How Does Indeed Make Money + Everything Else You Need To Know

Brent Davis - January 11, 2021

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Indeed in one of the largest job listing platforms in the world.

Job seekers can upload their resume to the site for employers to browse.

Indeed also aggregates thousands of job listings and provides an efficient, simple search function.

Users can filter their job search by location, industry, and other factors.

The company has developed an excellent tool for employers and job seekers alike.

But how does Indeed make money? Keep reading for a deep dive into the Indeed business model.

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Indeed Logo

How Does Indeed Make Money?

Indeed uses a combination of advertisements and premium fees to generate its revenue.

For job seekers, all of Indeed’s features are completely free.

For employers, listing a job is free, but there are also paid premium features available.

These features improve the visibility of job listings and therefore increase the chance of finding a good candidate.

Let’s look at exactly how Indeed makes money using these strategies.

The Ad Serving Model

Indeed’s co-founders saw the enormous success Google was having with pay-per-click ad serving.

At the time, the concept of generating profit solely from website visits was relatively new.

With both a desktop and mobile website available, Indeed has a massive audience to leverage when selling advertising space.

Specifically, Indeed uses targeted advertisements on their mobile homepage, the job listing search results pages, and the page displayed after a user has applied for a job.

Because users often filter job listings by location or industry, Indeed can target ads efficiently.

Whether they are related to location or job search history, Indeed can assure advertisers that their ads are reaching an appropriate audience.

Indeed does not release the pay scale they use to determine advertisement pricing.

Premium Features

Employers can post job listings for free on Indeed.

Since Indeed is one of the most popular job search websites, employers want to make sure their listings are at the top of the search results.

Indeed allows employers to purchase sponsored job listings, which are featured prominently on the side or top of the results page.

These are priced using a pay per click model.

Every time an Indeed user clicks on a sponsored job listing, part of the fee is allocated to that click.

To market this service, Indeed allows sponsored listings to start at $5/day, though employers can spend unlimited funds at their discretion.

In addition to improving listing visibility, Indeed offers direct candidate data to employers.

Employers can browse the pool of over 150 million users’ resumes to seek out a potential candidate.

The subscription service includes unlimited resume searches, candidate communication features, and a set number of “credits” per month.

These credits are allocated when the employer receives a response from a candidate they’ve reached out to.

Indeed also includes automated email reminders sent to candidates an employer has yet to receive a response from.

This subscription service has two tiers, so it is suitable for small and large businesses.

The lower level, which currently costs $100/month, includes 30 contact credits.

This is aimed at small businesses or businesses with low turnover.

The upper level costs $250/month and includes 100 contact credits.

It also includes the ability to send a form letter to multiple candidates at one time, and access to Indeed’s “hiring insights”.

This multi-service model has proved very profitable for Indeed, as they cover a broad market under one recognizable brand.

Indeed headquarters in Austin

How Much Money Does Indeed Make?

Indeed became profitable very quickly after its launch, and raised only one round of venture funding in 2005.

The resulting $5 million carried Indeed through to its 2012 sale to Recruit Co.

for $1 billion. In 2018, Indeed’s reported revenue was over $2.75 billion.

Indeed was one of the first and most successful major online job search engines.

They’ve managed to saturate the market, and it’s unlikely that they will see any real challenges from competitors anytime soon.

History of Indeed

In 2004, Paul Forster and his friend Rony Kahan founded Indeed because they saw a niche in the job search industry.

Foster had noticed that his employer was unable to find appropriate potential employees because there was no job site specific to their industry.

Forster and Kahan set out to develop a site that would consolidate search results from millions of pages in one place.

Indeed sources job listings from company websites, other job boards, and recruitment agencies through aggregation.

The co-founders were inspired by the pay-per-click model they saw generating massive revenue for Google at that time.

By 2008, Indeed was America’s most visited job search website.

Its huge success led to steady revenue growth and market expansion.

Indeed is now available in 60 countries, and accounts for 16% of all global job listing website visits.

Each month, more than 330 million people visit Indeed.

Who Owns Indeed?

Indeed was sold in 2012 to a Japanese corporation, Recruit Co., for $1 billion.

At this time, Hisayuki Idekoba became the CEO. In 2019, Idekoba stepped down from the position.

The current CEO is Chris Hyams.

What Is Indeed Worth?

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Indeed is now an independent operating unit of Recruit Co. which releases financial reports by division.

The HR Technology division, which includes Indeed, experiences the highest growth of all Recruit Co. units.

In 2019, this division saw 49.4% year over year revenue increases.

Based on this and other existing data, Indeed would now be generating more than $3 billion of annual revenue.

How Can Indeed Make Money In The Future?

As the online job market becomes more competitive, Indeed will need to find more ways to make money.

Indeed has already introduced new revenue streams such as virtual hiring events.

To date, Indeed has hosted more than 3,000 of these events for companies such as IKEA and Nordstrom.

By continuing to release its platform in additional languages, and expanding these newer services, Indeed will likely experience sustainable revenue growth for quite some time.

How Does Indeed Make Money: Final Thoughts

Indeed was able to identify and occupy a new market in the early days of the modern online economy.

By providing a unique, reliable service and developing brand recognition, Indeed has become a hugely profitable company in several markets.

The company will likely continue to leverage its recognition and user base to make money for years to come.

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Brent Davis has been writing about the financial markets for 10 years and worked in research for the last five years at a Fortune 500 company. Brent's investing strategy is to buy high-quality companies and then let compounding do its thing.