A New Industry
When we look at the impact of the internet and the World Wide Web we tend to look at the most obvious effects and relics such as travel agents, books and the music industry. However one of the most overlooked impacts of web technology we have seen in the last 20 years is the rise of Employment Websites, or JOBSITES. Like many entities slowly eroded and morphed by the internet, we have almost forgotten a time when jobs were attained through newspaper ads, headhunters and good ol’ fashioned door knocking. In the mid 90’s as the internet began to grow and expand from information sources to commerce, practical employment sites were established and the work force was changed forever. Suddenly jobs could be viewed and applied for from anywhere in the country; and soon walls came down around international recruiting as well.
But like all early internet ventures, what began as a practical and global solution soon became an opportunity for business and the proprietary jobsites sprouted all around. Many sites were created, universities and companies began to create internal systems which grew out, and software boomed as sites like CareerPath, JobsOnline, Monster and HotJobs grew without limit. By early 2000, through mergers, buyouts and outright failures, a handful of major players survived including: JobsOnline, Monster.com, HotJobs and CareerBuilder. HotJobs, though only the third largest was declared the most favorable and user friendly and by 2002 was acquired by the Internet Giant – Yahoo! for almost half a billion dollars.
A new industry had been formed, and from 2003 to 2010 the industry grew into massive empires. Online job sourcing had become the standard in recruitment, job seeking and HR practices. Exciting and hungry, startups such as Indeed and Beyond.com were challenging the status Quo, and a previously underestimated social networking site called LinkedIn began eating away at memberships and profit margins by undermining jobsites with direct employer connections.
In 2010 Yahoo was looking to unload HotJobs like an albatross, and sold the once hefty contender to its primary competitor, Monster.com, for just over half of what they had paid for it just 8 years prior.
What had happened? How did a company which contributed to the growth of a new sector fall so far to eventual failure? The reason will be discussed with the definition of employment websites, how they have evolved, their impact on the workforce and why HotJobs was ultimately unable to ride the same wave it and its competitors had created.
The Story of Employment Websites?
The story of HotJobs is indivisible from the story of Employment Websites. Just as a general’s narrative is woven into the chronicle of a war, so too is that of a company whose involvement was a large contributor to the boom-phase of a new internet industry.
In 1994 NetStart Inc. began as software sold to companies for listing job openings on their Web sites and manage the incoming e-mails those listings generated. After an influx of two million dollars in investment capital the company changed its name to Career Builder with a new mission. (CareerBuilder) Just a year later 6 major newspapers joined forces in 1995 and transition their job listings to an online source engine they called CareerPath.com and featured help-wanted listings from the Los Angeles Times, the Boston Globe, Chicago Tribune, the New York Times, San Jose Mercury News and the Washington Post. (Sanchez)
In 1994 software designers combined technology from their internal system belonging to a Human resources company called Adion with jobs from regional newspaper listings and created the The Monster Job Board. After getting permission from the employers, The Monster Job Board became the first public resume database and online job board. A company called TMP acquired Adion and the company grew and eventually went public in December 1996, with its shares traded on Nasdaq under the symbol “TMPW”. In 1998 TNP had acquired a majority of online public job boards and by 1999 became the largest online jobsite changing its name to Monster.com in 1999. (Buss)
HotJobs was founded in 1996 by Richard Johnson who operated the site out of his New York City Apartment; he began the site for technical jobs only. Expanding his team the company posted their first ads on Yahoo in 1997 and from there they began to experiment with different technologies for job posting and search engine tools.
HotJobs was receiving praise in 1997 for focusing on niche markets and adding to their technology-only focus with job categories for "Finance/Accounting" and "Sales/Marketing."
HotJobs jumped onto the map with new and innovative marketing campaigns in 1998 and increased membership with more internal tools and new ad initiatives such as the controversial Super bowl ads in 1999.
Around this time CareerBuilder absorbed competitor boards CareerPath.com and then Headhunter.net which had already acquired CareerMosaic. The name if the game had become mergers and acquisitions but in 99’ CareerBuilder still trailed behind Monster.com and Hotjobs.com. (comScore)
In 2000 Monster acquired JOBTRAK, which at the time had partnerships with more than 1,500 college and university career centers. In a brilliant move Monster rebranded JOBTRAK as MonsterTRAK and began to acquire college job seekers.
In the same year HotJobs had grown to $100 million dollars in revenue. The company expanded into the enterprise market by purchasing the distressed resume processing company Resumix, Inc. The acquisition boosted HotJobs already unique aspects of resume assistance and storage and in 2001 the company became profitable and cash flow was positive.
Yahoo! purchased HotJobs through an unsolicited bid in 2002, for $436 million, undercutting efforts by Monster Worldwide, owners of Monster.com, to acquire the company. “Monster.com made a move in 2001 to purchase Hotjobs.com for $374 million in stock, but was unsuccessful due to Yahoo's unsolicited cash and stock bid... Yahoo had previously announced plans to enter the job board business, but decided to jump start that venture by purchasing the established brand.” (Buss)
Even though HotJobs lives on for 8 more years, their story really ends in 2002 with their acquisition. In those 8 years Monster would go on to acquire more job boards, resume builders and overhaul its structure by forging out new technologies and internal systems. Career Builder moves onto dominant partnerships and creates a powerful infrastructure to assist the job seeker. New players like Indeed and LinkedIn allow jobseekers to circumnavigate the boards themselves and search on a broader scale. By 2010 “Indeed.com slipped past Monster.com to become the largest job site in the U.S. According to ComScore, 12.3 million people visited Indeed in October, up 19.6 percent. Monster.com attracted 12.1 million people, and CareerBuilder.com came in third with 11.3 million job seekers. It is still pretty close, with Indeed just barely edging out Monster…
…Indeed passed Monster in page views [in 2009], and currently gets an estimated 334 million page views a month, compared to 311 million for CareerBuilder and 205 million for Monster. And since most of those page views are pure job search, Indeed boasts more job search page views (305 million) than the other two combined, plus HotJobs search page views (299 million total for all three). The number of visitors to HotJobs.com is down 67 percent from [2008 to 2009].” (Schonfeld)
The end draws near as Monster purchases HotJobs from Yahoo in 2011 for a hemorrhaging 236 million, a move which is lauded by experts as another mediocre business deal from Yahoo.
