Although Xing was one of the first Web 2.0 companies to go public in Europe, it has since struggled to establish significant footholds outside of its German-speaking heartland. But the company is still striving to develop its product, most recently by acquiring employer assessment platform kununu for €3.6 million – a figure that could rise by €5.8 million depending on future performance.
The Hamburg-based social network for business users took over kununu on January 1, although a sale contract was only signed by the relevant shareholders on Tuesday. It highlights a space of growing importance – the number of German businesses using social media for recruiting doubled in 2012.
Kununu was founded in 2007 in Vienna and attracts 3 million page views per month, making it the most popular platform for employer reviews in the DACH (Germany, Austria and Switzerland) region. The basic sale price is €3.6m with the rest based on kununu’s earnings and EBITDA performance in 2013 and 2014.
The platform functions like a job search or hotel review site. Current and former employees, trainees and interns can rate their companies in areas like working atmosphere, advancement opportunities and salary levels. This gives jobseekers a first hand insight into their potential future bosses.
Employers, meanwhile, can create paid-for official branding on kununu to optimise their attraction to talent.
Xing CEO Thomas Vollmoeller said: “Xing is already the German market leader in social recruiting. The purchase of kununu strengthens our position in this growth market considerably. Together, kununu and Xing offer users a unique insight into the inner workings of businesses. And with our help, firms can strengthen their position in the fight for talent.”
Martin Poreda, CEO of kununu, said the deal was a logical evolution of an existing two-year partnership: “Together we can do more, be faster and reach more customers. We want to herald a new era for the career sector and for job search, in which employer assessments are the new choice for employer brandings.”
The social recruiting space is of increasing importance. In 2012, 24 percent more employers – double the 2010 figure – were active on social media in looking for new staff, according to the ICR Social Media Recruiting Report 2012. Thomas Vollmoeller added: “This trend is considerably more advanced in the US. Studies like Jobvite show that more than 90 percent of companies in the US are using social media for their recruiting. But the German-speaking market is catching up.”
According to the blog post announcing the deal, kununu has been profitable and cash-flow positive since last year. Founders Mark and Martin Poreda, along with the rest of the 30-strong staff, will stay with the company.