Recruit Holdings
Corporate History & Strategy

Around 1960, Japan was at the threshold of high economic growth, and the number of university students was increasing. However, the channels for distributing employment information connecting companies and students remained underdeveloped, and recruitment activities relied heavily on professor recommendations and personal connections. Companies also lacked sufficient means to deliver information directly to students, and a structural information asymmetry existed in the recruitment market.

Mid-sized and small companies in particular had limited means to convey their job openings to students, and no systematic information media existed on a university-by-university basis. Newspaper advertisements were aimed at the general public, and advertising media specialized for the student market remained an untapped area. This gap became a business opportunity.

In 1960, Hiromasa Ezoe founded the University Newspaper Advertising Agency as a sole proprietorship. However, at the time of founding, he had neither track record nor credibility, and major banks would not deal with him. To secure business capital, he personally visited the Tamuracho branch of Shiba Shinkin Bank, repeatedly explaining the necessity of his business.

By pledging land and a house owned by his father as collateral, he secured a loan of 3 million yen on his second attempt. The branch staff told him, 'The work you are trying to do is absolutely right.' With this loan, he secured working capital and commenced sales activities.

The 3 million yen loan was utilized as working capital during the founding period. Sales activities to place advertisements in university newspapers gained momentum, and advertising orders from companies gradually increased. The secured funding enabled sustained sales activities.

The number of advertising contracts expanded, and business with multiple universities progressed. The business continued as a sole proprietorship before transitioning to incorporation. As a result, because Recruit overcame its founding-era capital shortage through bank borrowing, this also became the origin of its later bubble-era debt-dependent structure (land acquisition through borrowing).

In 1962, the company launched the employment information magazine 'Kigyo e no Shotai' (Invitation to Companies), evolving from university newspaper advertising to booklet media. The company solicited interested students through direct mail, establishing a distribution system reaching over 1,000 recipients from the outset. A revenue model based on advertising fees from listing companies was established, and sales by booklet unit commenced.

The magazine adopted a structure in which the company both produced the media in-house and developed advertisers on its own. It was a structure that did not separate advertising brokerage from media publishing. Subsequently, in 1966, Diamond Inc. entered the market with 'Shushoku Guide,' and the company entered a competitive environment against a rival that significantly exceeded it in revenue scale.

The inaugural issue achieved listings from 66 companies, but the close rate was not high. The sales team visited 12 to 13 companies per day in Tokyo, progressed to negotiations with 6 to 7 of those, and ultimately closed 1 in 10—requiring that the number of visits be maximized.

The team thoroughly pursued feet-on-the-street sales targeting major companies as prospective clients, visiting approximately 200 companies to gather feedback on page composition and listing volume, making iterative improvements. A system was built that simultaneously advanced sales activities and media refinement.

The booklet expanded its circulation and reached approximately 170,000 copies per year by the late 1960s. A new market for student-oriented employment information magazines was formed, and the publication became established as a medium aggregating corporate advertising. However, the competitive environment continued, and a monopoly position was not achieved.

Under competition with Diamond Inc., a culture of accumulating orders through sales effort took root in the organization. A sales style of increasing visit counts and developing new clients through door-to-door sales became standard, and this sales-driven organizational culture persisted in subsequent business developments.

In 1971, Recruit completed its headquarters building in Nishi-Shinbashi and acquired land. The investment amounted to approximately 1.1 billion yen. At the time, the company's mainstay was employment information magazines, and it was a company dealing in intangible information, but the decision to own land as a tangible asset simultaneously aimed to supplement creditworthiness and strengthen the financial base. Against the backdrop of rising land prices during the high-growth period, real estate was recognized as an asset that served both purposes of asset building and business opportunity, not merely office space.

The company judged that its sales capabilities and customer touchpoints accumulated through the information magazine business could be leveraged to enter the condominium market, then still a young industry. As demand for residential housing expanded in urban areas from the late 1960s onward, the view took shape that real estate could become a second pillar alongside information.

In 1974, when Hasegawa Komuten approached Recruit with a proposal to sell 'Neo Corpo Gyotoku,' the company made its full-scale entry into the condominium business. The entry point was a personal connection between Hiromasa Ezoe and the vice president of Hasegawa Komuten, but the decision to commercialize was based on market size and growth potential.

