Job Listings On Naukri.com Decline By 22.4% Since July; On Revenue Implications

Update: According to Naukri.com the number of job listings on the site cannot be correlated with revenues:

a. The Revenue model for Naukri.com is largely subscription based which varies from annual to quarterly periods. A large proportion of these are annual contracts. Therefore a reduction in the number of posting does not necessarily translate into a corresponding drop in revenues.

b. Individual listings are just a small component of the Revenues for Naukri. Our other products include Resdex – The database, Branding solutions etc which are not directly impacted by job listing activity.

Original Story: According to JobSpeak, a report released by Info Edge India, the number of new job listings on their portal Naukri.com have been on the decline since July 2008. 

JobSpeak claims to to highlight job industry trends, but since it draws its data only from listings on Naukri.com, we see it as an indicator of the performance of Naukri.com. Historically, the recruitment business (Naukri.com and Quadrangle) contributes to over 85% of Info Edges revenues, a significant majority of which is from Naukri.com. Therefore this study by the company takes on even more significance from an earnings perspective.

The Decline In Listings

While absolute numbers have not been shared, the index indicates that for every 1000 jobs per sector that were listed at Naukri.com in July, how many were listed in the subsequent months - hence, a percentage change, rather than absolutes. According to our calculations, the decline since September has been as follows:

Keep in mind that during the Diwali season, recruitment declines. We’re now in the final quarter of the 2008-09 fiscal, which has historically been the best quarter for the company.

Possible Impact On Revenue

It is key to remember that IT Services was among Naukri’s key sectors - contributing around 25.4% to its revenues, so even a 9.65% decline in listings is significant. Banking has contributed to 5% of revenues, so a 40% decline in listings will also have a significant impact on revenues from that segment. 

Traditionally, Naukri has depended on large IT clients - the top 10% of their client base (total - 18356 recruiters) contributes 62% of revenues (based on the Q209 Earnings Call), but since the beginning of 2008, they have been working on reducing their dependency on large clients. Info Edge had constituted at Small Accounts Team, looking to increase their client base and reduce dependency. We’ve also heard that they have been fairly aggressive with their sales in the past couple of months - introducing different packages to retain clients. Whether they have dropped rates - we don’t know, but will find out soon during the Q3 earnings call.

Download Jobspeak: Nov 2008, Oct 2008

Yahoo Picks Up 30% Stake In Local Info Company INMC

Yahoo has picked up appoximately 30% stake in Info Network Management Company, a Chennai headquartered phone directory search service. Yahoo will appoint one director to INMCs board. The amount invested has not been disclosed, nor has Yahoo mentioned whether it is a cash deal, or a stock deal. [Via release]

About 
According to their website, INMC was set up in 1998, and launched a portal Indiastudentinfo.com. The tele information business, Call Chennai, was established in 2005. The company is a part of the Unicard Group of Companies, which consists of Unicard Marketing, Unique Farms and Holidays, apart from INMC. 

Revenues and Targets
INMS claims to have generated revenues of Rs. 4 crores in 2007-08, and plans to achieve double that revenue by the end of the 2008-09 fiscal, and Rs. 24 crores by 2009-10. The company employs around 450-500 people, and plans to increase headcount to 2000 by the end of next year.

Operations
Call Ezee is present in 14 cities in India, and plans to expand its network to 26 cities by 2010. They claim to generate 10,000 calls per day, which appears to be very low - an average of 715 calls day per city, or just around 60 calls per hour per city if you assume a 12 hour call center.

More on synergy, business model and competition

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Carwale Raises $7 Million From Sierra; Isn’t Looking At Another Round

It’s been over 7 months since we first heard about Carwale.com raising $7 million from Sierra Ventures, and almost six months since CEO Mohit Dubey first publicly disclosed the funding at a Startup Saturday, though he didn’t mention the investors then.

The money appears to have taken a long time coming, and Carwale has now announced that they’ve raised upto $7 million from Sierra Ventures, in a Series A round of funding. So the money’s in the bank now. Remember that Carwale had reportedly sold 30% stake to SeedFund, an early stage investor, and it is worth noting that Sierra Ventures is one of the investors in SeedFund; Dubey told MediaNama that SeedFund had introduced them to Sierra Ventures.

Have promoters sold out majority stake?
Industry sources put Carwale’s valuation at around Rs. 48 crores, and suggested that they’ve sold around 25-30% stake to Sierra. Dubey declined to confirm the valuation and how much stake they’ve sold, but said that this has been a fresh issue of capital. He also declined to comment on whether the promoters still hold a majority stake in the company, and refused to disclose Seedfunds current holding in Carwale.

