Internet-based job sites are bleeding as companies trim employee intake amid the global economic downturn, the portals' latest financial reports showed.

New Zealand-based Seek Corporate, the largest shareholder of zhaopin.com, the third biggest recruitment site by market share in China, said it lost 17.25 million Australian dollars between July 1 last year and June 30 this year, and Zhaopin.com itself is suffering at least a 150-million yuan loss.

New York-based Monster's second quarter report revealed its subsidiary Chinahr.com, the second largest Internet-based job site in China with a 22.4-percent market share, has still to break even. In 2008, Chinahr.com reported losses of 175 million yuan.

The CEOs of both websites left office after the reports were published. Liu Hao, CEO of Zhaopin.com, handed his position to former COO Zhao Peng at the end of August. Zhang Jianguo, CEO of Chinahr.com, left the company in January, with Edward Lo, executive vice-president of Monster Greater China, taking over the title temporarily.

"We are being affected by the weakening global economy significantly impacting hiring demand in almost all of the regions where we operate," Monster's annual report stated.

Bucking the trend was the biggest website recruiter in China, 51job.com with a 26.3 percent market share. It was listed on the NASDAQ in September 2004 and reported profit increases for seven consecutive years. It managed a 59.8 percent gross profit growth.

Chen Shousong, an analyst at Analysys International, which advises technology, media and telecom industries in China, said the losses suffered by Zhaopin and Chinahr were a result of not having a clear profit model and failure to control costs.

"Although most websites have tried to develop new services to gain revenue in the second quarter, they didn't pull in enough to offset the costs," said Chen. "51job.com has a strict cost control system which benefits the company a lot."

He said companies should avoid diversifying as a way of exploring new profit sources until their capital flow improves.

"Under such economic circumstances, capital is the most important thing. The most useful measure is to tighten cost controls and improve the return rate of capital usage," he added.

Zhen Ronghui, CEO of 51job.com, said it was not so much the global downturn as access to finance that was creating problems for recruitment sites.

"Internet recruiting is an industry that has been burning money," he said. "Before the economic slowdown, a lot of companies splashed cash by financing. But now the channels to raise money are not as smooth as they used to be," said Zhen.

According to data from Analysys International, the Chinese internet career market turned over 270 million yuan in the second quarter, a 10 percent decrease year on year, and a 1 percent increase compared with the first quarter.

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