The business was separated from the parent company and developed through Recruit Cosmos. From the late 1970s through the 1980s, land acquisition was accelerated and sales units expanded. By 1986, sales volume reached 4,333 units, ranking second nationally, and in 1987, revenue reached 175.7 billion yen, surpassing the parent company. Real estate grew into a core business alongside information magazines.

In the course of rapid expansion, issues surrounding the public offering of Recruit Cosmos shares came to light, developing into the so-called Recruit Scandal. The loss of social credibility spread across the entire group, forcing a review of the management structure.

Furthermore, the plunge in land prices following the bubble's collapse resulted in massive losses, and throughout the 1990s, Recruit found itself in a difficult position where aggressive investment was blocked due to the failure of its real estate business. The real estate business became the fundamental source of financial risk, and in the course of the group's restructuring in the 2000s, Recruit Cosmos was separated and ultimately its shares were sold. The real estate business was scaled down, and Recruit returned to a structure centered on information and human resources.

In the 1970s, demand for condominiums and suburban detached houses was expanding, and the proportion of real estate advertising in newspapers and television was rising. Hiromasa Ezoe noticed this trend and identified the opportunity in the absence of a medium that systematically connected suppliers and buyers, even as advertising proliferated.

Judging that the model of 'owning the media and developing advertisers independently,' established through employment information, could be applied to the real estate domain to create a new market, in January 1976, the company launched the monthly magazine 'Housing Information' for the Tokyo metropolitan area, embarking on diversification beyond employment information.

Housing Information's revenue consisted of listing fees (1.04 million yen per page) and a magazine cover price of 200 yen. Revenue per copy amounted to 1,363 yen, adopting a business model centered on listing fees from advertisers. The first 11 issues ran at a loss, but by the 12th issue, recognition had grown and profitability was achieved.

To create a virtuous cycle where more property listings attract more readers and more readers attract more advertisers, the company established an 'Information Review Department' to eliminate bait-and-switch listings. By protecting the media's value, the company simultaneously maintained advertising unit prices and expanded listing volume.

By around 1982, the Tokyo metropolitan edition shifted to weekly publication, and circulation expanded to 220,000 copies. Revenue reached 15 billion yen for the December 1982 period, recording approximately double the growth of the prior year. The Housing Information business expanded rapidly in a short period and emerged as a core segment of the information magazine business.

By 1981, Housing Information had grown to 15.4 billion yen, approaching the founding advertising business at 27.1 billion yen. This gave Recruit the opportunity to shed its identity as a pure employment information company and transform its business composition into a 'life information company.'

Entering the 1980s, Recruit intensified its acquisition of land in central Tokyo in parallel with the expansion of its information magazine business. Ginza and its surroundings were a symbolic location for elevating the corporate image, and the aim was to consolidate headquarters functions in a company-owned building to enhance both creditworthiness and social presence.

Around 1980, the company acquired a building in Ginza from Nippon Light Metal for approximately 20 billion yen, utilizing it as the headquarters building 'G8.' Subsequent land acquisitions in the Ginza-Shinbashi area continued, expanding the company's asset composition from an information magazine company to a comprehensive real estate-holding enterprise.

To meet capital requirements on the scale of tens of billions of yen, Recruit chose to finance through bank borrowing rather than internal funds. Between FY1983 and FY1984, the company borrowed approximately 100 billion yen, accelerating real estate acquisition. By adopting an aggressive leverage strategy, the company expanded its asset base rapidly over a short period.

As of December 1984, total standalone assets of 275.6 billion yen were matched against interest-bearing debt of 199.8 billion yen, pushing the debt ratio to 72.4%. Financial management shifted to prioritizing asset expansion over equity ratios.

The banks' willingness to provide large-scale lending was underpinned by the earning power of the information magazine business, which secured approximately 15 billion yen in annual recurring profit, combined with the rising land price environment of the time. Under the premise of continued real estate price appreciation, unrealized land gains functioned as de facto collateral.

As a result, Recruit transitioned to a structure in which the high-profitability information magazine business served as the foundation while land assets and debt expanded simultaneously. This asset-expansion-oriented financial constitution also laid the groundwork for amplified management risk thereafter.

In the late 1980s, Recruit was achieving rapid growth on the dual engines of information magazine and real estate businesses. Subsidiary Recruit Cosmos had completed OTC registration, and the value of pre-listing shares was surging. The fact that shares had been transferred to prominent politicians and bureaucrats prior to the public offering would later become problematic.

