Seek jobs on the line in China
ONLINE job ad company Seek has kicked off its global expansion with a $26.6 million investment in Chinese company Zhaopin, which it says is one of the country’s three leading recruitment websites.
Seek, which is backed by James Packer, will pick up a 25 per cent stake in the company. Andrew Bassat, joint chief executive of the company with his brother Paul, said he hoped it would be the “first of several” offshore acquisitions.
“We think that the internet employment space is a wonderful space and if you get it right, it is high margin, high profit and high growth,” Mr Bassat told the Herald.
“These things take time but we hope over the next year or so we’re able to announce a couple more [offshore acquisitions].”
Seek shares rose 11c, or more than 2 per cent, to close at $5.04 yesterday.
The company’s move into China comes amid speculation that its 25 per cent shareholder, Publishing and Broadcasting Ltd, is eyeing the online property ad market.
PBL has renamed one of its companies myhome.com.au and is rumoured to be partnering with the Raine family of Raine & Horne real estate.
It has also sounded out shareholders in online car ads business Carsales.com.au with a view to increasing its 41 per cent stake.
Some analysts believe PBL may look to amalgamate its online classifieds businesses at some stage.
But Mr Bassat said yesterday Seek was focused on jobs over the next year or two.
“Our focus is very much on employment and training in the short to medium term,” he said. Seek has a 55 per cent share of the Australian online employment ads market in terms of the volume of ads it carries, more than double the number two and three sites run by News Ltd and Fairfax.
Its revenue jumped more than 53 per cent to $109 million in the year to June 30, as it attracted more business in sectors such as government and health care and boosted its education and training division.
Net profit rose 68 per cent to $34 million, exceeding analysts’ expectations.
Mr Bassat said the company expected Zhaopin to become profitable in 2008.
He said over the next two years the company would “invest heavily”.
“Our model is to find a strong Chinese management team, give them capital and share some of our experience and expertise and support them.
“We are very much there to support them rather than control them.”
Zhaopin was founded in 1997. Its headquarters are in Beijing and it has branches in more than 30 cities in China.