Can Monster Overcome LinkedIn's Threat Through 6sense?

By
A A A

Monster (NYSE:MWW) is an online job search portal that provides recruitment services to employers and job seekers. According to Monster, its recruitment service product Power Resume Search ( PRS ) based on the 6Sense Semantic search technology continues to gain traction with its clients. The company also plans to launch another product named Enterprise Suite based on this technology. We believe these products will help drive growth against niche players like careerbuilder.com and jobcentral.com though it will face emerging challenges from social networks like LinkedIn (NYSE:LNKD), Facebook and Craigslist.

We currently maintain a $14 price estimate for Monster stock , which is about 5% below the market price.

Competition mounting on Monster

We believe that social networks like LinkedIn provide a long-term threat to Monster. Recently, LinkedIn priced its IPO around $45 and its stock shot up to more than $100 during the first day of its shares trading. This shows that investors have huge faith in LinkedIn's business model. Recruitment solutions account for about 50% of our $30 price estimate for LinkedIn stock , which makes it the most valuable business for LinkedIn. Due to increased competition from LinkedIn and other niche players, it might be difficult for Monster to exert its pricing power on recruiters going forward.

Monster products gaining traction

6Sense technology is much more efficient than the traditional resume search technology, and helps recruiters to quickly find suitable candidates (See Better Resume Search Technology Can Help Monster Compete with LinkedIn, Facebook ). According to Monster, since the PRS launch in Q4 2009, it has sold an excess of $100 million of PRS products at an average premium price in excess of 30% above its other flagship products. Additionally, it has high hopes from its upcoming product launch of Enterprise Suite.

In its earnings call, management notes:

Our next product to be launched based on 6Sense technology is our Enterprise Suite. The suite of products and analytics is specifically designed to help clients manage a high volume of candidates regardless of the source of those candidates and to quickly identify the right candidate. The ongoing trials are going well, and the overall interest is high. We are on track to launch the product in the upcoming months.

Looking ahead

Monster's innovative resume search technology provides a catalyst for growth, which could improve it outlook. However it's ability to challenge LinkedIn and other niche players is still an open question. You can tweak the above interactive chart and see for yourself the impact on Monster's stock if Monster exerts pricing power on its clients through better products.

See our complete analysis for Monster stock



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: PRS

Trefis

Trefis

More from Trefis:

Related Videos

Stocks

Referenced

Most Active by Volume

42,244,673
  • $16.24 ▲ 0.19%
38,470,589
  • $99.35 ▲ 1.72%
23,931,367
  • $2.52 ▼ 21.50%
23,635,221
  • $27.81 ▼ 0.07%
23,084,127
  • $76.763 ▲ 1.07%
22,110,992
  • $93.95 ▲ 1.02%
21,646,929
  • $14.29 ▼ 4.29%
20,370,123
  • $22.85 ▼ 1.72%
As of 10/20/2014, 01:44 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com