In Wide-ranging Q&A, Monster CEO Calls Social Media Debate “Waste of Energy”

Jan 31, 2011
This article is part of a series called Financial.

Friday was a tough day for the world’s stock markets. Rattled by the events in Egypt, investors worried that the upheaval there could worsen, even spread, and the uncertainty lead to a sell off that drove the Dow down 167 points.

As big a number as that it is, it represents only a 1.39 percent decline.

Monster Worldwide, however, took a 25 percent beating from its closing stock price on Thursday. Today, Monster is improving more than the market as a whole. The stock was up 3.76 percent at midday to $16.55.

Part of the reason was Monster’s financial results for the last quarter of 2010. The company reported that it earned a profit in line with analysts’ estimates. But its revenue came in lower than estimates and both revenue and the dollar value of contracts signed during the quarter were at the low end of what the company had predicted a few months ago.

Meanwhile, LinkedIn filed for an IPO Thursday, its registration statement confirming that it was building its business on recruitment advertising.

It was almost a perfect storm, with the financial results and the IPO announcement coming amidst the growing social media buzz. From the Wall Street Journal to CNBC, and even among bloggers outside the U.S., the talk is that job boards are on the same slope that newspapers were in the 1990s. Newspaper recruitment advertising peaked in 2000, dropping from $8.7 billion then to $786 million in 2009.

Social media, say many analysts, and, frankly, many recruiting leaders, too, is already causing some companies to reallocate dollars from job boards to social sites like LinkedIn, Twitter, and Facebook.

The CNBC video has an on-screen headline that bluntly asks: “Will social networking sites be Monster Worldwide’s downfall?”

The site did a follow-up to the initial report in which Monster CEO Sal Iannuzzi says, “Networking has always been a useful means of connecting people. And it should continue to be.” In the blog post, Iannuzzi told CNBC many of the same things he said during the Thursday analyst call.

And in an email Q&A, sent before Monster’s Thursday financial reports were out, Iannuzzi told me that the issue is really how to help employers source and hire the best candidates:

“The media loves to pit ‘social’ against ‘job boards’ as if it’s a Roman gladiator event. ‘Are job boards dead?’ This discussion is actually a waste of energy; it’s not focused on the right questions. The question is not, what’s our social strategy? What matters most is: ‘How can employers most efficiently source, reach, and attract the most relevant talent from across multiple sources?’ And doing it repeatedly, with increasing scale as the economy improves and the war for talent heats up again.”

Iannuzzi even more strongly defended the commercial career site industry during the quarterly conference call with analysts Thursday. “False statements are made,” he said, referring to unnamed media reports.

Sal Iannuzzi

In his Q&A with me, Iannuzzi was equally direct in answering a question about whether LinkedIn represented a new model for the traditional job board industry.

“Some media sources are citing increased use of LinkedIn by major employers and then claiming that this tactic is at our expense. ‘Social,’ or LinkedIn specifically, and Monster is not a zero sum game,” he said in his written response.

The world’s other biggest job board, CareerBuilder, hasn’t said much itself about the potential of impact of social media. But it is clearly keeping an eye on the trends.

At a 2009 presentation to a conference of analysts and others, CareerBuilder CEO Matt Ferguson called social media the “biggest threat and the biggest opportunity.” LinkedIn, then aggressively pursuing recruiting business, may present the most direct challenge, he said, but “social media in aggregate” was a worry.

If he has said anything since, I haven’t seen it. However, CareerBuilder’s recruitment communications consulting arm, Personified, has an active practice that includes social media.

Monster hasn’t gone in that direction. And in his responses, Iannuzzi seems to be saying the company will hold the course. “We’ll continue to find the best ways to match the right candidate to the right job, on Monster, off Monster and with tools and technology not available anywhere else,” Iannuzzi wrote in response to question about the LinkedIn business model.