At the time, there were no clear regulations that immediately rendered pre-IPO share allocations illegal, but the transactions conducted within close relationships with political and business circles invited social suspicion. The management structure, which continued to expand amid the euphoria of the bubble economy, harbored vulnerabilities from the perspective of governance transparency.

In 1988, the issue of pre-IPO share transfers from Recruit Cosmos came to light and escalated into a major scandal engulfing Japan's political and business establishment. Amid mounting public criticism, founder Hiromasa Ezoe was compelled to resign as president, stepping back from the front lines of management.

In 1989, Ezoe was arrested on bribery charges, and the corporate image was severely damaged. Ida was appointed as successor president, and the management policy shifted to prioritizing credibility restoration, with a return to the core information magazine business and reorganization of corporate values.

The scandal severely eroded Recruit's social trust, affecting relationships with business partners and financial institutions. Furthermore, the inability to immediately exit the real estate business materialized as a severe financial burden when the bubble subsequently collapsed.

The decline in land prices in the early 1990s wiped out the unrealized gains of Recruit Cosmos, leaving massive interest-bearing debt. The parent company became the entity supporting the entire group, and the company transitioned into a prolonged financial restructuring phase. In 2003, Ezoe's guilty verdict was finalized, and he passed away in 2013 at the age of 76.

After the 1988 Recruit Scandal, founder Hiromasa Ezoe had stepped back from the management front lines but still held a large block of shares. Recruit was an unlisted company with limited share liquidity, making the selection of a buyer for the founder's stake a critical issue directly tied to the company's ownership structure.

Furthermore, with lingering real estate debt issues and damaged social credibility, capital stabilization was an urgent matter. Under circumstances where the possibility of being placed under bank management was being discussed, the disposal of the founder's shares was not merely a personal asset sale but a capital policy issue that would determine Recruit's future independence.

In 1992, Ezoe sold his 35.2% stake in Recruit to major retailer Daiei. The sale price was approximately 45.5 billion yen, and as a result, Recruit became an affiliated company of Daiei. The transfer of a large block of shares in an unlisted company was a significant turning point affecting the balance of management control.

However, this sale proceeded without sufficient consensus-building with the incumbent management team, causing serious conflict with successor president Ida. The positions of the management team, which sought an independent path, and the founder, who accepted the tie-up with Daiei, were irreconcilable, and tension over the capital structure spread both internally and externally.

Daiei's capital participation temporarily provided a stable shareholder, but the management philosophies of the two companies did not necessarily align. Subsequently, when Daiei fell into a management crisis around 2000, Recruit embarked on unwinding the capital relationship, buying back 25.2% for approximately 100 billion yen.

The remaining approximately 10% of shares were also sold to financial institutions by 2006, and the capital relationship with Daiei was dissolved. Recruit thus returned to independent management, and by restructuring its capital structure, it laid the foundation for its subsequent stock market listing.

With the bursting of the bubble, the unrealized gains of group company Recruit Cosmos evaporated, and massive interest-bearing debt surfaced. To avoid bankruptcy, Recruit's headquarters chose to effectively assume the debt, concentrating the financial burden on itself. As a result, group restructuring came to depend on the creditworthiness and earning power of the parent company.

As an unlisted company, Recruit had no recourse to raising funds from the stock market and was dependent on core business earnings and bank borrowing. As land values continued to decline, asset values deteriorated while debt expanded. At the end of March 1995, interest-bearing debt reached 1.4 trillion yen, with the debt-to-asset ratio rising to an extremely high level.

At the time in 1995, operating profit was approximately 60 billion yen, and by simple calculation, full repayment would have required over 20 years. Nevertheless, management explicitly adopted a policy of prioritizing repayment over expansion, concentrating management resources on cash generation through strengthening the core business. Reinvestment was kept to a minimum, with financial restructuring established as the top priority.

Concurrently, to facilitate the revaluation of impaired assets, the company recorded special losses in stages to compress the balance sheet. Since a one-time writedown could have resulted in negative equity, the method of gradually sorting through assets over time was chosen. Under coordination with the banking consortium, a restructuring path based on a long-term repayment plan was adopted.

From the 1990s through the 2000s, earnings generated from core operations were continuously allocated to debt repayment. The company strengthened information services and staffing areas that required minimal invested capital, enhancing cash generation capacity to steadily compress debt. By the mid-2000s, operating profit expanded to approximately 100 billion yen, accelerating the pace of repayment.

