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It is better
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John Sumser

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(May 14, 1999) Quietly, professionals with rare skill sets have been participating in small private auctions. Recently (see our May 03 issue), entire project teams have moved towards auctioning their services. Now, TMP (Monster's parent) is promising the release of a service for "free agents" on July 4, 1999.

By winning the CareerMosaic account, the team a Ezeenet has put their name on the map of Recruitment Data handling services. EzeeNet services for our industry include EzeePost, an automatic posting service; EzeeResumeFinder, a resume mining agent that aggregates and structures resumes from various sources on the Internet; and EzeeCareerEvents, a searchable database of career fairs, campus job fairs etc. Add one more serious competitor to the job distribution (a la Junglee) game.

Add Vision, Inc to that pile. The Alameda, CA company, which takes an odd pride in their goal of "webifying companies", has launched HR Publicist which we'd class as a modular job board solution for corporate Recruiting. An impressive features set makes the offering useful as a benchmark.

We loved having company in the Industry observer camp. CareerCrossroads, the best selling job board directory, has left the observation deck and gone on to the playing field. InfoGist is their co-branded service that allows users to search the net in a variety of ways. When we asked whether joining the fray would bias their assessment of the Top websites, CareerCrossroads did not return our email.

Things change, the playing field rotates, spectators become players, features expand. Such is the web. At the end of a critical week, we find the marketplace expanding, the competition multiplying, the options increasing and the benefits growing. Consolidation of the market seems unlikely any time soon.

- John Sumser, © TwoColorHat. All Rights Reserved.

The Dust Settles

(May 13, 1999) We live in a weird time. The Reuters story about yesterday's launch was headlined "CareerBuilder IPO Fails To Stun Investors." We, on the other hand, find lots to mine in the relative success of the IPO. At market close, CareerBuilder was trading at $16, much higher than we'd expected.

The market analysts viewed CareerBuilder's performance with jaded eyes:

``You have to have a killer concept, a next generation of something-type (Web) product in order to trade at a great premium,'' Roth added.

CareerBuilder's site is essentially a resume exchange, Roth said. Clients pay a fee to list job openings. But Roth questions the company's effectiveness.

``If they would come up with something new and unique, like quicker recruitment, recruitment conferences, getting people together online to do interviews ...,'' Roth said.

``But the online recruitment technology is not quite there yet,'' he added.

Roth believes that future successful online companies will have to have a big name backing them, solid revenue streams or a niche product, or all of the above.

-from the Reuters story

Meanwhile, we were watching the fundamentals. At $16/share, CareerBuilder accomplished the following things yesterday:
  • They gained instant access to roughly $35M in operating cash (we're jealous)
  • More importantly, their remaining shares of stock have a market value of almost $250M (market cap)
With the equivalent of nearly $300M in unfettered spending capability, CareerBuilder is set to follow TMP's acquisition path.

Everyone in the industry will begin to calibrate their net worth based on the IPO stats. With 250,000 unique visitors in March, a valuation based on traffic would make CareerPath worth double, Career Mosaic and Headhunter.net worth quadruple and Monster worth 9 times the value of CareerBuilder.

That's just inside the pure web segment of the industry. Imagine the corporate offices at CDI. With a market cap of only double, management must be really kicking themselves for not investing more heavily in their (and MRI's) website. Korn Ferry, trading at a significant premium, has only a slightly higher value. Heidrick and Struggles stock price is languishing at its opening price with a market cap roughly equal to CareerBuilder. TMP, off by more than 33% from its highs, has a market cap of over $2B (which explains their acquisition prowess.)

Right now, the non-Recruiting Internet game is an acquisition play. Companies go public to fund buying sprees that shore up the long term value to shareholders. Watching CareerBuilder's next steps will be an interesting spectator sport.

- John Sumser, © TwoColorHat. All Rights Reserved.

What's In A Name?

(May 12, 1999) With over 1350 websites and companies using the word "career" in their name, it's a bewildering mess for job hunters and recruiters alike. While we still haven't seen CareerBordello or CareerGinMill, the rest of the analogies are wearing thin. With Careerbabe, Careerbs, Careercafe, Careerchamps, Careercave, Careerconcierge, CareerDoctors leading the cluster, it's amazing that any brand distinction exists in our space.

