August 4, 2003 12:38 PM PDT
Multimillion-dollar deal for AOL, job site
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Under the deal, CareerBuilder will pay AOL cash to be its exclusive online job-search service beginning in mid-December. If AOL meets CareerBuilder's quota for traffic directed to its service, the deal will be worth around $115 million over its four-year term.
CareerBuilder will embed listings throughout AOL's proprietary service and its network of Internet businesses, including CompuServe and Netscape. The agreement also extends to AOL's corporate cousins Time Inc. and CNN.com, both of which will also host CareerBuilder's listings throughout their Web properties.
As a result of signing on CareerBuilder, AOL will no longer use its previous partner, Monster.com. Monster and AOL signed a four-year agreement in 1999 valued at $100 million.
The CareerBuilder deal harkens back to the dot-com boom years of the late 1990s, when AOL would give companies exclusive rights to offer their services to AOL members. In exchange for exclusivity, AOL would lock in these companies, mostly Web start-ups flush with venture capital funding, with multiyear, multimillion-dollar contracts.
However, when the bubble burst, many of these companies were unable to complete payments, which eventually caused AOL's online advertising business to crash. The unit in July reported that advertising and commerce revenues declined 48 percent from the same period last year. AOL expects advertising to decline 35 percent to 45 percent in 2003.
AOL is currently under investigation by the Securities and Exchange Commission and the Department of Justice over its accounting of online-advertising revenue.
The deal gives CareerBuilder a major online distribution point for its online job search listings. The company is jointly owned by newspaper conglomerates Gannett, Tribune Company and Knight Ridder, spanning 130 papers across the United States.
Job listings have been a major source of income for newspapers. However, newspapers have begun facing stiff competition from online job listing sites, especially Monster and Yahoo's HotJobs.com.
