BEIJING -- In a move that could crank up the heat on 51Job ( JOBS), its rival Zhaopin has won an investment from the leading Australian online recruiting firm.

On Wednesday, Melbourne-based Seek said it will pay $20 million for a 25% stake in unlisted Zhaopin, while also offering "strategic input and operational support," according to a written release. The acquisition is still subject to Zhaopin shareholder approval.

A re-energized Zhaopin will make it harder for top-ranked 51Job to consolidate its hold on China's online job market, according to Kit Low, a Hong Kong-based analyst at Goldman Sachs. "We expect Zhaopin to become more aggressive online, together with second ranked ChinaHR, and this could put more pressure on 51Job's online-business market share," writes Low.

Initially at least, 51Job shares were little affected by the news, closing down 1.7% to $14.11 in New York on Wednesday. The next day the stock was in positive territory again, finishing at $14.50.

51Job has a 20% share in China, compared to 15% for and about 9% for Zhaopin, according to Shanghai-based iResearch.

"We thought Zhaopin was a great player and had a strong management team. What they lacked really was access to capital," Andrew Bassat, co-CEO of Seek, said in an interview. "Because the China market is relatively early stage and high growth, that opens up opportunities that don't exist in a more mature market."

China's online jobs market is expected to surge in value from $100 million in 2005 to over $500 million by 2011, according to Seek.

Morgan Stanley estimates that fewer than 5% of the registered companies in China conducted online recruiting last year, compared to around three quarters of U.S. firms.

The investment bank also recently forecast that the online recruiting market in China could see compound annual revenue growth of more than 50% over the next three years -- much higher than the 20% growth rate expected for mobile value-added services, an area that has received far more attention from investors.

Bassat declined to comment on the size of Zhaopin's annual revenue, other than to say that it's "growing nicely."

But a Goldman Sachs report estimates Zhaopin's 2006 sales at about $8 million. That implies Seek will pay about 10 times revenue for Zhaopin, the bank says.

The injection of cash is likely to postpone Zhaopin's rumored Nasdaq listing. Bassat says the purchase will give Zhaopin more financial breathing room, allowing the Chinese firm to "take the opportunity to invest and not worry so much about this month's profitability."

A Nasdaq listing is likely to "happen eventually but it won't be taking place in the short term," Bassat added.

Bassat expects Zhaopin may continue to lose money for another year or so as it invests more aggressively in its business.

With the additional funds, Zhaopin "can probably recruit more talent, and likely they are going to spend more on branding," said Richard Ji, a Hong Kong-based analyst for Morgan Stanley. Both factors are bound to give Zhaopin's business a lift, though Ji said he doesn't expect the deal to "dramatically change the competitive dynamic in the space."

The two players, 51Job and ChinaHR, already claim the benefits of foreign backing themselves, Ji pointed out. This could help them better withstand renewed pressure from Zhaopin.

In April, privately held Japanese HR services firm Recruit paid $110 million to acquire 15% of 51Job's shares in a private transaction, with the option to increase its stake to 40% over the next three years.

In February 2005, U.S.-based ( MNST) spent $50 million for a 40% stake in China HR.

While it remains to be seen whether Zhaopin's new backing will help it gain share, the spate of foreign investments over the past 18 months highlight the appeal of China's online jobs market.