Yesterday’s post brought in a flurry of e-mails and phone calls from people with an opinion and information on TheLadders‘ value. Apparently Hoover’s estimate of $7.4 million for 2007 is too conservative.
So how much is the company really making?
After some investigation, a better guess of annual revenue would be in the $40 million range. Further nosing around reveals the company has been shopping for a buyer for some time now. Probably since mid-2007. So why haven’t they found a sugar daddy?
The reasons are very anecdotal, but apparently the valuation of the business is way out of whack with buyers’ expectations. And the price tag continues to go up as the company continues to have success.
Moreover, potential buyers seem skeptical at the company’s ability to grow to valuation levels due to potential competition and member attrition rates. TheLadders seems confident of the lock-in they have with users, but others apparently aren’t so sure.
Popularity: 16% [?]
February 22nd, 2008 at 1:14 am
The Ladders is [like many sites] a temporary community. This creates a fluctuation in valuation depending on what the term sheet looks like at a specific point in time. They should take whatever they can get and get out…if indeed it is ripe for a return as you describe.
February 22nd, 2008 at 12:16 pm
Time for The Ladders to cash in. Sustainability is a big issue for what they offer and like wine there is a right and a wrong time to pull the cork. They should pull the cork now at an optimum time.
February 22nd, 2008 at 1:22 pm
Oh I dont know….in a stagflated economy or when stock valuations look iffy, T yields are in the 2’s, and demographics point to tight employment, holding a business that generates cash may be better than actually holding cash….. if that is true, valuations will creep upward as fewer good deals are out there. Another factor is that big deals are having funding problems because of credit issues in the leveraged market. Smaller deals like this may be the only kind being done for awhile, which will also push valuations. Contracted medium to long term revenue is worth more, naturally, than short term transactional revenue, but eyeballs are still convertible to $$.
August 4th, 2008 at 5:40 pm
Ladders has just implemented a strange new strategy in an economy where there are fewer jobs and candidates are easier to find.
Ladders has always charged job hunters to sign up – $30/month/$180/year, which isn’t much if you’re actively looking and the site is any good.
Recruiters and employers were always allowed to post $100K+ jobs for free.
I run a retained executive search firm, and virtually never use paid advertising. I do post positions at free sites, which has been primarily Netshare, RiteSite and the Ladders (until recently) . All three specialize in $100K+ positions.
Ladders has just started phase 2 of their double dipping strategy, and it will make their site less appealing in the long run to job hunters. We’ll see what that does to their value.
In phase 1, starting November 1, 2007, they started charging new employers/recruiters $6,000 to $10,000 a year to post jobs or search resumes. Existing employers/recruiters were allowed to continue using it for free – for a while.
In phase 2, which started August 1, 2008, The Ladders started charging existing users $4500 to $10,000 per year to use the service. Most recruiters and many employers were already using The Ladders before November 1, 2008, so the drop off last November 1 wasn’t much. However, now usage from the people their members want to court (recruiters and employers) will fall off significantly, because there are many places to drop $5000 or $10,000 to look at resumes and place ads.
Bear in mind that their members – the job hunters – are still being charged to join The Ladders. Are they going to see the 35,000 $100K+ jobs that they’ve seen in the past, now that it costs money to post them there? Especially considering that employers/recruiters can post these jobs for free at Netshare and RiteSite? Do their job-hunter members know about this change?
By the way, now that my Ladders membership costs me money, I don’t have one any more. Better ways to spend my time and money.
August 5th, 2008 at 11:23 am
the future belongs to companies that create more value than they capture – the future is not about greed. http://www.internetinc.com/free-creates-value-for-jobs-boards