Fairfax Media announces joint venture with British start-up Adzuna: Can the disrupted become the disrupter?

Fairfax Media may have missed the classifieds moving online to companies like SEEK, Carsales.com and REA, all of which today are more lucrative than the media empire, but the company doesn’t plan to make the same mistake twice.

Through a new joint venture announced today, Fairfax is pinning its hopes on a three-year-old British start-up which aims to upend the way people search for job ads online.

Adzuna was launched in 2011 by two former Gumtree executives. In an interview with TechCrunch, co-founder Andrew Hunter said the Fairfax joint venture came about without him and co-founder Doug Monro even having to travel to Australia.

“Yes, I guess we are just a little start-up in Clapham doing a joint venture with one of the biggest media companies in APAC [the Asia-Pacific],” he said.

“[We] were approached directly by Fairfax, who were looking to drive major change to the jobs market in Australia and had followed our growth and early success in Europe. So we started talking to Fairfax in early 2013 and after dozens of early morning conference calls, a mountain of paperwork and some fairly hefty legal fees, we inked the deal just before Christmas.”

Adzuna’s Australian chief operating officer, Nat Thomas, tells SmartCompany Fairfax’s MyCareer website and paper lift-out will continue. But the deal will give Adzuna massive exposure through Fairfax’s massive print and digital media properties.

“We’ll be able to take advantage of huge media presence that Fairfax has in this market,” he says.

For Adzuna, exposure is vital. One in four jobs in Australia is advertised through SEEK, which said in 2013 it had 24% of the Australian job-ad market.

Fairfax hopes Adzuna will help end SEEK’s dominance. Fairfax chief executive Greg Hywood told The Australian Financial Review the joint venture could see the “disrupted becoming the disrupter”.

SEEK capitalised on Fairfax’s lack of digital advertising in the early 2000s, taking many of its classified advertising and its associated lucrative income stream.

Adzuna had a soft Australian launch last May, and today has 89,000 job ads listed on its database – more than SEEK. However, direct comparisons are not entirely fair because Adzuna works rather differently.

Thomas describes it as “similar to Google”.

“The difference is that we only operate in the jobs category. We search the web to find all advertised job ads, and then collage them all together on the one website. If you’re a job seeker, you can come to the one destination rather than going to many separate sites.”

Unlike SEEK and other traditional online job boards, Adzuna does not make money for an insertion fee. However, businesses can pay for priority placement of their ads, for which they will then be billed per click from a qualified candidate.

Adzuna also offers social integration, allowing job seekers to see who they know on Facebook who works at a company they’re applying for, and also offers a data mining function showing what wages are typically associated with certain industries and positions.

The model looks promising, says Fusion Strategy media analyst Steve Allen.

“If you and I were designing a competitor offering to SEEK, these are the sorts of things we’d look at,” he tells SmartCompany. “It’s got things that’ll attract listers – the risk-free payment model – and it’s got things that’ll attract applications. And that’s a strategy.”

“It’s hard to see the dynamics of the market really changing unless SEEK has a major outage,” Allen adds.

“So what Fairfax have done is said, ‘what can we bring to the table that changes the game’… You have to imagine that they’ve gone with the best possible partner left in the marketplace – somebody that will hopefully bring a different feel and different software features to the party.”

Small business listings are the lifeblood of any job board.

Human resource consultant Margaret Harrison says most of her clients would rather use SEEK or Fairfax-owned MyCareer over a recruiter. Often they use both, she says, but Adzuna’s aggregation function may make this redundant.

“I think it’s very exciting,” she tells SmartCompany. “It’s exciting that people will have more choice. If you miss something on SEEK, you’ll pick it up on Adzuna.”

Recruiter Brendon Booth says he’d welcome any competition to SEEK.

“Any market player that did come into the market would be great for us recruiters,” he says. “SEEK sets the pricing in that market and we don’t really have a choice about it. Every year it provides the same things and their job packages markedly increase, sometimes by over 10%. It just boggles the mind of every recruiter I know.”

But he’s also cautious about whether Adzuna will crack the market.

“What I do know is that anyone who’s directly tried to take on SEEK – Monster, MyCareer, CareerOne, Jobs Jobs Jobs – they inevitably come up against SEEK’s market power. It’s really hard to shake something like that.

“Perhaps Adzuna might have a better shot of it, in the same way that LinkedIn has. LinkedIn didn’t attack SEEK directly, but came in with a different service offering. It built a job search listing on top of a social network essentially.”

SEEK itself is paying down Adzuna’s uniqueness.

“There have always been competitors in the marketplace and the aggregator model isn’t new to the Australian market,” the company told Fairfax.

“We’ve got the resources in place to build on our leadership position through better searching and matching, making SEEK the fastest and ­easiest way to find the most relevant job.”

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