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National Network II

(June 08, 2004) - There is powerful magic in CareerCast's national database. A solid attempt to repudiate centralized, hierarchical models, the service allows extraordinary autonomy for its customers. On one level, CareerCast is actively positioning itself as a meaningful alternative to CareerBuilder. At the same time, it is using this approach to solidify its grasp on the newspaper market beyond CareerBuilder.

Magic is a zero cost solution that adds value for customers and job hunters alike while delivering additional high-margin revenue in an upsell that everyone buys.

From a pricing and cash-flow perspective, the service works like this:

  • Each CareerCast customer (Job Board property) sets its own price for the National service
  • Each customer keeps all fees received from their sales. (Perhaps a very modest fee to CareerCast itself)

There is no way that any competitor, no matter how you define it, can offer similar freedom and performance incentives. The national network, aside from some legal paperwork accomplished by the Dow Jones team, has no management, location, marketing, collateral material, branding, employees or any other tangible evidence of business substance.

But, that doesn't matter in practice. Think back to yesterday's example (the KFIE station job board). On its own, KFIE is able to provide its audience with 167 jobs. Access to the postings from other CareerCast customers rapidly grows that database to over 14,000 jobs (47 within 50 miles of Evansville). The benefit to job hunters is obvious. KFIE's credibility is expanded. Thorough reach into microniches becmes a matter of execution for CareerCast Clients.

From a marketing perspective, each job board gets the opportunity to peddle inclusion in a database with other sources like the Wall Street Journal.

An upsell that all customers buy is a mixed blessing. You might remember the famously terrible radios installed in most cars in the 1970s and 1980s. All buyers bought a sound system upgrade. What was fundamentally a pricing strategy rapidly became the core of the market's perception. People simply thought that the car companies chintzed anywhere they could as the result of design decisions in the sound system.

Similarly, customers are rarely happy about the prospect of paying delivery charges and other dealer add-ons. Whether or not it's true, paying the additional markups always feels like paying twice for the same thing. CareerCast customers run an unassessed risk to their brands when they segregate and charge for national network results.

Tomorrow, we'll take a final look. Radical decentralization causes a range of problems that want to be managed by a hierarchy. The CareerCast solution depends on a continuing level of generosity from its only investor that may, in fact, limit the prospects for growth. The job board business is, from our perspective, a marketing process. Whether or not an entrant with no marketing expertise or budget is sustainable remains to be seen.

John Sumser

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