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April 24, 2000
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Online Recruiters To Consolidate
Headhunter.net's acquisition of CareerMosaic.com will create the second-largest job site
By Chris Murphy
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nline recruiter Headhunter .net Inc. last week unveiled plans to acquire competi-tor CareerMosaic Inc. and create the second-largest online job site after Monster.com.Headhunter.net CEO and president Robert Montgomery says the two companies have little overlap among job-seekers and business customers. CareerMosaic's clientele includes some of the nation's largest companies, and it offers college and international recruiting; Headhunter.net has been more successful with recruiting for midsize companies and attracting candidates with two to 10 years of work experience.
The companies haven't decided on a pricing model or the brand name of the site created by the merger. Currently, CareerMosaic charges customers slightly more than Headhunter .net. "The key goal is to not lose any existing customers," Montgomery says.
The acquisition entails a stock swap, although the financial value of the deal wasn't disclosed. Headhunter.net will own 60% of the new company, and CareerMosaic's parent company, Omnicom Group Inc., will own the remainder. Headhunter.net executives hope to close the deal within four months, and the new site will go online this year.
Ron Wegmann, CEO of Vertical Solutions Inc., a 40-person software developer in Cincinnati, has used Headhunter .net to hire several people during the past year. The company--which has a listing on Headhunter .net seeking a software development director for a salary of $80,000 to $110,000--would welcome a larger pool of candidates, says Wegmann.
Although Headhunter .net has not indicated whether prices will increase, larger sites typically charge more. Wegmann says Vertical Solutions chose Headhunter.net over Monster.com partly because Monster.com was more expensive, even though it had far more applicants. He adds Headhunter.net also appeared to have a larger selection of IT candidates.
The merger isn't a sign that the online recruiting market is consolidating, says Jon Michael Morgan, an equity analyst for J.C. Bradford & Co. In fact, he expects the market to attract new companies and a growing number of professional recruiters. That will result in a more complex market that offers many niche recruitment providers and a wide range of services and pricing. Says Morgan, "There is going to be growth throughout this industry."
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