On revenues, targets and leads:

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SimplyHired Launches India Site

Online Job Search Engine SimpyHired launched its India site today, punctuated by the launch of sites for other countries like UK, Australai and Canada. The site claims to provide access to over 1.5 million jobs from job portals across these four countries. [via release]

This allows users to compare job openings across portals. Note that a few years ago, Info Edge had sent job aggregator Bixee.com a legal notice for indexing job listings from Naukri.com. Bixee was later bought by MIH India, and has since morphed into a vertical search engine. Other job search engines in India include TolMol Jobs, and Recruit.net. Web18 owned In.com also has classifieds search, but has surprisingly opted out of having a job search.

At present, SimplyHired aggregates jobs from a number of job sites - Monster, Naukri, Jobstreet, Naukrihub, Naukri2000, IndiaStudyChannel, 123oye.com, Vyoms.com, FirstSalary.com and CareerBuilder India. Some of these sites, I haven’t even heard of before. Simplyfired SimplyHired essentially lists relevant jobs by recency. I tried a 3 seaches, and scanned quite a few listings - conspicuous by their absense are BCCL owned Timesjobs.com and Consim Info’s ClickJobs.com. Are there no fresh job postings on TimesJobs or ClickJobs to speak of, or is SimplyHired not indexing their results?

The timing: perhaps this is an opportune time to launch a job search - we’ve been hearing about people being asked to leave, and at times, salaries delayed or not paid in full. Tough times for job seekers, and companies as well.

Q2-09 Call: Info Edge Plans Senior Mgt Job Portal; IT Contribution To Jobs Down To 25.4%

BSE listed Info Edge India (Naukri.com) is considering a senior management portal, the company disclosed during an analysts call on Friday. Details of the portal are not know - it’s just at a concept stage and they’ve not yet started work on it. Earlier this month, Info Edge had also announced another job portal targeting freshers, called FirstNaukri.

FirstNaukri will be sold to the same customer base through the same sales team for Naukri. Revenue will recruiters and campuses for branding and marketing their students to the corporates; students will not be charged. In the near term, there may be an softening in fresher recruitment, but Naukri is looking at it as a long term play.

On Competition And Market Scenario
According to Info Edge, the situation is dire for competitors - who are being hit harder. “We believe that one of our competitors may actually grow negatively, and marketshare will go up as a natural consequence. Client budgets are slashed in the following pecking order: Placement Consultants –> Print –> TimesJobs –> Monster –> Naukri

However, at 24 percent growth, Info Edge revenues grew less than previously indicated. The company feels that growth may decline even further in Q3 and Q4, though they refused to give a guidance, citing a volatile market scenario.

Pressure on Rates?
Client are asking not asking for lower prices, but they may downgrade to save on costs. The branding solutions will be hit first - downgrading from a panel to a homepage link, or take it for 3 months instead of a year. The company doesn’t see logins moving south, unless the number of recruiters in a company goes down. “The database is a bread and butter product for our clients. They’re probably going to drop competition logins first.” Info Edge is also planning to give bulk discounts, but not lower prices.

Decline In IT Hiring & The Small Accounts Team
The key concern has been the decline in IT hiring: from 29.7% in Q2 last year, to 27.16% last quarter, and 25.16% in Q2 this year. “IT is slowing down fastest, and it is an area of concern, and we expect the slowdown will last through this financial year.”

The company believes they’ll have to launch new products and look at sectors outside IT. Last quarter, the contribution from Infrastructure clients grew at 24%, though banking remained stagnant at 5% of revenues. What’s interesting is that the second rung accounts are growing faster in terms of revenue, and though larger clients have reduced spends, the company claims to have made it up by adding new customers, and more revenue from the smaller accounts team. There’s lots of churn at the bottom of the pyramid in terms of clients. To cut costs, Info Edge itself intends to go slow on hiring - at present, the sales team headcount is around the same compared to Q1. They spent around Rs. 13.7 crores across all businesses on advertising, and are also not cutting marketing expenditure.

Statistics related to specific verticals:
Naukri.com & Quadrangle

– Share of recruitment solutions - 86%
– Growth is slow, but margins have expanded.
– Naukri Revenue from recruiters grew at about 15%, while candidate services grew at 43%
– Main recruitment business grew by 19 percent, of this 15 percent growth was in databases and corporate business.
– 9% revenue is from candidate resume services
– Quadrangle grew at about 38%
– Share of IT: 25.4%, from 27.16 last quarter, 29.7% in the same quarter last year.
– Share of Banking: stagnant at 5% of revenues, same as last year
– Job posts on Naukri: 87,000 (steady above 80,000)
– Number of recruiters: 18600, up from 15400
– Top 10 percent of clients - upwards of 62 percent
– EBITDA margins in recruitment were up to 43% percfrom 41% a year ago
– Total resume database is at 15 million, adding 16500 resumes per day
– Resume updates: 37,000 per day
– Client base: 18600, up from 15400 last year.