As a result, by the end of March 2007, interest-bearing debt had decreased to 37.5 billion yen, and the restoration of financial health was substantially completed. However, in the process, large-scale acquisitions and aggressive investments were constrained, and the growth strategy remained restrained. The 1.4 trillion yen in debt became a weight that governed the company's decision-making over an extended period.

In the late 1990s, Recruit was treating the compression of 1.4 trillion yen in interest-bearing debt as its top priority. As the financial restructuring progressed, suppressing fixed costs and maintaining a high-profitability constitution became essential, and the review of the personnel cost structure in particular became a critical management theme. A seniority-based salary system inherently carried a cost-escalation structure over the long term.

At the same time, the information services-centered business had a strong need for agility and the vitality of younger employees. Streamlining the organization and maintaining the speed of decision-making were recognized as the source of competitive advantage. Both financial constraints and business characteristics necessitated the strategic design of age composition and headcount.

In 1997, Recruit introduced the OPT system, which added 10 million yen to the severance package of employees aged 30 and over upon departure. By establishing a mechanism to encourage independence and career changes, the aim was to simultaneously achieve headcount reduction through natural attrition and compression of fixed costs. As a result, the organization was progressively restructured around younger employees.

Management harbored concerns about the outflow of talented personnel but prioritized compatibility with the financial restructuring. Turnover rates ran at 6 to 8%, and excessive disruption was avoided. The system was also perceived as a 'mechanism to encourage resignation,' but under conditions of massive debt, the option of continuing to retain older, higher-paid employees was not viable.

Through the OPT system, the organization was reorganized to approximately 3,000 employees, establishing an agile structure. A youth-centered pyramid structure was formed, and performance-based evaluation and early promotion advanced. This personnel design was adapted to the demands of an era that prioritized profitability and cash generation capacity over business expansion.

On the other hand, the outflow of talented personnel to the outside became routine, and Recruit became known as a 'talent-producing company.' The system, which continued until the 2010s, was abolished in 2021 and a change in direction was pursued, but the 1997 decision was a symbolic organizational strategy during the financial restructuring period.

In the late 1990s, Recruit was saddled with approximately 1.4 trillion yen in interest-bearing debt, treating financial restructuring as its top priority. Both trust restoration after the Recruit Scandal and debt compression needed to proceed simultaneously, and management required stable core business earnings. A management structure that could maintain organizational cohesion while delivering sustainable cash generation was needed.

Eiko Kono had built a track record in the sales division since joining in 1969, and served as vice president overseeing business operations. She replaced the previous telemarketing-centered sales approach with door-to-door sales, achieving results through proposal-based selling that leveraged competitive intelligence. Having been identified as a potential successor around 1991, internal succession became increasingly realistic.

In June 1997, Eiko Kono was appointed president. She attracted attention as Recruit's first female president, while also serving as a symbolic example of meritocracy in action. Her appointment reflected her track record as vice president in managing core business profitability, having secured an operating margin of approximately 30%.

Her policy after taking office was consistent: prioritizing the maximization of core business earnings and debt compression. She maintained high profitability in information magazines and human resources businesses, continuing the management approach of securing repayment resources through loan repayment funds. Meanwhile, even as internet adoption was spreading, her strategy was cautious about large-scale new investments, limited to digitizing existing businesses.

During her tenure from 1997 to 2003, Recruit maintained its high-profitability business constitution and advanced the compression of interest-bearing debt. The improvement of financial health progressed steadily, and the restructuring track achieved a measure of success. The foundation as a stable cash-generating company was rebuilt during this period.

On the other hand, new business creation in internet-related areas and large-scale growth investments remained limited. In the e-commerce and IT domains, pioneering companies rose to prominence, and talented employees were also observed departing for other firms. However, considering that this was management conducted under the constraint of massive debt, the Kono regime can be positioned as having functioned effectively during the restructuring period.

In 1987, Recruit entered the staffing business through subsidiary Seeds Staff. Initially, the range of industries was limited and the market was small, but deregulation accelerated in the late 1990s. The deregulation of manufacturing staffing in particular aligned with companies' needs to reduce fixed costs, and a phase of assured market expansion was reached.

Companies in the post-bubble era were seeking ways to secure talent while restraining employment. Against this backdrop, the outlook that staffing would transform into a structural growth market gained traction. For Recruit as well, staffing's positioning as a new pillar complementing the information magazine-centered revenue structure gained prominence.