“The two companies also signed a traffic agreement stating that Monster will supply all career and job content to the Yahoo homepage in the United States and Canada for a period of three years. Monster will have a chance to negotiate similar traffic deals with other global Yahoo properties once the acquisition is complete. According to a Monster.com announcement, the deal [was] expected to be finalized sometime within the third quarter of 2010.
By adding to its database, Monster.com should be able to help employers and job seekers to find more diverse employment opportunities, while bringing Monster some fresh traffic. Meanwhile, there’s no shortage of competing employment sites for job-seekers to scour, including CareerBuilder.com, which says it has more job listings than any other site.” (Barbierri)
Monster attempts to integrate their systems by transitioning users and integrating resume building techniques. Monster even sports a section called “Monster+HotJobs” for former accounts, but the final nail is driven into the coffin when in 2011 Monster fully absorbed HotJobs and discontinued the service.
There is one theme which permeates through each company’s story – Innovate and Acquire or Die.
Many experts site Yahoo as the reason for the utter evaporation of the once mighty HotJobs. Yahoo’s narrative arc as a company can be defined by its acquisitions, which taken together also serve as one take on the history of the web itself. In the Yahoo version of that history, founders and backers of overvalued companies enjoy huge exits while the buyer tends to learn too late that its exuberance was irrational. Yahoo CEO Marissa Mayer will soon find out whether her company’s $1.1 billion purchase of Tumblr becomes the latest chapter in a saga littered with mediocrity and failure” (Wohlsen)
While “The Yahoo Effect” is a factor there are lynch points throughout HotJob’s history which point to their demises; epidemic behaviors which at the time seemed meaningless but eventually proved fatal.
In early phases HotJobs, while prevailing in Innovation, failed in Acquisitions. During the 90’s HotJobs worked to develop a superior product. Although they were never the largest they were successful as they were declared “Most Job Seeker Friendly” by recruiters and job seekers. (Weddles) Hot Jobs possesses unique resume builders, search engines and competitive rates.
Monster and Career builder worked to identify successful job board sites and acquire them, absorbing their users and employer accounts. User accounts are where jobsites make their money! HotJobs could have had links which instantly granted jobs to users, but without users to know about it the tools fall flat.
If a job appears in the forest and no one hears it because they belong to Monster.com, no one applies and the employer moves their business to monster.com.
These early acquirements from Monster and Career Builder allowed the two competitors to build bigger, more accessible job boards. One such acquisition from monster.com stands out and can be credited with their success today. When monster.com acquired and rebranded JOBTRAK as MonsterTRAK and began to acquire college job seekers, they secured a whole new generation of monster.com users for years to come. HotJobs, on the other hand, made very few acquisitions in the 90’s choosing instead to invest in marketing and system tools.
Move to 2000-2001 when Owner and CEO Richard Johns departed and COO Dmitri Boylan is appointed – Innovation stops. For years the company hopes to ride the coat tails of yahoo as means of customer acquisition and fails because users are flocking to Google, LinkedIn and other less Ad-cluttered networks. The decline of Yahoo! is another story.
As the new millennium begins Monster and Career Builder use their massive infrastructures, built on the acquired human capital and tech resources, to innovate new tools and social components. HotJobs, crippled by its own take-over, consisted of a third of the users on Monster, aging tools and is plagued by the “Yahoo Effect.” Now HotJobs is unable to innovate, unable to grow in a millennial world and becomes dead weight for Yahoo.
Good companies don’t fail – They pivot. HotJobs was not able to balance its growth in the 90’s with acquisition and innovation. Seeing what their competitors were doing they chose not to pivot their course but remain in one direction.
Companies must adapt to stay alive. “The second you are comfortable, you’re dead”
HotJobs grew conformable in 2002 when they had established profitability and access to one of the world largest email communities. However, they failed to capitalize on their resources.
They failed to see the trends of powerful social networks, search aggregates and new tech. They became obsolete in world where technology can be outmoded in a matter of days.
HotJobs was sitting on happy users, pioneering tech and an unlimited user-base. The very moment they decided that was enough was the very moment they failed.
Innovate or Die
“I saw the internet and wrote a book and made 80,000 dollars, Yahoo saw the internet and created a search engine and made millions”
HotJobs was a part of a new movement, a new million dollar industry. They were not only a part of the industry; they were a pioneer in it. They shaped the sector and defined it; but in the end they failed to keep up with it.
When competitors were acquiring fledgling companies, HotJobs was innovating. When there was no one left for HotJobs to acquire, they sat while competitors innovated. When the Millennium came HotJobs was outmatched and outclassed.
They failed to see the true potential of everything they had helped create.