Other verticals and Investments:

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Q2-09: Info Edge Records Net Profit of Rs. 15.67 crores; Revenues Increase By 24% To 72.31 Crores, As Indicated

(Updated)

Readers may remember that Info Edge (Naukri) had mentioned in the press a few weeks ago that revenues will not increase as per expectations - and in a way, offered a revised guidance of 20-25 percent. The second quarter results (Q2-09) are in, and not surprisingly, within the revised guidance. Revenues for Q2 have increased to Rs. 72.31 crores ($14,53 million) - a growth of by 24 percent year on year. Of this amount, Rs. 65.41 crores was the Sales Income.

Info Edge has reported a net profit of Rs. 15.67 crores, which is marginally up year-on-year from Rs. 15.14 crores, and not in line with revenue growth. According to Sanjeev Bikhchandani, MD of Info Edge, this is largely due to the Education business - the portal Shiksha.com - which has taken up significant investment. This is reflected in a  significant increase in employee costs as well, which have increased year-on-year to Rs. 25.41 crores, from 17.46 crores in Q2 last year, and Rs. 24.34 crores last quarter. According to Bikhchandani:

“We invested Rs. 8.6 crores at the EBITDA level in our new businesses (Jeevansathi, 99acres, Shiksha, Brijj and Allcheckdeals) in July-Sept 2008. This number was at Rs. 2.9 crores in the same period the last year. This represents an increase of Rs. 5.7 crores in investments in new businesses. If we had maintained investments in new businesses at the same level as last year then operating EBITDA in July–Sept this year would have been Rs. 21.4 crores as compared to Rs. 16.4 crores the previous year - a growth of 30%.”

The company spent Rs. 13.67 crores on advertising and promotion this quarter, up from Rs. 12.14 crores last quarter. In all, for the half year, Info Edge has spent Rs. 25.81 crores on advertising and promotions. During the second half of the year, last year, the company spent significantly more than the first: Given the current market situations, let’s see if that’s the case.

Ambarish Raghuvanshi, CFO of Info Edge has said that there has been a downturn in hiring levels, and the operating environment is “difficult”, adding that 99acres.com has grown appreciably - a revenue growth of 98.9 percent.

Info Edge has, so far, spent Rs. 6.98 crores in Acquisitions and Strategic alliances. This is up from Rs. 5.023 crores from the last financial year. Remember that the company had raised Rs. 30 crores from its IPO for acquisitions. So far, they’ve invested in Study Places Inc, Applect Learning Systems and eTechAces. Our coverage of the eTechAces investment here and here.

Jeevansathi has recorded a revenue growth of 40.3 percent. Percentages don’t matter unless we have a base figure for the revenues, so readers should take that into account. Info Edge has also reported an increase in other income by 18.95 percent - up at Rs. 6.89 crores, up from Rs. 5.79 crores.

Q2-09 Details: Financials

From Q1-09: Financials, Earnings Call | Analysis/Report

(Updates: added details from financials, inputs from Info Edge MD, corrected revised guidance)

Related:

– Info Edge Tries To Lower Expectations, With Q2 Results Nearing

Disclosure: I own an inconsequential number of shares of Info Edge

Shaadi & Bharatmatrimony Launch Phone Services

Matrimonial site Shaadi.com has announced the launch of Shaadi.com Sapphire, a phone based service with call center executives who guide callers with the matrimonial search process - whether creating a profile, searching for profiles, connecting or contacting. Members can choose daily updates over phone, or email for relevant matches. The service, available between 10am-7pm is priced at Rs. 14,950 for six months.

What’s interesting is the cross-media approach that Shaadi.com has been taking - apart from online, they’ve got services on DTH, Mobile, Offline (Shaadi Points), Phone (Sapphire). Some of these act significantly to costs - like offline services at Shaadi Points, and phone services like Sapphire, which others are tie-ups that (we assume) are revenue share deals - DTH and Mobile. Let’s see what’s next on the agenda.

Update: Arch rival BharatMatrimony has also launched their own phone based services - called BM Privilege. They positioning appears to be a little different from that of Shaadi - Murugavel Janakiraman, CEO & Founder of the Consim Group is quoted in the release emphasising on the fact that “People want privacy and they also want personalised service.” I guess that means the service will offer some amount of anonymity. Interesting. The pricing is on par, but the payment cycle is shorter than from Shaadi: BM Privilege package offers the service at Rs 8650 for 3 months, but that it is available only till the end of the month.

The matrimonial players can look at the following media for their services:

Job sites have been hosting job fairs across the country; I wonder when we’ll see Shaadi hold a Swayamwar. :P