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According to World Advertising Research Council figures, the UK online recruitment market is worth about £100 million a year and revenues continue to grow at a very healthy 40 to 50 per cent a year. Recruitment web sites, often referred to as job boards, are outperforming traditional print media in terms of percentage revenue growth.

This has triggered consolidation within the sector. In September 2004, AIM-listed recruitment specialist hotgroup added to its portfolio of job boards by paying Guardian Media Group £6m for Workthing. Earlier in the year, newspaper giant Daily Mail & General Trust (DMGT) forked out £35m to buy another big brand, Jobsite.

A recent YouGov online survey, conducted on behalf of hotgroup, offers further encouragement for the sector by concluding that job-seeking is now a more popular online activity than arranging travel or entertainment.

It is second only to shopping. This research, based on a sample of more than 2,000 job seekers aged 27 to 45, also indicated that the web is the most useful resource when looking for work. It topped the poll (31 per cent), ahead of networking (29 per cent), newspapers (14 per cent) and recruitment agencies (12 per cent).

"The UK's large job boards - us, Monster, Fish4 and Jobsite - we've all had a good year," says Keith Robinson, commercial director of totaljobs.com.

"Probably, everyone's seeing 20 to 40 per cent growth. It has been a very good year for the sector, and I think next year and the year after will be even better."

There is definitely a distinct sense of optimism among the major players in the space. The feeling is that job boards will benefit from a general recovery in the recruitment market as a whole and succeed in clawing away a greater share of ad spend from traditional print media. Harvey Sinclair, managing director of hotgroup's online business, hotonline.com, thinks revenues could snowball fivefold to £500m per annum over the next few years as job seekers make online their channel of choice and employers come to recognise the fact.

Sinclair concedes that the Workthing brand has "lost its way a little bit" recently. And hotgroup aims to build it back up over the coming months, focusing predominantly on the corporate market, rather than on employment agencies. Until now the company has specialised in niche recruitment sites. hotgroup's latest acquisition takes its total number of job boards up to 16, although two smaller web sites are in the process of being subsumed into the larger Planet Recruit brand. "We recognised 18 months ago that the market was ready for consolidation," says Sinclair. "We recognise a strategic benefit in having niche sites, rather than one catch-all, general site."

Despite pursuing a niche approach, Sinclair argues that his group boasts the largest pool of labour online and has 1.4 million users a month. Centralised candidate and job databases mean that, despite operating under different brand names, the web sites are all interlinked. Going forward, he adds, hotgroup is exploring further niche site acquisitions in the education, construction and blue-collar sectors.

"It's interesting that the three biggest job sites in the UK are now all owned by traditional publishers," points out Simon Devitt, managing director of Fish4Jobs. DMGT's purchase of Jobsite is arguably indicative of how 'old media' is looking to safeguard recruitment revenues by developing strong online brands. But, although the market is maturing, new entrants are still expected. "I don't think you'll get down to a tiny number of job sites because the barriers to entry are so low," adds Devitt.

Speed is one great advantage that the job boards have over newspapers.

Many allow employers or agencies to pay for ads using a credit card. The job can be posted almost instantly so employers can receive applications on the same day, rather than waiting for the newspaper to hit the streets.

"If you can have a CV in front of a client in two hours, you will win the battle," says Robinson. Inevitably, however, cost is often as much a factor as speed. Robinson points to companies such as T-Mobile, GlaxoSmithKline and Lloyds TSB, which have all set up small, in-house e-recruitment teams, often staffed by ex-recruitment consultants whose role is to use the channel as efficiently and cost-effectively as possible.

Online recruitment specialist Enhance Media has a three-pronged business strategy. It trains companies on how they can save money by using the internet for recruitment, provides advice on corporate careers sites, and manages the National Online Recruitment Audience Survey (www.noras.co.uk), from which the next wave of results will be published in February.

"The traditional boundaries between media owner and recruitment advisor has become blurred," says Tim Elkington, managing director of Enhance Media. "Job boards may have to look for banner and button ad revenue, and revenue from corporate brochure pages. You may see job boards move into areas like response management and maybe psychometric testing."

Expectations are rising among job seekers and employers, placing pressure on the job boards to broaden and improve their offer. "Ten years ago, internet recruitment was no more than text on a web site, with an email and phone number," points out Richard Tyrie, managing director and founding director of Jobsgopublic. "Now it's about candidate relationship management - giving people feedback and managing them."

As its name implies, Jobsgopublic specialises in recruitment for the public sector. Tyrie says that, while job boards are attractive to the public sector because they can help to slash recruitment costs, talent management is becoming increasingly important. Tyrie thinks creating talent pools of people suitable for public sector jobs will help to drive his business forward. He also sees opportunities in helping public sector employers attract a wider range of applicants by using online content to position them as "modern, progressive employers".