In July 1999, the subsidiary was renamed 'Recruit Staffing,' positioning the staffing business as a full-scale growth domain. By unifying the brand with the parent company to enhance credibility, the strategy aimed to capture market share rapidly during the market expansion phase.

Furthermore, to strengthen regional expansion, the company pursued acquisitions of prominent staffing companies. Starting with the acquisition of Olfa in 2004, the branch network was expanded to approximately 40 locations nationwide. A broad-based model covering a wide range of industries, rather than specialized niches, was adopted, pursuing growth through volume expansion.

As a result, standalone revenue reached approximately 170 billion yen by March 2009, and the staffing business grew into a core segment of Recruit's consolidated revenue. Backed by deregulation and corporate outsourcing demand, the staffing business became the driver of revenue growth in the 2000s.

However, competitors expanded market share through heavy advertising and mass sales strategies, and the company could not break into the top tier of industry rankings. Furthermore, from 2008 onward, the economic downturn caused demand to plummet, and standalone revenue dropped sharply by March 2011. While being a growth industry, the structure's high sensitivity to economic cycles also became evident.

Until the 1990s, Recruit had grown through specialized information magazines targeting metropolitan areas, covering employment and housing. However, in regional cities, smaller population sizes meant that advertising demand could not be sufficiently sustained by single-topic specialty magazines—a structural barrier. In local markets, the number of advertisers was also limited, making it difficult to directly transplant the urban model.

To address this challenge, in 1994 the company launched the lifestyle general-interest magazine 'San-Roku-Maru,' initiating community-oriented information delivery. In the Sapporo area in particular, a format featuring coupons prominently succeeded in uncovering advertising demand from visit-based businesses such as restaurants and beauty salons. Through this experiment, the possibility of a free coupon medium specializing in narrow trade areas became clearly recognized within the company.

In July 2000, Recruit launched 'Hot Pepper' on a trial basis, distributing it in three areas: Niigata, Nagaoka, and Takamatsu. The booklet was offered free of charge, with a format centered on coupons for restaurants and beauty salons. Trade areas were delineated at approximately 2 km radius, and area design was based on population density and foot traffic patterns to maximize advertising effectiveness.

Based on the test results, in 2001 the company expanded to 30 areas, committing to a full-scale nationwide rollout. In regional cities, partnerships with existing advertising companies were established to leverage local sales networks for rapid advertiser development. Hot Pepper thus gained traction as a medium with the clear positioning of 'hyperlocal x free x coupons.'

In FY2002, revenue reached 14.7 billion yen, and by the late 2000s, revenue expanded to over 40 billion yen. As a free coupon booklet, it established itself as the customer acquisition platform for local visit-based businesses, establishing the hyperlocal advertising model. However, growth gradually decelerated due to competitor entry and advertising market deterioration from the Lehman shock.

Subsequently, led by Hot Pepper Beauty, the company strengthened online reservation functionality and shifted its center of gravity from print media to a web platform. The role of the coupon booklet diminished, and in 2023, booklet distribution was suspended. Hot Pepper thus transformed its business structure from a regional print medium to a digital reservation platform.

In 2004, Recruit conceived 'R25' through its internal new business development program, targeting free information magazine at urban-working men aged 25 and over. While Hot Pepper had succeeded with lifestyle information targeting women, a free medium specialized for the male business demographic remained underdeveloped, and there was room to develop a new advertising market segment. The editorial design emphasized substantive editorial content to enhance its value as reading material.

At the time, print media advertising was still effective, and massive reach was possible by securing commuter route distribution points. Under the assumption that a certain minimum scale was required for viability as an advertising medium, the launch from the outset was oriented toward large-scale publication, with distribution centered on station racks.

In March 2004, R25 was pre-launched with 200,000 copies primarily in Tokyo. Just four months later in July, the decision was made to expand to a 500,000-copy run across the entire Tokyo metropolitan area. Rather than phased validation, this was a judgment to pursue scale from the initial stage, aiming to establish presence as a 'large-scale urban medium' for advertisers.

Distribution points were secured along major station commuter routes, achieving high-frequency contact with working men. Through free distribution and high-quality editorial design, circulation temporarily expanded to approximately 600,000 copies, gaining a certain level of recognition as a medium targeting the metropolitan business demographic.