In a fit of silliness, we decided to actually look up the definition of the word Career:

  1. progress or development of a person through life or some aspect of life:
    example: a long and fruitful career.
    synonyms:development, progression, course, march, road, movement, journey, trip, trek, progress, way, direction

  2. a profession or occupation chosen as a life's work.
    synonyms: profession, occupation, vocation, trade, business, calling, pursuit, craft, métier, job, living, livelihood

  3. swift movement forward:
    example: the horse's furious career toward the cliff.
    synonyms: movement, progress, course, progression

Astonishingly, none of the dictionary definitions of the word career seem to mean "large database of job openings" or "job advertisement distribution system". They all imply development and personal improvement, however.

We wonder whether the job hunters who visit the various Careerxxxx sites experience an initial disappointment. Since the word career used to at least infer planning, training or constant personal improvement, some form of language deflation is happening here. If the word Career now means job listings, what word are we using to describe the intentional movement forward within a chosen field?

CareerBuilder finally opened on the NASDAQ today. If you want to follow the progress of the CareerBuilder IPO, Yahoo offers a nice constantly refreshed stock price window. If you use another source, the symbol is CBDR. The offering was initially priced at $13. Congratulations are in order for the CareerBuilder team. Getting this far in the game is quite an accomplishment.

- John Sumser, © TwoColorHat. All Rights Reserved.

Whose Business

(May 11, 1999) "Our Customers are On-Line, Not In-Line." So goes the tagline for the Team PA Career Link, Pennsylvania's new Job Board. Complete with a picture of the Governor (after all, every one knows that job boards are good for elections), the job service is in the news for its assistance with the transitions of a group of laid off workers. It's a service of the state.

We wonder if Job Boards aren't really a basic government function. After all, there doesn't seem to be a strong reaction from any of the competing services to the rapid proliferation of government sponsored Recruiting sites. America's Job Board is so deep into our industry that they have a high profile PR firm on their team. Maybe, just maybe, job boards could all be delivered by government agencies. Certainly, given their price point (free), the distribution services are going to start dumping job postings into these widely dispersed regional databases.

We ask the rhetorical question because by the end of the day, lots of perceptions of the value of our industry are going to be changed. All eyes are on the CareerBuilder IPO. The closing price of CareerBuilder's first trading day will set a huge range of future expectations. At least some governors are going to look at their state Job Boards and consider taking them public. Most of the entrepreneurs who tirelessly run their small scale reasonably profitable job services will have a new way to calculate their net worth. If the stock price explodes, deal making in our industry will hit a fevered pitch.

We always bet conservatively on these things. Convinced, as we are, that the current frenzy is a blip in the ultimate future of the net, we tend to have a bearish outlook on new stock issues. Given the last 18 months of activity, it means that we're wrong... a lot. While we're rooting for the people at CareerBuilder (we like them and hope they get rich today), our money is on a modest performance at best. In our sector, basic services are given away by the government. While there are a few bright spots in the pricing spectrum (LeadersOnline, for instance) most of the players are already working at near commodity pricing. Until we can clearly articulate the reasons that this isn't a government business, we think stock issues are somewhat suspect.

If we're wrong, the next couple of days will provide a delicious opportunity to rethink things.

- John Sumser, © TwoColorHat. All Rights Reserved.

Piracy Is Your Friend

(May 10, 1999) Jaron Lanier is an unlikely poster child. Sometime composer, inventor of the first wave of Virtual Reality interface and general Renaissance man, Lanier sports nearly waist length dreadlocks. Often quoted in Forbes, Wired, Civilization and The Sciences, Lanier is a powerful, if lesser known, influence on the long term development of the Internet.

Yesterday's New York Times featured a "manifesto" developed as a part of Lanier's moves to alter the commercial space currently occupied by giant Recording Companies. The manifesto, part of a larger move to organize musicians, makes the seemingly radical claim that giving away music is a good strategy for making money from an audience.

But face it, if your music wasn't available for free in some form, no one would have a chance hear it in order to decide to buy it in the first place. The old form of "free" music was radio (which is often taped by pirates, by the way) and MTV, but eventually the Internet is going to take over everything. There will still be TV and Radio, but they'll be implemented digitally. Give it ten years.

