Like you, I’m doing my best to wrap my head around this whole economic, bailout, end of days thingy. I’m especially hoping to gain some clarity in regards to what it means to the employment space.
Obviously, companies not hiring means a lot of vendors not making money. The best many players can hope for is holding steady while watching for falling rocks. Having been a victim in the last downturn, I know how ugly it can get. As one industry leader recently put it to me in private, “Our industry is f***ed!”
That said, I somehow doubt itzbig will be an isolated incident. With one eye on the rearview mirror and one on the road ahead, here’s my take on possible winners and losers over the next 12 mos.
Losers
1. Jobster - OK, lets start with the obvious choice. Former CEO Jason Goldberg once mocked Monster for being an online version of Nascar due to its excessive use of advertising. Ironically, it’s Jobster who’s going overboard with desperation on the advertising these days. They’ve even succumbed to letting one-time competitor Indeed backfill their own job content. Add the fact that the company has incredible weight on its shoulders in the form of big investment dollars and survival becomes that much more difficult. They’re likely sleepless in Seattle praying for a buyout.
2. Monster - Their U.S.-business being in the tank is no secret. But as international markets start to feel the ripple effects of America’s downturn, bad times globally may start to multiply for Trumpasaurus too. They’re putting a lot of buzz around January’s new-and-improved relaunch, but it may be too little, too late with companies already jumping to alternatives with better ROI.
3. Video Resume Services - The number of smart people touting video is undeniable. Unfortunately, the voices claiming the video resume is dead are equally convincing. An economic downturn is not a good thing for anyone hoping to make money on the creation, hosting and promotion of video. It’s an advertising “extra” that’s likely to be passed by employers and the perception of legal issues, real or not, is still very difficult to overcome.
4. The eHarmonies - Anecdotal evidence - not to mention the shutdown at itzbig - points to challenging times for these experimental services. And when employers batten down the hatches of recruiting dollars, they stay with tried and true methods instead of straying outside of their comfort zones. There’s no romance without finance and this is one break-up that’s looking likely in bad times.
Winners
1. LinkedIn - Is anyone hotter? The professional networking site is a money-making machine, adored by all recruiters. No doubt they’re bound to come out of the downturn stronger than ever with even more profiles thanks to increased demand (a.k.a., job seekers). They’ve also seemed to have fought off any threat Facebook might have posed. If they ever decide to optimize their job board for Google, they’ll be really dangerous. Next trick: Make DirectAds as recognized as AdWords.
2. Craigslist - We all bowed down to Craig after the last downturn. They survived as a beacon of hope in Silicon Valley while most of the rest of the city’s Web company’s burned. This downturn will be no different. Only this time, their brand will be stronger, farther reaching and more profitable as even more cities foot the bill for job postings.
3. Vertical Search Engines - Unlike the counterpart in Seattle, these simpletons used Google as a model of success instead of Facebook, took a relatively small amount of capital, and are coming out on the side of profitability. The number of niche job sites that count on them for significant traffic is undeniable at. That incoming cash flow will decrease, but not to a critical low, and overseas markets should pay off.
And those same niche sites are going to continue to pay The Piper because PPC advertising on major search engines goes up and up each month. With their job seeker traffic continuing to creep up on the big boys, the verticals only have to convince employers to jump on the heroin drip in to really make it big.
Yes, there are more we could go into. It’ll be an interesting 12 months. Should be lots to report. But for now, this’ll do. Hey, we like to keep it short. You probably have to get back to updating your resume anyway, right?
October 14th, 2008 at 10:44 pm
deposits and despots. I gues Mayer Amschel Rothschild was right “Give me control over a nation’s currency, and I care not who makes its laws.”
October 14th, 2008 at 11:15 pm
interesting post joel. i’d be interested to see data supporting your view that indeed, simply hired, oodle and other vertical search engines are becoming profitable. and what about careerbuilder and dice?
October 15th, 2008 at 1:00 pm
Can Monster save itself? Maybe - but they’d need to start all over again and stay up with internet developments this time … otherwise they’ll be left behind.
October 15th, 2008 at 1:19 pm
What are your thoughts on CareerBuilder.com? My industry friends tell me that after beating Monster in the US, they are making some real headway Internationally. They seem to be profitable and have a lot of cash. What are your thoughts?
October 15th, 2008 at 5:44 pm
I might just add the newspaper dimension to this discussion.
A downturn is going to really sharpen the value proposition between newspaper employment advertising and online employment advertising, and will rapidly accelrate the ongoing structural migration of the market towards online.
Perhaps we’ll see the end game for print employment advertising or at least some spirited attempts to reinvent the medium?
This end game will affect Careerbuilder, Monster and Hotjobs in different ways, not to mention platforms like Adicio.
It would be great to get your thoughts on the role of newspapers in the online employment classifieds markets in the year ahead.
October 15th, 2008 at 6:49 pm
Monsterlover1…interesting comment. The truth is that Monster is actually in the best postion of the big boards to ride out this downturn. They are 1. Profitable 2. Have over 700 Million in Cash 3. Have zero debt. Three key factors in any economy, especially this one. As for your Careerbuilder friends, the truth is that they are actually NOT cash rich, they are living quarter to quarter on earnings… and 2 of the 3 partner companies are verging on bankruptcy protection. As for international headway? Outside of the US, it’s been neglegable. They have leveraged parent companies relationships in the US to get into international accounts (UK, Canada)..while that worked for a while, the renwals aren’t there - ROI is very poor.
October 16th, 2008 at 11:02 am
Joel I cannot imagine why you would lump “the eHarmony’s” together just because one of them had their investors back out. That type of generalization is silly. How many non matching job boards failed in the last few months? 100, 1000, 10,000? But 1 matching site has their investor back out and now the category is doomed? Please! Realmatch is capturing market share, opening new offices, hiring more staff and generating more revenue. Realmatch now powers the job channels of nearly 1200 sites. We have growth in every area where it matters. I see other “eHarmony’s” growing too. I think your generalization will be way off but as they say, we shall see.
I am not the only one to feel your comments were a bit shallow and way off: http://allianceqblog.qaaqblogs.com/2008/10/15/doomsday-predictions/
October 17th, 2008 at 5:24 pm
Joel — good article and quite accurate predictions!
I would only put CareerBuilder next to Monster in the list of companies that are going to fall.
Both Monster and CareerBuilder are going to fall only relative terms — they may lose profitability and half of market share, but
Would not go into total bankruptcy.
October 20th, 2008 at 4:09 am
Joel, how do you see this affecting outsourcing, esp. the RPO and HRO industry?