However, advertisers were primarily large corporations, and maintaining the high-unit-price model was not easy. In 2005, a joint venture with Dentsu, Media Shakers, was established to supplement sales capabilities, but commission costs compressed profitability. Additionally, with the proliferation of smartphones, information consumption during commutes rapidly shifted from print to digital.

In 2014, circulation was reduced; in 2015, the print edition was suspended and the business shifted to web. However, competition intensified. Ultimately in 2017, the R25 business was sold to CyberAgent, with the brand being inherited rather than the print free magazine model.

The real estate business, entered in the 1970s through subsidiary Recruit Cosmos, expanded rapidly and grew to exceed the parent company in revenue by the late 1980s. However, after the bubble burst, plunging land prices exposed massive unrealized losses, and Recruit's headquarters shouldered the financial burden, including taking over approximately 350 billion yen in Recruit Cosmos-related real estate.

Throughout the 1990s, as the company progressed with repaying 1.4 trillion yen in interest-bearing debt, the pillar of group restructuring was placed on 'selection and concentration of businesses,' and real estate was clearly positioned as a non-core business. Once a certain prospect for financial recovery was established, the restructuring of capital relationships became an unavoidable management issue.

In May 2005, Recruit decided to transfer its Recruit Cosmos shares to the investment fund Unison Capital, transferring management control. This was not merely a sale of shareholdings but signified a complete withdrawal from the real estate business, which had been the symbol of the bubble-era expansion strategy.

The sale was structured primarily as an MBO, executed on the premise of independent management on the Cosmos side. Recruit clarified its policy of concentrating management resources on the 'HR and information' domain, choosing to lighten its capital structure. The capital ties with real estate that had continued since the founding era were brought to an end by this decision.

After the sale, Recruit Cosmos changed its name to Cosmos Initia and maintained its stock listing, but business performance deteriorated sharply due to the 2008 Lehman shock, and in 2009 it fell into negative equity of 45.1 billion yen and filed for ADR.

As a result, the 2005 sale carried the significance of severing financial risk for Recruit. Had it continued to hold the shares, the likelihood of bearing massive losses again was high. The real estate business that had continued since the 1970s was effectively settled here, and Recruit confirmed its return to being an information and human resources company.

Since entering the market in 1987, Recruit had expanded its staffing business through subsidiary Recruit Staffing, reaching approximately 150 billion yen in revenue by the mid-2000s. Backed by deregulation and corporate demand for fixed cost reduction, the market was expanding rapidly, and staffing had grown into one of the company's core businesses.

However, the company's industry ranking remained around 5th place, and the gap with the leading company could not be closed. Staff Service Holdings in particular, while unlisted, had expanded its scale through aggressive sales and a mass-mobilization model, leading in revenue terms. Reaching the top position through organic growth alone would have required considerable time.

In response to this situation, in December 2007, Recruit decided to acquire industry leader Staff Service Holdings. By combining with existing Recruit Staffing, the aim was to simultaneously expand scale, branch networks, and customer bases, elevating the company's competitive position in the staffing market in one stroke.

This was a strategy of reversing rankings through external acquisition rather than relying on organic growth. In the staffing industry, where competitive advantage is determined by the volume of registered staff and client companies, acquiring the industry leader was also a measure to buy time. It became a decisive step in transforming the corporate image from an information magazine-centered company to a comprehensive human resources company.

However, immediately after the acquisition, the Lehman shock hit in 2008, and corporate hiring restraint accelerated rapidly. In Japan, staffing contract terminations occurred in succession, and business performance across staffing companies deteriorated significantly. Revenue declines materialized at Recruit's two staffing subsidiaries as well, and the growth scenario predicated on expansion required revision.

As a result, structural reorganization including headcount reductions and office consolidation became necessary, and the acquisition got off to a difficult start. However, the scale integration strengthened the business foundation, and over the long term, it served as a catalyst for elevating the human resources business to the group's core.

In 2012, Masumi Minegishi assumed the role of CEO at Recruit Holdings, setting the clear goal of 'becoming the global leader in the HR field.' This shifted the center of gravity of management from a domestic information magazine focus to overseas expansion, with the primary battleground redefined as North America and Europe. Competing globally was recognized as requiring a leap forward in both scale and technology, beyond the extension of existing businesses.

