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Seek Does A Job On Classifieds Rivals
by Miriam Steffens, The Age

AUSTRALIA's biggest internet job site, seek.com.au, posted a 70 per cent jump in second-half profit as more employers advertised on its website.

Net income rose to $19.5 million in the six months ended June 30, up from $11.5 million a year earlier. The second-half figure was calculated by deducting first-half profit from the full-year profit, the Melbourne-based company reported.

Analysts expected profit of $18.7 million, according to the average of six forecasts in a Thomson Financial survey.

"This result, we believe, positions us well for the 2007 financial year," said Andrew Bassat, one of the company's two chief executives, in a statement to the stock exchange.

"The employment market remains strong and the ongoing migration of employment advertising from print to online will continue to drive our growth for several more years."

Shares of Seek have gained 57 per cent this year as investors bet that advertisers will shift their spending from newspapers to the internet. Sales of online classifieds in Australia increased 40 per cent to $129 million in the first half of this year, UBS said.

"Recent industry data and meetings suggest no slowdown in online advertising, with 2006 expected to grow about 60 per cent," Brett Hucker, an analyst at Merrill Lynch, wrote in a note to clients last week.

Seek, which garners about 60 per cent of the nation's internet job ads, has taken revenue from newspapers including The Australian and The Sydney Morning Herald, whose classified volumes dropped about 16 per cent from 2000 to last year.

Seek's sales increased 54 per cent to $58.9 million in the half, more than the 40 per cent growth in internet classifieds, indicating it's also taking market share from rival websites such as John Fairfax Holdings' mycareer. com.au and News Corp's careerone.com.au.

Jack Matthews, who runs Fairfax's internet unit, last month declined to comment on reports that Fairfax and News Corp had discussed combining their online job sites to gain more leverage against Seek.

Fairfax has started to fight back in New Zealand, this month adding job ads to its auction site trademe.co.nz. Seek gets about 11 per cent of sales in New Zealand.

Seek's full-year net income rose 67 per cent to $34.2 million on sales of $106.2 million. That exceeded a $26.3 million forecast the company made in documents detailing its sharemarket listing in April.

Seek, which is 25 per cent owned by James Packer's Publishing and Broadcasting Ltd, has started taking aim at niche markets that it hasn't penetrated — such as government jobs, health care and executive positions — to boost growth. It's also expanding in online education.

The company this month agreed to buy 50 per cent of IDP Education, the biggest recruiter of international students to Australia, to become commercial partner of 38 Australian universities that owned the company.

Seek will pay a final dividend of 4.8¢ a share, taking its payout for the year to 8.5¢ a share.

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