NEW YORK ( TheStreet - LinkedIn (LNKD - Get Report)has demonstrated that want ads pay. They used to be the cash cow of newspapers, good old classified ads. Then the Internet came along and stole all those help wanted advertisements. The issue, as always with Web sites, was how to monetize those job ads. LinkedIn has shown that they can successfully make money, and, as a result, has spawned a flood of other job offering Web sites.
Professional Diversity Network (IPDN)(PDN) is planning to go public this week and hoping to raise $20 million. The site has a narrow focus for its job applicants, namely minorities and women. It had an exclusive partnership with Monster Worldwide (MWW - Get Report), but that was terminated in December. PDN is now in a non-exclusive deal with LinkedIn.
Monster accounted for 72% of PDN's total revenue in 2011 and 63% for nine months ending in September 2012. Since LinkedIn will not be exclusive, PDN only expects half of those fixed payments that they received from Monster. It also can't predict how much money it will earn in commission sales from the LinkedIn relationship.
How many people actually find jobs online? A study from 2010 by Kroft & Pope noted no beneficial effects of searching online for jobs. Companies want to hire people they know, so they use referrals, opting to give bonus money to employees. According to a survey by Jobvite, 41% found their best job through family or friends. LinkedIn is more known for job seekers to use the network connections for job hunting as opposed to the actual job listing. Jobvite also discovered that 52% of job seekers use Facebook (FB - Get Report) to help find work.That hasn't stopped the number of job listing Web sites from exploding. Monster and LinkedIn have been mentioned, but there's also Career Builder and Taleo. Taleo was a private company, but Oracle (ORCL) bought it last year for $1.2 billion. For PDN, they face competition from other minority sites like Black Planetand MiGente. The big guys like Facebook, Google (GOOG - Get Report), Microsoft (MSFT)and Twitter are all jumping into the job hunting business.