SEEK’s seeking new pastures?

SEEK Limited revenue grew by 35%, registering a net profit of $89.5 million, a 62% increase from FY 2009. 

SEEK Employment’s (the job board business)  revenue grew by 1% from 170.9 in FY09 to  172.8 million in FY10, which is a small percentage, but it’s an impressive performance considering it is generated in the midst of the GFC. Revenue from SEEK Training grew significantly. SEEK Learning, in particular, performed very well with revenue increasing by 45%. Again the GFC has probably a hand in this, with many choosing to retrain and invest in education during the downturn. Overseas investment are also starting to pay dividends too.

Overall it’s an impressive performance, it’s almost as if SEEK can do no wrong.

So, what’s next for SEEK?

SEEK is banking its continued growth on the demise of print. Yes, all signs are advertising dollars will continue to migrate from print, but what’s left of the industry is proving to be quite resilient. In fact some sectors even preferred print to online. If print media, currently worth around $400 million, further bleeds its market share SEEK is unlikely to be the only beneficiary.

Besides competition from other job boards, social media and LinkedIn in particular is looming as a potential threat. If the view that job boards attract mainly active job seekers is strengthen further, then SEEK (and other job boards) will have a fight on their hands.

Networking sites will be less of a threat if the market decides that job boards have ‘reach’ beyond active job seekers. In this scenario, large resume databases will become critical. I believe SEEK’s working to revamp their resume database. The value of a resume database has less to do with technology (though important) but more to do with size. The best technology have little value if there are only a few resumes to search. With about 1 million plus Australian members, and the benefits of networking and referring built in the system, LinkedIn is in a good position.

In the near future, my call is job boards will have to go ‘social’ in some way or the other. Will SEEK go social? Time will tell, but it’s not too far-fetched to imagine that SEEK will adopt the Internet’s (perhaps a partnership with Facebook?) new found ability to connect and engage. SEEK has brand recognition and traffic, if any job board wanted to dabble with social media, they are the best equipped.

So the road ahead will have bumps. Which is not say SEEK Ltd is in dire straits. It has insulated itself from risk with an investment in education, a perennial recession proof sector. A stake in the international student market, the second largest export industry for Australia, will insulate the company further. Online recruitment is yet to mature in many Asian countries, so I’ll not be surprised if new acquisitions are made overseas.

SEEK have deep pockets. If anyone can find other income streams, it is well equipped to do so. What they do will have immense bearings for the job board model and the industry as a whole.