0.68)
Profit Margin: N/A
Market Cap: $781.1 million
Balance Sheet
Cash: $88.4 million
Total Assets: $152.5 million
Total Liabilities: $17.0 million
Long-term Debt: N/A
Ratios
Price-to-earnings: N/A
Price-to-sales: 37.7
How Could You Have Found This Double?
When HotJobs.com went public last summer, it did not have the upper "hand" in the market. The shares closed at just $7 5/8 on its first day of trading. But as the market warmed up to second tier Internet stocks, HotJobs.com got hot.
The company was already ambitious. Seven months before the company went public, it became one of only two Internet companies to advertise during the Super Bowl. The other company was Monster.com.
Was it peculiar, in a new economy so often dominated by traditional e-tailers, that two job sites were willing to pony up the big bucks for an event that would land more than a dozen dot-coms a year later?
Hardly. In an online segment as specialized as this, the race for mindshare is a never-ending sprint. That is why both companies were multi-million-dollar sponsors in the last two Super Bowls. Not that keeping up with the Joneses is any guarantee of ultimate success. Actually, the match game is over anyway. Last month, Monster.com became the first Internet-based sponsor of the Olympic games. It will be the official, therefore exclusive, career management sponsor for the 2002 and 2004 games.
HotJobs.com will naturally land on its feet -- or is it hand? The company's ambitious ad campaign, featuring the voice of Pulp Fiction star gone Jedi master Samuel L. Jackson, seems to be working. Traffic following the Super Bowl ad airing was three times greater than that following last year's production.
Since both Monster.com and HotJobs.com are well-funded, neither seems bound to bow out any time soon. For investors who figured that out last year, picking up HotJobs.com at $7 5/8 per share was, well, a snap.
Where to From Here?
After the Rams and Titans left the Super Bowl XXXIV field, fans went to HotJob.com's website. At its peak, the site was receiving a new resume every 2.4 seconds. That is the fuel that drives the prospects higher -- while sinking the hopes of any upstart competitor.
It's like eBay (Nasdaq: EBAY), which has been able to exploit its size advantages. Buyers and sellers, or hirers and hirees, flock to where the action is. The bigger get bigger in the process. That is why advertising is so crucial. While HotJobs.com rang up $8.6 million in revenues last quarter, it incurred $8.4 million in sales and marketing expenses.
Eventually the loud megaphone will bear dividends. Profitability is not expected until the end of next year. Along the way, the company has more revenue streams flowing than those generated from its hiring squad site.
The local job fairs provide a physical service that adds to the desired name recognition. Its Softshoe recruitment software has also been a hit, licensed by companies like pop star PepsiCo (NYSE: PEP) and online booking specialist Sabre Holdings (NYSE: TSG).
With 2.6 million page views on Super Bowl Sunday last month, it seemed as though Kurt Warner and the city of St. Louis weren't the only big winners that day. While the shares have fallen from their December highs, HotJobs.com is bound to recruit new believers on Wall Street. After all, isn't that what it does best?
Related Links:
Hotjobs.com Snapshot
Motley Fool Jobs Website
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