Economy and Government and Economic Development and Technology

Want-ad battle brewing: Newspapers feel threatened by state's deal with Monster

February 13, 2006

A four-year, $2.8 million deal between the DWD and McLean, Va.-based Monster Government Solutions to develop and maintain an online job search and recruitment system is coming under heavy fire, with newspaper operators saying a system funded by their own tax dollars will harm their business.

DWD officials said the deal is designed to lower unemployment and boost Indiana's economy.

"We think this deal is going to result in a brain gain, keeping people employed and keeping our college graduates at home in Indiana," said Ron Stiver, Indiana DWD commissioner.

Officials from DWD and Monster hope to have the contract finalized and signed within 30 days, and launch the new sight this fall. But the Hoosier State Press Association is pulling its members together to oppose the deal.

Officials for The Indianapolis Star are spearheading efforts to either quash the contract or somehow get state newspapers linked to the system, industry sources said. Star officials declined comment.

By billing itself as the primary source for job applicants and businesses looking for workers, newspaper publishers said, the state's new Web site would pull business from their classified sections. Also, Monster's advanced search tools would allow the site's users to hone in on certain areas of the state, which would put it in direct competition with community newspapers that until now have had a corner on their local markets.

Newspaper operators said the lost revenue will not only cause layoffs in classifieds departments, but also take away significant funds from their news departments, causing layoffs there, too.

Though DWD officials said they have no desire to take business from local newspapers, industry experts said the state's desire to create a one-stop shop for job seekers and companies looking for talent would do just that.

DWD officials plan to market the site through their 26 unemployment offices throughout the state and by using Monster's considerable Internet presence and connecting to Monster's current advertising campaigns.

"Many employers prefer to post jobs on their own Web sites, in newspapers or in trade journals," Stiver said in a press release announcing the Monster deal. "We have a large pool of candidates looking for jobs, and it is imperative that we list as many jobs as we can on this Web site, while also providing efficient search tools. This will enhance the prospects of both job seekers and employers."

Newspaper officials think the state has gone too far.

"This is akin to the state contracting with Wal-Mart to give away free tires to everyone in the name of highway safety," said Jeff Owen, publisher of the Daily Journal in Johnson County. "We provide an affordable way for local job seekers and local companies to connect. This is part of our local economy. Why would the state want to intrude in it?"

"I don't want to say this was done behind closed doors, but it caught all of us by surprise," said Chuck Wells, advertising director for The Columbus Republic and president-elect of the Indiana Newspaper Advertising Executives Association. "The state is bringing in an outside firm as a partner to become a direct competitor with many state-owned and -operated businesses. This has a huge financial impact."

DWD officials said the deal with Monster followed a publicly advertised request for proposals.

Wells will likely seek an audience with his statehouse representatives, including Republican Robert Garton, who, as president pro tem of the Indiana Senate, has considerable influence with Gov. Mitch Daniels, also a Republican. Monster officials credit Daniels with spearheading this deal.

"This industry is competitive enough without having to compete against your own government using your tax dollars against you," said David Stamps, HSPA executive director. "This seems like a huge expansion of [the DWD's] mission. We have a lot of questions about this."

Adding to the concern of state newspaper operators is Monster's prowess in the jobrecruitment industry. Monster-with its Monster.comWeb site-is among the bestknown online job sites, rivaled only by Hotjobs.comand Career Builders.

"[State of Indiana officials] have certainly brought in a heavy hitter," said Jim Townsend, editorial director for Classified Intelligence LLC, a Florida-based research firm for the classified advertising industry. "Monster has considerable resources they can bring to bear in this market."

There is plenty at stake in what could become a highly public debate. Classified advertising constitutes up to 45 percent of a newspaper's advertising revenue and up to 35 percent of all Webrelated revenue. Job recruitment listings are as much as 70 percent of classified revenue, according to the Newspaper Association of America.

"The business model is changing for newspapers and many of them have invested significant sums, six- and seven-digit figures in some cases, to adjust," Townsend said. "This is a $17 billion industry we're talking about."

The Daily Journal, for instance, which already offers online job listings, has been developing an upgraded online system, including resume building and other components. The site is scheduled for a June launch.

The Monster site will replace the state's current online job search system, which was developed in the early 1990s by accounting firm Deloitte & Touche LLP.

Monster officials said the new system will be a quantum leap forward, allowing prospective employees to create and post resumes and allow existing Indiana companies and those considering locating here to obtain real-time employment data. DWD officials said contracting with Monster will be cheaper in the long run than operating the system themselves. The current system costs $500,000 annually to operate, DWD officials said.

DWD's system is used by about 158,000 individuals throughout the state. With help from Monster's marketing muscle, DWD officials hope to boost the number of users of the new system another 100,000.

"This is a combination of two visions to bring world-class technology to help the state help people find employment quickly and aiding Gov. Daniels' vision for economic development," said Phil Bond, Monster Government Solutions senior vice president and general manager. "We think by harnessing all the information needed by workers and employers in one place, we'll significantly increase the number of users of the system."

The system also gives Monster, long known for its global job search and employee recruitment reach, a unique entry into local markets. Access to state employment data, industry experts said, will strengthen Monster locally and nationally.

"This is a significant new and strategic direction for Monster to be going in," Bond said. "We saw a group of folks that needed work that were engaged through the state [system]. We wanted to get into that market and we found the best way to do that is through the state."

Monster entices job seekers and companies with free core services. Monster officials said there could eventually be a charge for job seekers and companies that want to use advanced services the site will offer.

Monster is planning to use its deal with Indiana DWD as a model for other states. If Monster can pull together agreements in numerous states, Townsend said, it could have access to unparalleled local, regional and national employment data that would make it an even bigger industry Goliath.

"Indiana is going to be the leader of the pack," Bond said. "Several other states have already contacted Indiana to see where they are going with this."
Source: XMLAr00100.xml
ADVERTISEMENT

Recent Articles by Anthony Schoettle

Comments powered by Disqus