You bought what??? A guide to job board acquisitions and other curiosities

On Friday Dice Holdings announced the purchase of FINS.com, the financial job board that powers WSJ.com and Marketwatch.com. The acquisition got me thinking: why do job boards buy other job boards? Why do they sometimes decide not to buy, but instead create their own? And what, if anything, does the Dice purchase mean for the job board market at large?

First things first: Dice (my former employer in the dark recesses of the past) has not been shy about acquiring other sites. Mike Durney, company CFO, even gave a presentation at the Fall 2011 IAEWS conference about acquisitions – and in passing mentioned that Dice is always looking to buy…assuming the site meets their criteria. Those can include the site’s industry focus, cash flow, potential growth, and a number of other related items. What I found interesting about this particular transaction was the fact that Dice already has a financial careers site (eFinancialCareers). Granted, it is based in the U.K. and still relatively weak in North America, but it does well from a financial standpoint. So why would Dice feel the need to add a second financial site?

Distribution and the right partners.  Think about it – can you really find a better place to find financial professionals than the Wall Street Journal? I doubt it. This purchase puts Dice in the middle of two very valuable sites, all in one fell swoop – versus spending possibly years building site visibility and traffic for eFinancialCareers in the U.S. This is definitely a case of buying real estate with a building on it makes more sense that finding real estate and then building. The acquisition also puts Dice squarely inside a content site that seems to have done a very good job of integrating jobs and related material. (In fact, Dice has indicated they will utilize FINS content streams elsewhere).

What does Dow Jones get? Money, of course (no guess as to how much, alas!), but also freedom from running a job board inside a content-driven business. Dice has been effective at moving beyond job postings in terms of monetizing employers – so I suspect FINS will be offering a bevy of new employer products in the coming year.

The bigger lesson here: job boards make job board acquisitions for many reasons: cash flow, real estate, potential growth, technology, partners and a host of other factors. If you’re looking to sell, you need to have a clear idea of all aspects of your business that may be attractive. That doesn’t, of course, mean that you’ll anticipate why a given buyer is purchasing you. From my own experience, you often have no clue. All you can do is be aware of the many different reasons a company may want your site – and then be sure to explicate each and every one. On the surface, Dice purchasing yet another financial careers site doesn’t seem that smart – but looking at it from a distribution and partnership standpoint, it begins to appear more attractive.

Is this the last acquisition in the job board industry for a while? No way. To very loosely paraphrase John Sumser, there will be a continual stream of job board acquisitions and mergers in the next 24 months. The recession is ending, the labor market is tightening in many key areas, and employers are once again looking for reliable, cost effective ways to find quality candidates. In other words, they need job boards.

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