When that happens, the idea of not giving away music for free will be exactly the same thing as never promoting music at all.

The real question should NOT be "How can I put my fans in a straightjacket to keep them from hearing my music for free?" It should be "How can I best make money from my fans?". Those are two very different questions.

The music industry is already awash with success stories. Musicians have found ways to get around the label system to develop and promote their own creative endeavors. They have found, generally, that smaller audiences can be more financially rewarding if approached correctly. The key, it turns out, is returning to the basics of the fan-musician relationship.

Lanier's idea is not new. The Grateful Dead built an extraordinary business by encouraging their fans to tape concerts and trade the tapes. Rather than seeing it as "piracy" (as the rest of the music industry continues to see it), the band saw clearly that the fans were the thing.

Recruiting will undergo a seemingly similar radicalization. As labor supplies continue to dwindle, old Recruiting models are dying on the vine. Recruiters, like all direct marketers, are going to have to increase the value that they give to potential candidates up front in the relationship. Historic views of Recruiting are based on a once in a millennium set of demographics...the Baby Boom.

We read, with quiet giggles, the PR of Online Recruiting firms who suggest that they are reaching passive candidates because a subset of their candidates use privacy protection. Anyone who has a resume in a database is an active candidate. "Real" passive candidates aren't looking. The changes in the Recruiting Industry will focus on this group which is much larger than the dwindling pools of active job seekers.

Like "free" music in the music business, attracting the passive candidate means giving them a real taste of the potential relationship. It means giving away things that look like they ought to cost money. It means building relationships that are extremely one sided in the beginning. Those relationships are so focused on the prospect that they feel like piracy at first.

- John Sumser, © TwoColorHat. All Rights Reserved.

What's Up?

(Spring, 1999) If you look back at the top of this page, you'll notice a couple of little changes. Our March '99 print newsletter is now available for downloading. The print newsletter has an interesting circulation and tends to get passed around a wide variety of offices. This issue features a detailed look at one company's complex web strategy and the person behind it. It also covers some useful sites, a range of people finding tools, marketing tips, our current Top 100 Recruiting sites, and the usual tidbits.

Along the road to publishing this edition of the print newsletter, we've undergone some changes here at IBN.

After two solid years of bouncing around the North American continent delivering classroom seminars, a couple of simple things dawned on us. First of all, it became increasingly clear that many job boards were going to be delivering free seminars as a part of their marketing strategy. It's a natural and important evolution. Internet Recruiting tools currently require a heavy dose of education before customers can effectively use them. Secondly, it became clear to us that classrooms are not effective in delivering the sorts of advanced techniques that we've pioneered.

As a result, we've split our training product line into two separate components. For the past couple of months, you've probably noticed the piece at the bottom of this page offering our onsite individualized training. By focusing on the specific needs of a specific company, we've been able to leave our customers glowing, effective and ready to move full tilt into the online recruiting game. We're convinced that this customized approach is a necessary part of building a solid online recruiting team. With a dozen, of these engagements under our belts, we can assure you that our customers end up extremely satisfied.

In the print newsletter, we're announcing the second part of our training initiative. Seminar In A Box, our CD based training program, will begin shipping on June 1, 1999. The idea is simple. Rather than taking a full day out of the workplace to digest relatively foreign ideas, we're building a day long training program that can be constantly reviewed by all of the people in an office. The courseware is built around our day long Advanced Searching and Sourcing Techniques seminar and includes video, text, testing and a completion certificate.

We are convinced that solid Electronic Recruiting can only happen in a work environment that shares a base level of competence. With a CD based training program, the workforce can be trained during slack hours. Because the material is reusable and repeatable, it's now possible to create a solid foundation of expertise within a company. We're proud of the fact that we're the first (as usual) to use the technology to reduce costs, increase benefits and further expand the capabilities of our customers.

We're offering the course at $295 for prepublication orders (through June 1, 1999). After that point, the package will sell for $395. Given the fact that similar seminars, held in hotel classrooms away from the workplace, retail for $995 per person (and more), we're sure that you'll agree that the offering is a bargain.

You can learn more about Seminar in a Box and get a copy of the order form by downloading the print newsletter. It's a great way to bring your entire office up the learning curve.

- John Sumser, © TwoColorHat. All Rights Reserved.

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