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Targeted Communication
(August 05, 2005) We're giving serious time and attention to the question of vertical search. From here, it looks like the various companies (SimplyHired, WorkZoo, Indeed) believe that an older technology can be reborn to suit market timing. We're not so sure, the depth of our uncertainty makes us want to look harder at the question.

The vertical search companies use job scraping techniques to build massive databases of job advertisements. The techniques of job scraping are nearly a decade old and used to build ad databases at most new job boards. They are also used to collect ads from paying customers. While Monster could not turn FlipDog into a profitable company, they continue to use scraping techniques to build their online employment index.

It's pretty clear that the vertical job search companies are not really gunning to take on the existing players. There's another motive under the covers. Partly, it's a hope that Yahoo or Google will reach out and purchase their blossoming entry into the job market. Partly it's a belief that the market has really turned into a candidate centric sellers market. Partly, it's a belief that technology will trump marketing. Partly, it's a belief that market timing is the gateway for technologies.

There are no cases at all of an outside innovator defeating the incumbent in its own chosen technology. No matter how superior a technology is, you can't prevail by doing the same thing that the incumbents are doing. Their momentum and economies of scale and scope and experience and finance and capital and all together create a juggernaut that can't be directly confronted. So you've got to figure out some way to infiltrate other products that employ features of your product that can't be duplicated by the incumbents.
- The Most Superior Technology Cannot Beat the Incumbent, an interview with George Gilder

You might take a look at this promotional movie. In the heat of a very serious labor shortage, pretty standard job board companies are realizing good success in Australia. It doesn't look like the escalating problem makes a market for alternate technologies. Incumbency, whether it is a competitor or a technology has a strong inertia.

So, where does the optimism come from?

Something is changing in the labor market. Outsourcing has caused us to awaken to the fact that the market for jobs is really global. That results in policy decisions for organizations and reframing for individual job holders. That seems to be the tip of the iceberg.

The explosion of one-to-few networking tools (blogs and some social software) may have the effect of inverting the traditional market dynamics. The newspapers are certainly terrified. Advertising is decentralizing quickly (and may even be dead).

In the medium term (already in place at some companies), recruiting is more and more a game of targeted communications. Exposure to an ad may jolt a currently employed worker into action. Certainly, the sort of long term courtship we've been encouraging is starting to be understood as fundamental to talent pool development.

Anyhow, we're checking our bets for the moment. Vertical search may well be something we didn't expect.

John Sumser

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