Microsoft Buys Minority Stake in CareerBuilder

The partnership, worth up to $443 million over seven years, not only seals CareerBuilder’s exclusivity with Microsoft until 2013, but it also accelerates the job board’s global expansion plans.

Like the previous arrangement, the new agreement is performance-based, with payments driven by the amount of traffic MSN is able to deliver.

Financial details of the 4 percent equity deal were not disclosed, but it cuts the stake of the media companies owning CareerBuilder. Gannett Corp. and the Tribune Co. will now each own 40.8 percent of CareerBuilder, down from 42.5 percent, while McClatchy Co. will own 14.4 percent, down from 15 percent.

The price tag for the MSN exclusivity deal is hefty, but it may be worth it because it could produce some crucial strategic gains for the online job board. CareerBuilder’s base of monthly visitors grew by about 10 million unique visitors between 2003 and 2004—around the time when it joined forces with Microsoft. Today, CareerBuilder averages more than 21 million unique visitors per month.

Driving domestic traffic is not the only positive effect the exclusivity agreement may render. Castellini says CareerBuilder will also gain access to MSN’s established audiences overseas, facilitating its penetration into new markets. MSN attracts 465 million unique users per month worldwide, with localized versions in 42 markets and 21 languages.

CareerBuilder—along with rival job board Monster Worldwide—has aggressively pursued international opportunities to drive growth. The job board has launched career sites in the U.K., Canada and India. Most recently, the company purchased Jobbguiden in Sweden and JobbingMall in the Netherlands. Microsoft plans to integrate CareerBuilder into its MSN sites that primarily serve European countries by the middle of 2008.

Castellini says Europe is one of CareerBuilder’s first destinations in its global expansion plans. The company is also eyeing Asia. South Korea, Singapore and Japan are attractive business opportunities, given their high penetration of Internet use and developed labor force, Castellini explains.

He says the relationship between CareerBuilder and MSN will be a strategic one in which they share expertise in technology and market intelligence. The company will draw from MSN’s experience across the various markets where it has a presence in order to design a job board pertinent to the needs of local audiences.

“Every market has its own preferences,” Castellini says. “Our objective is to localize our offerings as much as possible.”

—Gina Ruiz