Monster launched its Government Solutions service last summer, with the aim of helping the public sector with its online recruitment.

It also develops careers sites for corporate clients, such as Orange.

"It's an easy way for a company to have a professional site," says Joe Slavin, managing director of Monster. "It's all of our technology with their skin on it."

There are hundreds of niche players in the market, which are prey for the big sites. "We are not afraid to say that we've got a large budget to be the consolidator in the market," says Jobsite managing director Keith Potts. "We are looking for companies that are like-minded and offer synergies with us."

With an acquisition war-chest in place from DMGT, Jobsite is eager to snap up vertical job boards that will enhance its business, which is also being boosted by cross-promotion in other DMGT-owned media, such as the London Evening Standard.

Totaljobs.com's Robinson says that, despite the existence of big site predators, niche players can still prosper. "The big boards have significant first-mover advantage through having built up their brands over time. But you can have quite a comfortable life as a niche board, marketing yourself with a bit of search engine optimisation," he points out.

TopJobs chief executive officer Charlie Gibson is a big fan of search engine optimisation and he employs a two-strong team in-house to concentrate on giving search prominence to the job board. Gibson argues this is essential to market web-based businesses on the internet. TopJobs was one of the big names in the sector during the internet boom, but clocked up huge losses. Gibson bought the company from near bankruptcy in 2002 and has begun to turn its fortunes around. This year, for the first time, it is on course to make a modest profit, thanks in part to clever search engine optimisation.

Gibson says independent ownership has advantages. "Most of the ownership in this sector is by big media companies that got into the market by defending their position, rather than looking at what the client actually wants. We've made it so that the recruiter has a lot of control over the desktop."

Jobserve has also sought to give greater control to job seekers. In autumn 2004 it introduced RSS feeds as a way of syndicating job content. This allows users who sign up to receive jobs by email, on their PDAs or by mobile phone.

"A lot of people looking for work do so at work," says Robbie Cowling, founder of Jobserve. "They don't want to do it with a big Jobserve page on their screen. RSS is very discreet."

With online recruitment growing in relation to online traffic - Hitwise figures show that the category increased its share of visits by 6 per cent over the 12 months to November 2004 - it would be easy for owners to get complacent. But competition is tough. Those sites that fail to strike a good balance between marketing, innovation and customer relationship management could come unstuck. A few years ago, StepStone, with its multi-million-pound sponsorship of sport on Channel 4, seemed set to become a permanent fixture. But after burning through cash twice as fast as it was making it, its Norwegian parent decided to pull the plug and focus on other European markets, leaving 100 employees to rely on the help of rival job sites.

UK'S TOP FIVE E-RECRUITMENT BRANDS

JOBSITE

Developed by three brothers - Keith, Graham and Eric Potts - a 49 per

cent stake in the company was acquired by employment services giant

Manpower in January 2000. The entire stock of Jobsite was sold to Daily

Mail & General Trust for £35m in 2004.

Established: 1995.

Typical vacancies: 90,000.

Job seekers: 180,000 live CVs, 1.68m registered users.

Market share: 7.2 per cent.

TOTALJOBS.COM

Owned by publishing behemoth Reed Elsevier, totaljobs.com acts as an

umbrella site for the company's online recruitment brands, such as

CWJobs.co.uk, Caterer.com, and Retailchoice.com. A job application is

made through the site every 11 seconds.

Established: 2000.

Employers: 1,500.

Typical vacancies: 65,000.

Job seekers: 1m per month.

Market share: 4.9 per cent.

FISH4JOBS

The online classifieds brand for the regional press, Fish4 is owned by

Newsquest Media Group, Northcliffe Newspapers, Trinity Mirror and

Guardian Media Group. With a trio of smaller content providers, these

companies account for 60 per cent of the UK regional newspaper market,

spanning 650 titles.

Established: 2000.

Typical vacancies: 52,000.

Market share: 4.6 per cent.

MONSTER

Monster.co.uk is the flagship brand of Nasdaq-listed Monster Worldwide,

the parent company of TMP Worldwide Advertising & Communications, one of

the world's largest recruitment ad agency networks. Monster has 25 local

language and content sites in 23 countries worldwide.

Established: 1994.

Job seekers: 1m live CVs, 1.6m unique visitors a month.

Market share: 2.4 per cent.

JOBSERVE

IT engineers Robbie Cowling and John Witney founded a specialist IT jobs

service in 1994 and it has grown to 15 industry-specific sites, which

have signed up more than 3,000 recruitment agencies worldwide.

Established: 1994.

Typical vacancies: 5,500 new jobs a day.

Job seekers: Its daily jobs email alert is sent to more than 200,000

subscribers.

Market share: 1.9 per cent.