Facebook Inc. (Nasdaq: FB), which is expected to claim one-seventh of humanity -- a user base of 1 billion -- in its grasp next month, is trying to give professional networking site LinkedIn Inc. (NYSE: LNKD) a run for its money with a proposed entry into the job-recruiting market.
The $68.78 billion-cap social networking giant plans to launch a new job search application in early August, according to sources familiar with the matter. The job board will make want vacancy ads available for search to millions of Facebook users by aggregating the postings of third-party providers, according to a Wall Street Journal report released last Friday.
Facebook's proposed plan could pose a grave threat to LinkedIn if the job board proposal evolves into a full-scale endeavor, the sources said, requesting anonymity as the plan remains confidential.
Some analysts, however, predict that the on-the-pipeline job search application will not eat into LinkedIn's market share. Most people consider LinkedIn the primary forum for job searches and career networking opportunities, according to a new analyst note from J.P. Morgan.
"The way users use Facebook and LinkedIn is very different. That's going to be an obstacle for Facebook," said Ken Sena, a managing director in the equity research group at Evercore Partners. "If users are increasingly using LinkedIn for professional networking services, it makes more sense for recruiters to use the same platform too."
Many Facebook users are becoming increasingly displeased with what they call an intrusion into their privacy and an exploitation of their personal data. People who wish to segregate their personal and professional lives will remain loyal to LinkedIn. Others would balk at the idea of a new job posting appearing publicly on their news feeds when they might wish to keep their job hunt under wraps.
Other analysts repose their faith in the ability of secondary job aggregation sites to supplement job search originator sites like Monster.com or LinkedIn.
"They (Facebook) has a broad demographic. It makes sense for them to get paid for traffic by tapping into potential (third-party) aggregation sites," said Doug Arthur, also a managing director of equity research at Evercore Partners, and a social utility industry expert. Arthur added that Facebook's proposed job search application will not intimidate LinkedIn.
The new job board plan is not Facebook's first attempt at tapping into a global job recruitment industry that is estimated to be as big as $4.3 billion. Last October, Facebook reached out to the U.S. Labor Department, vying for a partnership providing job-hunting resources by developing systems where postings could be delivered virally through the site, free of cost.
A few months before its outreach to the Labor Department last year, Facebook attempted a partnership with global job search engine Monster.com to launch a professional networking application BeKnown - an endeavor that eventually lost steam once the initial traction died down.
A Facebook official, who asked not to be identified, said the new initiative is an extension of the partnership with the Labor Department -- an alliance that could help Facebook gain more traction at a time of persistently high unemployment.
But analysts expect specialized job boards, like those offered at LinkedIn, to be more attractive to recruiters who seek talented and high-quality job candidates. LinkedIn, valued at $10.44 billion, currently garners about 50 percent of its revenues from the job recruitment industry.
Facebook is still working on the details of the plan. That involves decisions about posting job ads on users' news feeds and monetizing the service in the future.
Reports of Facebook's job search agenda initially took a toll on LinkedIn shares, which plunged 5.40 percent to 102.98 in late-afternoon trading on Monday. However, they rallied 1.6 percent on Wednesday. Facebook shares marginally rose 1.39 percent to 32.17 on Monday before plunging 1.59 percent to close at 30.91 in late afternoon trading on Wednesday.
The job recruitment market has slowed down over the past month as an offshoot of reduced hiring amid fears of falling oil prices, ongoing turbulence in Europe and a global economic downturn.
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