Behind this was the experience of struggling with solo expansion into China in the 2000s. Difficulties in local organization governance and talent management exposed the limits of organic overseas expansion. This reflection led to a strategic pivot toward entering overseas markets through acquisitions, initially accumulating PMI expertise through smaller deals.

Around 2010, the focus of overseas acquisitions was on staffing companies, and the concept of centering the strategy on technology companies was not yet fully articulated. Even under the aim of becoming the world's top HR company, whether to build scale through staffing or venture into the digital domain remained undetermined. Amid this uncertainty, the company secured financial capacity for a major acquisition and was searching for the next move.

The catalyst for Indeed emerging as an acquisition candidate was a proposal by Hisayuki Idekoba, then 36 years old and responsible for new business development. Indeed, a U.S.-based job search engine, was virtually unknown in Japan, but Idekoba saw potential in the founder and business model and strongly advocated for the acquisition internally. The deal was initiated not by top-down strategy but by an individual's passion.

Indeed was founded in 2004 with approximately 550 employees and estimated revenue of 10 to 20 billion yen, yet was recording losses due to advertising investment and development costs. The acquisition price was approximately one billion dollars—over 100 billion yen and Recruit's first major deal at this scale. Opinion was divided internally, comparing it against the acquisition of a staffing company with stable earnings.

After due diligence conducted over a period of just a few weeks to one month, CEO Minegishi decided to proceed with the Indeed acquisition. It was a bet on the premise that technology would transform the structure of HR, at a scale where failure would have questioned his leadership. Post-acquisition, Idekoba assumed the role of Indeed's CEO, and a structure was put in place that delegated authority to the local team.

Following the acquisition, Indeed continued to expand in North America and Europe on the strength of its search-based recruitment model, driving the group's growth throughout the 2010s. Revenue in the HR Technology segment expanded, and Recruit's revenue structure shifted from print-media-centric to online-centric. The axis of the business portfolio had clearly changed.

Financially, the acquisition resulted in a significant increase in intangible fixed assets, and a review of capital policy also progressed. With the objectives of securing growth capital and enhancing transparency, the company listed on the First Section of the Tokyo Stock Exchange in 2014. Indeed was positioned as a core asset in the listing narrative.

In PMI, the approach was not to rush integration but to delegate autonomy to Indeed's management team and engineering organization. Local-led decision-making and a technology-oriented culture were maintained, and the business continued to grow sustainably. As a result, Recruit redefined itself from a comprehensive HR company to an HR technology company, and market perception shifted significantly.

Juken Sapuri (Exam Sapuri) was a learning app for high school students conceived by Fumihiro Yamaguchi and others through Recruit's new business contest. The multiple attributions regarding the originator are emblematic of the company's new business culture. Development was initiated by Koji Doi with a team of approximately 10, rapidly expanding to a team of several dozen. In the early smartphone era, the team refined the product with an in-house development approach.

The greatest challenge was securing popular prep school instructors. The motivation for providing lecture videos to an unproven new service was weak, but through direct negotiation with instructors such as Manabu Hijii, English and mathematics instructors were secured, and by 2014, approximately 1,000 hours of video content had been accumulated. Initially offered as a one-time purchase at 5,000 yen per course, the high price became a barrier to adoption.

Prioritizing adoption, the company made a dramatic shift from a one-time purchase model at 5,000 yen per course to a SaaS model at 980 yen per month. In exchange for lowering the unit price, the design shifted to acquiring a large subscriber base and accumulating LTV through recurring payments. Reaching the breakeven point required tens of thousands of subscribers, necessitating an integrated redesign of pricing, user experience, and acquisition.

Simultaneously, from 2012, television commercials were deployed to rapidly expand awareness. Opinions on the advertising effectiveness were mixed, but an initial subscriber base was essential for the monthly model to become viable. The positioning was changed from educational material sales to a continuing service, transitioning to a structure that recovers the heavy cost asset of instructor videos through scale.

With the shift to monthly pricing, paid subscribers grew, reaching 167,000 by the end of March 2016, and profitability was achieved. The barrier of the high-unit-price model was overcome, and the service became established as an educational service premised on continuing value. Content additions supported subscriber retention, and a cycle of scale expansion was formed.

From 2020, the COVID-19 pandemic caused a surge in online learning demand, and the subscriber count approximately doubled from 799,000 in FY2020 to 1.57 million in FY2021. Leveraging the tailwind of external environmental change, the low-price recurring payment model was established, and the foundation as an educational SaaS was solidified.