Alma rolls, but on the edge of a monopoly
LinkedIn currently has 984,000 Czech users, mostly managers or senior specialists. Most of them are, however, passive candidates whom recruiters have to contact individually. Those most in demand, such as IT specialists, engineers and leading experts from various fields, have already started deleting their LinkedIn profiles because they do not want to be inundated with job offers every day. Facebook is breaking through in certain segments of the labour market in the Czech Republic but so far only to a limited extent.
If we do not take into account the activities of recruitment agencies, headhunters, independent recruiters and career pages of employers, most Czechs are still actively looking for jobs on traditional job boards. Jobs.cz and Prace.cz, operated by the LMC company, are the most used job portals. LMC was founded in the mid-1990s by Libor Malý. The charm of its de facto monopoly position was very accurately assessed by the Finnish media group Alma Media which bought LMC in 2012 for about CZK 900 million.
Further acquisitions by Alma Media followed, focusing on larger job boards on the labour market in the region. Since 2014, LMC has formed a joint venture called Alma Career Oy together with, for example, the purchased Profesia.cz job portal or the subsidiary of Monster in the Czech Republic, Poland and Hungary. Leaving aside Volnamista.cz, a job portal operated by the Seznam.cz company offering job advertising for free, the only major alternative for advertisers is represented by Jobdnes.cz, a job portal which is part of the Mafra publishing house. Other players may be beneficial for addressing certain groups of job candidates but they are not able to keep up in terms of traffic and their sales make up only a tiny percentage of the overall market.
It seems that antitrust regulators are closing their eyes over the status of LMC. While the Czech Office for the Protection of Competition was assessing the recent transition of the portals Mall.cz and Heureka.cz under the ownership of the investment group Rockaway Capital for a long time, the de facto monopoly of LMC (Alma Media) on the online job market has not yet been questioned.
The figures show clear dominance of LMC
In recent years, many Czech web projects partly or fully based on social networking emerged on the online job market such as Airjobs.cz, Chcipraci.cz, Jobote.cz (bought by LMC in early 2016), Cocuma.cz, Proudly.cz etc. Their results, however, still fall far behind the LMC portals. The same is true for larger, longer-established job boards such as the network of regional job portals Cesky-trh-prace.cz the annual turnover of which is around CZK 3 million. Compared with the more than CZK 600 million annual turnover of LMC, it is a significant disparity.
A separate issue is projects funded by the European funds, such as Vzdelavaniaprace.cz that only create less valuable duplicities to existing functional commercial job portals. Their lifespan is limited to the time for which they are financed from the pockets of European taxpayers without the slightest chance of their achieving commercial success.
With the exception of a few projects trying to bring major changes to the labour market, such as Cocuma.cz or Proudly.cz, the efforts of other players to grab a part of the market controlled by LMC seems naive. Such players only rank alongside those who have already failed in the same effort such as Sprace.cz, CVonline.cz, Jobpilot.cz (later Monster), Spravnykrok.cz, the original project of Volnamista.cz, prace.centrum.cz and others. If they have a deeper knowledge of the rules of the Internet, where the winner takes all in the particular segment, new projects would do better if they ended and saved their owners and investors additional amounts spent on fighting with windmills.
With only a minor downturn during the economic crisis, LMC keeps on reaching increasingly higher revenues and profits. At this rate, Alma Media can recover their entire investment within 10 years since the acquisition of LMC from the company's profits alone. Even if some advertisers complain about the increasingly higher prices and low quality of some services provided by LMC, there is no better alternative at the moment and most probably will not be for a long time in the future. LinkedIn, which plays only a minor role in job advertising on the Czech Internet, cannot help here either. Thanks to the acquisition of LMC, Alma gained a money machine managed in a high-quality way, at least since 2012 when Milan Jasný became its Managing Director. Jasný has been with the company almost from its foundation and succeeded during the last few years to significantly increase its profits. Credit where credit is due.
Selected financial indicators of the LMC company 2005-2015
| 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |
| Turnover (In thousands of CZK) | 612,217 | 501,734 | 446,121 | 433,729 | 436,750 | 336,991 | 363,251 | 497,619 | 366,815 | 245,992 | 168,004 |
| Profit before tax (In thousands of CZK) | 183,137 | 119,222 | 91,742 | 75,287 | 86,489 | 30,228 | 33,817 | 82,193 | 19,959 | 41,300 | 36,977 |
Source: Justice.cz - LMC Annual Reports 2005-2015
It is also interesting to compare website traffic of Jobs.cz with other players on the online Czech labour market. We will focus on this in the next article. You will also learn more about the ownership structure of the largest Czech job portals or how much it costs to advertise on them.