Seek is exiting Latin America

After several years of underperformance by its job boards in Brazil and Mexico, it is not a surprise that Seek is exiting Latin America. To be clear, there is not a Seek-labeled site in Latin America; rather, there are several job boards that Seek acquired over many years, including Catho in Brazil and OCC Mundial in Mexico. Why? (For a detailed examination of the exit, take a look at AIM Group’s recent write-up).

Seek has long followed a model of expansion through acquisition. In southeast Asia, it strengthened its market grip via JobStreet. It moved into China back in 2013 via Zhaopin, and acquired GradConnection to expand its leadership position in its native Australia. The company has also actively invested in other job boards and HR-related companies, including JobsDB in Hong Kong and of course, the properties mentioned above. Some investments are significant, and some, like a $20M investment in temporary and casual staffing platform Sidekicker, are relatively small (at least for Seek). It has appeared to be a moderately successful strategy for moving out of the Australian market, and into the global rectech world.

It’s a model that stands in contrast to one of its key competitors, Indeed. Indeed has moved – as Indeed – into market after market. It isn’t always the case that Indeed is number 1 in every market – but it often is a strong number two, as is the case in Brazil. So when Seek pulls out of a number two market for Indeed, it offers the company a chance to move to number one.

However, as AIM Group points out, Seek’s exit from Latin America is most likely to help Red Arbor solidify their hold in the Brazilian market. The company’s InfoJobs site is number one, Indeed is number two, and Catho is number three. The combination of traffic from InfoJobs and Catho will give Red Arbor an opportunity to keep Indeed in a number two position for the foreseeable future.

Seek spent $300 million to acquire these sites, but is selling them to Red Arbor for $85 million. Ouch. But…to their credit, Seek is doing what businesses often do with underperforming properties – getting rid of them. This reminds me – on a smaller scale – of what Dice tried to do in the 2000s. It acquired multiple discretely focused niche sites (thus creating DHI Holdings), in an attempt to expand from its primary focus on the tech sector. It didn’t work out. The only remnant of that effort still present is ClearanceJobs. It turns out that running multiple job boards in multiple niches and locations is a bit challenging. Seek certainly managed to do so for much longer that did DHI.

Are there other job board companies pursuing similar strategies? Sure – Stepstone out of Germany comes to mind. Will it face the same challenges as Seek? Undoubtedly. In the meantime, expect to see Seek consolidate its hold over Australia and southeast Asia. And watch Red Arbor get bigger.

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