Staffing companies who’ve seen once hefty direct hire fees slip away to customers deciding to roll their own using job boards are almost certain to experience some level of schadenfreude at the sight of Monster’s stock crash this last week.
In case you missed it, Monster (MWW) missed its revenue expectations and investors pounced on it, lopping off almost 25% off the stock price and wiping out hundreds of millions of shareholder value.
Innovation Funk?
Ironically, the monster crash happened just as the company was pulling out of an innovation funk that has crippled it over the last five years.
Monster’s recently released 6Sense Power Search feature has been a hit with beta clients, dealing Career Builder a serious blow on the usability front. Its ChinaHR acquisition puts Monster in good stead for premium clients willing to handsomely reward those rare providers able to provide a truly global solution. Its Career Ad Network makes an aggressive play for passive candidates.
Finally, Monster CEO Salvatore Iannuzzi is following a tenacious BRIC strategy including a play in Brazil that should enjoy a long tail of revenues.
The Numbers
Add to that the fact that Monster has been making a profit during the glacial hiring of the recent recession and you have to wonder what was up with the stock crash. The usual bear commentary is that social media sites like LinkedIn, Craiglists and Facebook are going to eat Monster’s lunch and that walled gardens without a strong social play aren’t going to draw in the eyeballs necessary for future sales.
Those factors certainly are in play, but TempWorks clients however know there is a lot more going on than the current social networking frenzy. The reality is that even though Iannuzzi is doing many things right, Monster is still screwed.
With prices dropping precipitously on everything mobile and internet and in between, any entity dependent on connecting people for its multi-billion dollar market cap is on a collision course with history.
Summary
Iannuzzi is quoted as saying “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.” But what he forgets is behind many of those so-called job boards is an aggressive, local curator of jobs and candidates that do what Monster can’t do.
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yeah everyone and their mother has a content strategy…won’t replace job boards though…
if what you are saying were true, Dice wouldn’t have gone up 25%.
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http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_M/threadview?m=te&bn=18156&tid=29482&mid=29482&tof=2&frt=2#29482
Interestingly after all the layoffs and severance charges; salaries continue to climb at Monster over the last 5 quarters. In Monster financial parlance, these charges are referred to as “restructuring expenses for future development”. Perhaps the increase in salary is associated to the “Cambridge Brain Trust” that was hired to give Monster some whiz bang and create a new and slick market presence.
“6-Sense”, Monster’s “game changing technology”, is now a year old and was supposed to be the flagship product that set Monster apart from its competitors, yet profit margins are flat to negative. Sal has no more ability to alter the marketplaces willingness to pay more than he does to improve his own company’s well being, which is to say he hasn’t done either. Yes he can slash and burn expenses and employ cheap CEO tactics to show that he is worth his $1.5M plus in compensation. But it doesn’t alter the fact that “6-Sense” is not a game changer. It is more akin to a “game-extender”; 6-Sense improves Monster’s overall position within their defined world of online classified advertising and search, but is not a game changer. Where is the creativity and true entrepreneurial ability Monster needs?
The talent gene pool at Monster is stagnant and management ripe with nepotism. The newest outside additions to senior management come in the door and leave shortly after. Meaningful Management vacancies are filled by a limited number of veteran internals and former cronies who promote strict top down management strategy and survival by going along to get along. This deformity in the company’s leadership stagnates growth and deters real change even while those that drive this management style earn more in options and salary increases. Staff level talent is suppressed and seemingly viewed as a threat to the status quo and managed as a cost expenditure that can be substituted in cheaper ways. This is very ironic from a company that promotes the moral high ground when selling its own personnel philosophy to others but wouldn’t know the benefits from it even when if it is staring them right in the face.
Buying another company and fantasizing about “capturing” the online labor market is nothing more than overloading an already wayward ship with more cargo in hopes that the pay off will be even bigger, if it can only find the correct destination where someone will pay full price for their goods. More likely to happen is that HotJobs will further constrain the company’s ability to be nimble and agile and load it with more “yes” employees that will take a back seat to game-changing action in favor of pay. The company is overly focused on financial principles of profiting, which of itself is not a direction, just a prudent way to operate towards a direction.
Even as Sal routinely spends time wooing the suits on Wall Street while bemoaning short sellers for driving Monster stock price down, the company’s stock price is going nowhere fast! Monster seems to reflect Corporate Americana in the 21st century; personal success based on gaining Titles and friends and towing the party line. All this while Americans lose their jobs, companies outsource their workforce and replace Americans with cheaper foreign labor that comes to their door.
“Keep America Working”!
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