Monster-Adicio Tie: Implications for Yahoo! Net?

A new compact between Monster and Adicio, a classified vendor that previously insisted on newspapers’ “independence” from Internet verticals, seems likely to evolve the world of classifieds even faster.

The deal was unexpected  Monster has recently grabbed the key accounts for Freedom Interactive (The Orange County Register) and The New York Times Co. (The NY Times, The Boston Globe, New York Times Regional Group) from Adicio. Monster now has 55 papers.

But under terms of the new deal, Adicio wins the contract to provide tech and service solutions to Monster’s media clients (including non-Adicio clients) For instance, it can provide data conversion, increasingly popular click-to-print capabilities and other services. Adicio also gets to bundle in the value of Monster's national network (US$425 per ad) with its own national network of 250 sites (US$200 per ad) as a “value add” to any advertiser.

The deal also calls for Monster to recommend Adicio's non-recruitment solutions for Real Estate and Autos to other companies that come into the fold. Overall, the concept is that there will be one simple administrative back end for newspapers, a highly sought-after capability.

Presumably, if Monster can grow the recruitment business, and Adicio participates, even on a lower percentage basis, it is a win-win. And from Monster's point of view, of course, it now can take and sell ads to-and-from Adicio's still considerable newspaper base.

Newspapers can “have their cake and eat it too,” says Adicio’s Tony Lee. He says the biggest reasons they wanted to drop Adicio was they wanted to participate on a major national network like Monster and freely use its tools and content. But they also wanted to keep their independence. Now they can.

Lee concedes that the deal, by itself, won’t necessarily take Adicio’s recruitment business to new heights. It seems likely (to me, at least), that the company will only get a portion of its former revenues from clients that were previously set to leave it altogether. But Lee argues that newspaper recruitment contracts in the U.S., at least, represent the smallest growth potential of Adicio's now diversified businesses. Niche sites such as associations, verticals, and overseas are where the new action is for the company. The key here is that Adicio can keep the relationships alive.

A question I would pose, however, is whether this deal makes it more likely that Yahoo! will follow Monster's suit, and scrap requirements that newspapers form “exclusive” relationships with it. Yahoo!'s current deal with its 200+ member consortium is it must take the whole enchilada.

What should a paper like The San Diego Union Tribune do? It posts its ads on Yahoo! Hot Jobs, but Adicio provides the back end. Theoretically, it can now post ads on Monster as well. Will Yahoo! shift to keep its part of the action?

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