Also revealing is the company’s recent use-burn-and-dump campaign to start an executive-resume-writing business. Ladders partnered with professional resume writers, picked their brains, established a certain quality level, then slashed them as the biz took off. The number of ticked-off, top-level resume writers telling their stories all over the Net suggests any buyer oughta do a bit more due diligence on that new “business.” Several of these ex-partners claim client data they were given revealed that around 25% of resume customers were below Ladders’ “$100k” level. If so, I’d expect resume revenue to drop dramatically. Especially if the new resume bullpen writes as well as Cenedella does in the “member e-mails” he sends out.

There should be little mystery to this. Cenedella came from HotJobs, another data base company that went the same route. These are not “career” businesses in any way, shape, or form — any more than Monster is. They are data base companies selling recycled records. When your company’s product doesn’t work, e.g., CareerXroads reports Monster’s ability to fill jobs is about 2%, then the market value of the company is a figment of some analyst’s short-term imagination.

Ladders may have started out with a relatively elite base of members. The new marketing campaigns are cattle calls, and what that should tell any prospective buyer is that this Ladder only goes down.

It says Hoovers is $7.4m in sales (I’ve heard it is much higher BTW) not earnings. I was wrong. Earnings is 25x but revenue multiple is 4-7x like you were hitting at. I don’t think Matrix Partners would only go for a 20-30m exit though. I heard that TheLadders was close to $40-60m in revenue oddly enough so they might still be in that $150-$200m valuation. Hoovers is usually off.

Cheers

Mark Newman
CEO, HireVue

If someone bought TheLadders for $30 million it would be steal. Monster is valued at 25x earnings, Dice is also – that would give TheLadders a value of $185 MILLION Dollars if their $7.4m in net income is correct which I think it might be. A nice payday for Cenedella and Matrix Partners.

Compared to many other job boards in the space achieving such hefty valuations with relatively little to no revenue or income compared to price I think theLadders might even get more than $200m if they play their cards right. A lot of these job boards are being bought right now too so it is possible it could be more.

Keep on blogging – you are one of the best around.

Cheers

Mark Newman
CEO, HireVue

I think that the article made some good points but failed to adequately distinguish between short- and long-term value. A national ad campaign may drive up the short-term value of the business by boosting traffic and revenues but once the funds for those types of campaigns dry up then so does the traffic and revenues associated with those campaigns. No long-term traffic or revenue boost, no long-term boost to shareholder value.