Monster.com for the past decade has often made a huge splash during Super Bowl week with their advertising campaigns. Today they upped the ante and made a $225 million splash by purchasing HotJobs from Yahoo.
We knew Yahoo was looking to unload HotJobs a couple months ago, and thought Monster would be one of several interested parties. Monster buying HotJobs is the equivalent of the New York Times buying some smaller newspapers to get more distribution. Newspapers are dying and so is the distribution channel.
If I were a Monster shareholder, I would be livid. Just like Monster killed newspapers job classifieds sections… social networking, job agregators, and applicant tracking systems are going to destroy Monster. If I were Monster and had $225 million to burn, here’s a few things I would have done instead:
1. Buy Kennexa. Kenexa’s market cap today was at $235 million because they had a disappointing quarter and outlook. But slap the Monster brand onto it, and all the sudden they can begin selling a robust applicant tracking system (ATS) to compete with Taleo and friends. This would help ensure that jobs are listed with Monster as they could promote specials between the job board and ATS.
2. Build a LinkedIn competitor. Stick $15-20 million into developing a superior product, then spend $200 million in advertising. Supposedly LinkedIn is looking at a $1 billion valuation. Wouldn’t you want to hedge your bet with a social marketing play?
3. Buy every Super Bowl ad. Monster usually gets 1 or 2 ads each year, and this year ad time is going for about $2.6 million per 30 seconds. I’m sure CBS would have given a slight discount of $225 million for 100 ads.
4. Create a new logo. Come on, look at that. Is that the professional image you want to see when you are posting an employment position?
5. Donate the money. How about some good press by a $10 million donation to 20 worthy causes? I know this would never happen, but if they are going to throw the money away, might as well get some social benefit for it.
Get ready for the “I told you so” posts coming over the next couple years.
UPDATE (2/4 at 2:30PM ET) - While the DOW is down almost 2% today, Monster is down over 16%.
February 5th, 2010 at 9:04 am
Great points. Monster needs better products. There way of doing things is dying a slow death. Look at what Jobs2Web is doing – these guys have cool products and they’re growing like crazy. Monster needs to invest in new technologies such as (1) and (2) on your list.