Chennai: Is the job portal business becoming a media business in India? It seems yes. After the Times of India group, it is now the turn of Television Eighteen India Limited (TV18) to get into this space.
The television company has signed a Memorandum of Understanding (MOU) with the $14.8 million revenue JobStreet Corporation Berhad, Malaysia to acquire 50 per cent stakes in the latter's Indian subsidiary JobStreet.com India Pvt Ltd.
As a part of the deal TV18 would infuse $2 million into JobStreet India and also provide on going media support.
According to the TV18 Group, CEO, Haresh Chawla, the investment in JobStreet is to strengthen the group's presence in the consumer Internet space. "Over the last five years, TV18 has consistently invested in and built successful Internet franchises in India. The Group already owns India's most widely used online platforms - moneycontrol.com, commoditiescontrol.com, poweryourtrade.com and ibnlive.com. The Group has also recently seeded yatra.in in partnership with Norwest Venture Partners (NVP)."
Says JobStreet India's managing director N Muralidharan, "It is not that we are strapped for cash as our parent company has a market cap of $90 million. We saw an opportunity for us to partner with a media outfit and leverage their strength." According to him TV18's television channels has a varied viewership whereas their own audience belongs to the middle and senior management cadre in corporates. TV18 has television channels like CNBC, CNN-IBN, Awaaz and IBN 7 apart from several portals.
Continuing further, Muralidharan says that no formal enterprise valuation is done nor any timeframe has been set to convert the MOU into a proper share purchase agreement. However the media support given by the television channel will be taken into account as and when the valuation is made.
According to industry sources, what could have weighed in JobStreet India's favour is its software Impact that helps in streamlining the entire recruitment process. According to Muralidharan, around 35 Indian corporates are using this software, installed in the website of the client, as an application software provider (ASP).
Commenting upon the new development R Guhan, country manager, Jobsdb.com, a Chennai based job portal says, "The deal will not have a major impact on the existing players. But it will make life tough for new entrants and those who plan new operations in India." According to him there are around 30 job sites in India and more are coming.
In order to counter the media exposure of JobStreet and TimesJobs, the new players would have to increase their media spend. In addition the corporates would prefer portals like JobStreet and TimesJobs as they could host television shows and address their target segment directly. This in turn would fetch higher revenue for the portals and the channels in the form of advertisements and sponsorships.
In an interview to this publication, TimesJobs CEO Rajeev Gaur categorically stated, "This business is essentially a media business, and therefore it is best done by a media company. Reach is a constraint for most players in the business." (See: Job sites in overdrive).
His portal leverages The Times group's resources like the print, Internet, television, and the radio. Consequently, within just two years of its launch, Timesjobs has emerged as one of the leading jobs portal in the country.