The opportunity to pose a few questions to the CEO was extended on Tuesday. They were sent the same day. The responses came back Friday morning, the day after the financial reports. My six questions covered several areas, including the company’s 6Sense search technology, its plans for the huge newspaper network it got from the HotJobs acquisition, and the impact of social media. Monster, at my invitation, added a question of its own about the highlights of its business plan.

Here are the questions and answers as I got them:

Q1: (company question.) Monster reported strong Q4 earnings. Anyone that has followed Monster over the past year is aware that you are moving fast on all fronts. Can you share some of the highlights from your business plan?

A: Our innovation strategy and global expansion plans are paying off. We made a commitment to innovation three years ago and didn’t waver during the recession. Now, as the recovery is starting to occur, we are in an excellent position to help employers win the war for talent. What was needed that no one was addressing was a better way to reach and identify the right talent, faster and more easily. Now we are reaping the benefits of that promise to innovate. Our 6Sense products have proven that better search will transform recruiting, and in the course of a few months that technology alone accounts for over 50 percent of our search product sales. We’ve extended our reach through the acquisition of Yahoo! HotJobs. Our global footprint has been a significant driver of our growth and a competitive differentiator for large enterprise customers looking for a global talent management plan. Whether it is leadership in markets like Germany (where the economy is very healthy) or China, or even our recent entry into Brazil (one of the world’s fastest growing economies), we are poised to take advantage of a vibrant global economy. Our success in 2010 will fuel our momentum in 2011 and we’ll continue to innovate and invest in this winning strategy.

Q2. We hear a lot about how social media recruiting has been the buzz among recruiters for the last few years. It gains new participants every day. What role do you see Monster playing in social media? How do you see Monster leveraging social media principles to help recruiters find better candidates?

A: The media loves to pit “social” against “job boards” as if it’s a Roman gladiator event. “Are job boards dead?” This discussion is actually a waste of energy; it’s not focused on the right questions. The question is not, what’s our social strategy? What matters most is: “How can employers most efficiently source, reach and attract the most relevant talent from across multiple sources?” And doing it repeatedly, with increasing scale as the economy improves and the war for talent heats up again.

We’ve invested in innovation that addresses these questions and has taken us far beyond our roots as a “job board.” Two notable examples are our 6Sense-powered semantic search products that can precisely filter and present the best matches from any source, and our Career Ad Network that reaches passive seekers with your opportunities all across the Internet. There’s a place for “social” in recruiting, and for networking, just as there always has been. Seekers will ask their friends for advice and recruiters will mine their contact lists and ask their colleagues for leads. But we’re focused on the part of the recruiting equation that customers have been clamoring for — finding the right candidate for the right job, with efficiency and precision.

Q3. Do you see LinkedIn becoming the model for what future career sites will look like? It began as purely a business networking site, but as it adds more job seeker features and more recruiter services, LinkedIn clearly is beginning to look like a sort of job board/social media hybrid. Where do you see this leading and how will Monster respond?

A: LinkedIn is an online platform that’s part virtual Rolodex, part office water cooler, and part personal branding tool. Networking, including via a new model such as LinkedIn, has always been a component of a job search and candidate lead generation approach. And it should continue to be. We operate completely different businesses. Some media sources are citing increased use of LinkedIn by major employers and then claiming that this tactic is at our expense. “Social,” or LinkedIn specifically, and Monster is not a zero sum game. In fact, while client confidentiality prevents me from being more specific, what I can say is that our business with all three of the companies mentioned in a story as recently as yesterday is up over 2009; in two cases, up 85% and 167%, on multimillion-dollar contracts. As for the fascination with the so-called “passive” candidates on LinkedIn: it is well understood that recruiters are actively contacting people on LinkedIn, so guess what? People actively looking for jobs are posting profiles, increasing their visibility. They are, by definition, active. If you really want to reach passive candidates, the best way to do so is when they aren’t on career sites at all  That’s why we’ve built our Career Ad Network to reach people all over the Internet based on their habits and interests. This network reaches a third of all Internet users when they’re not even thinking about jobs. So will we model our business after LinkedIn?  No. We’ll continue to find the best ways to match the right candidate to the right job, on Monster, off Monster and with tools and technology not available anywhere else.

