Greenberg: Monster CEO Fires Back
In a piece here earlier this week, I asked the question: Is social networking doing to Monster what Monster did to newspapers?
That’s especially relevant in light of LinkedIn’s IPO filing—and the 21 percent drop in Monster’s stock price today after the company’s report late Thursday of disappointing results.
In its filing, LinkedIn said:
“Thousands of enterprises and professional organizations use our hiring solutions and marketing solutions. In 2010, our hiring solutions were used by nearly 3,900 companies, including 69 of the Fortune 100. Our customers also include many small- and medium-sized businesses using our platform to leverage their limited recruiting resources. In 2010, our marketing solutions were used by more than 33,000 customers. This broad customer base provides us with not only diversification but also market validation for additional new customers.”
In addition, as I originally reported:
- Accenture’s comment to us that over the next few years it expects 40 percent of its hiring to come from social networking.
- Swiss staffing giant Adecco saying at an investor conference last year that it was reducing its reliance on job boards and redirecting some of its resources toward the likes of LinkedIn.
But my comments didn’t go unnoticed by Monster CEO Sal Iannuzzi, who told investors yesterday on the company's earnings call:
“In one of these articles that recently appeared, and this was in the past couple of days, one of the companies mentioned that they were cutting back, and this is the second time or the third time that someone was quoted from that company, and this was a large—a very large consulting firm. Okay, now, I won't mention the name because it's inappropriate for me to use the name of a customer. We have a policy we just don't do that.
“But someone from that customer—have no idea what level they are or where they reside within that company—said that they were reducing the amount of business they were doing with Monster and other job boards. Earlier in the year, they came out and said that they were no longer using Monster or other job boards.
“For the record, I can't talk about when people say things in a vague way, but I can talk about them in a very specific way. That company has increased their activity with Monster over the past year by 87 percent. So, where this noise comes from and what drives it, so people can have quotes, either for their reports to prove a point and make it up, I don't know. But the reality is what I just said. They're all—their spend with Monster, and this is a big customer, is up 85 percent.
“Secondly, another company, this is a major—one of the biggest, if not the biggest, staffing companies in the world, indicated earlier in the year, and it was re-reported a couple of days ago, that they were pulling back and going to different either professional media sites or social media sites to do their recruitment, and indicated that their spend and reliance on job boards, if Monster indeed is considered a job board, was being diminished.
“That same company increased their spend with us last year by over 150 percent.”
That may be the case, but those companies have also made it clear that the use of social media is expected to play a big role in its future recruiting.
In response to our question, Monster issued this statement today to CNBC:
“Networking has always been a useful means of connecting people. And it should continue to be."
“We operate a completely different business from LinkedIn, and don’t see them impacting our business in a meaningful way. The facts tell the story."
“Our business is up 40 percent sequentially and we are seeing growth among existing and new customers."
“People need to understand that social media and Monster is not a zero sum game. In fact, two of the three companies mentioned in a story this week as increasing their use of social media also increased their business with Monster by more than 85 percent over 2009 on multi-million dollar contracts. We see examples of this trend every day."
“Our innovation strategy and investments are working. Our 6Sense search products are bringing precision and speed to the war for talent. Our media products reach passive candidates all across the internet, whether they are looking for new opportunities or not. Our unique value proposition is reaching and matching the right candidate to the right job, on Monster or off Monster, with tools and technology not available anywhere else.”
My take: We’ll see how this plays out, but in the digital world, when change happens—as Monster proved to the newspaper industry—it happens faster than anybody could have imagined. Monster isn’t going away, but on the margin, at least, it would appear its growth could be at risk.
Questions? Comments? Write to HerbOnTheStreet@cnbc.com
Follow Herb on Twitter: @herbgreenberg
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