Q4. 6Sense Search for talent matching has gotten excellent reviews. Using the technology, Monster has been improving search results for both job seekers and recruiters. In many ways, Monster and Google (and other search engines) are in hot pursuit of the same end: quality search results that intuit what the user wants even when the queries are imperfectly formed. What’s next for 6Sense? What products or refinements do you have in the pipeline?

A: We developed 6Sense search technology initially to help employers find the most precise talent matches among the most possibilities from the millions of resumes on Monster or within folders of applicants to a company’s job posting. Now, we’re working with a group of enterprise customers to develop a cloud-based application of the technology so they can search their own talent databases, including their own employee talent. This will provide unprecedented ability to see patterns, anticipate needs, and inform talent strategy. Semantic search will continue to be the cornerstone in our broader strategy to bring increased efficiency, transform the recruiting process and grow our business. We will be rolling this new product out this year and are confident that this can radically alter the talent acquisition and management business.

Q5. With the acquisition of HotJobs Monster now has the largest newspaper network of any online careers site. What are you going to do with it? What role do you see the newspapers playing in Monster’s future?

A: The newspaper consortium we gained through our HotJobs acquisition is a huge asset for our customers. No need to write an obituary for newspapers, which have innovated into digital sources in their local markets. Monster now has a network of over 1,000 daily and weekly newspaper co-branded relationships which enables us to offer localized access and relevance to employers and job seekers alike. Each relationship brings together a trusted local media source with the online recruitment advertising market leader. Our newspaper relationships are a key component of our larger recruitment offering.

Q6. The new Dot Jobs Universe launched a few weeks ago with a promise of hitting 100,000 sites by the end of the year. Where do you see this leading? Do you expect jobseekers will find their way to sites on the .jobs domain? How will this impact Monster?

A: We have no objection to companies building their own career sites and engaging with job seekers off Monster. In fact, we build online sites for our customers to help them attract talent, and our Career Ad Network recruitment media solution can drive people right to company career sites. At the very time job seekers need the most help finding jobs, the last thing they need is tens of thousands of additional job boards. Proliferation of untargeted job listings is just going to confuse the job seekers you are trying to reach. Having a new Internet suffix of .jobs versus .com is not a magic bullet in attracting an audience of qualified job seekers. There are already at least 10,000 job boards out there and thousands more sites on which to list jobs is the answer to the wrong question. The better question is how to precisely target, attract, and evaluate talent, quickly. Also, a singular entity’s control and operation of essentially all of the .jobs domains is a blatant violation of the rules established by the Internet Corporation for Assigned Names and Numbers, or ICANN, which is the non-profit organization that oversees how Internet names are authorized. We think it’s likely that ICANN will shut down the Dot Jobs Universe as completely outside the scope of what the original intent of the .jobs domain was.

Q7. Take a look at your crystal ball for a moment. What do you think the Monster of 2015 will be like?

A: We never stand still. On the other hand, our values and focus never change. So we’ll be expanding on the pillars we’ve been building over the past couple of years. The world will continue to flatten and borders will blur as companies think and operate globally in their search for talent and how they organize their workforce to be ever more agile and competitive. We’re already the most global player in the online recruitment industry, and we’ll continue to build our global footprint and capabilities. We’ll be a strategic human capital partner with many of our customers, as they are able to apply our 6Sense search technology to their workforce planning and talent management priorities. And in 2015 our mission will be the same as it is now: we’ll continue to help employers gain a competitive advantage by finding the right talent for the right jobs, and we’ll be inspiring job seekers to improve their lives through the world of work.

This article is part of a series called Financial.
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