While the blogosphere’s been having a philosophical orgasm pontificating (P.O.P) between the merits - and future odds of success - of LinkedIn and Facebook, I think a better question is: who will win between LinkedIn and TheLadders.
For the record, I am guilty of that P.O.P myself… but let’s take a step back and examine the two firms that we think are closer comparables: TheLadders and LinkedIn. Admittedly, TheLadders is more of a traditional job board whereas LinkedIn is a professional network, but they target a similar audience.
What is TheLadders?
We are the world’s largest community catering exclusively to the $100k+ job market.
TheLadders.com offers online job search resources and content for the $100k+ job seekers and recruiters. Our specialized job search engines are an invaluable asset to top-earning job seekers in Sales, Marketing, Finance, Human Resources, Law, Technology, Operations, and all other $100k+ fields.
I’d say the audience is even more high-end and upscale than LinkedIn’s, since many junior employees turn to LinkedIn as well. Both companies seem to be doing well. LinkedIn seems more advanced in terms of revenues and it has been eyeing an IPO in 2008.
Of course, being based on the West Coast and founded by uber-networker Reid Hoffman (who rejected my LinkedIn invite… what does that say?), LinkedIn is getting a lot more media and blogger love, but TheLadders does seem to have a far more vertical appeal. Moreover, being based in New York City, I’d say it’s more corporate in nature whereas LinkedIn seems to be lacking profiles in more traditional fields like corporate marketing and finance gigs… In other words, LinkedIn might be the place to turn to for startups, new media and technology outfits, whereas TheLadders would have more traditional business and gigs.
In fact:
Headquartered in New York, TheLadders.com, Inc. is a privately held company offering online recruiting resources to recruiters and job seekers in the $100k+ employment market. Ex-HotJobs.com executive Marc Cenedella founded TheLadders.com in 2003 to address the unique job seeking and recruiting requirements in this underserved market sector. Investors in TheLadders.com include leading venture capital firm Matrix Partners and prominent private investors such as Kevin Ryan, former CEO, DoubleClick; Tom Matlack, Megunticook Management; and Robert Chefitz, NJTC Venture Fund.
I don’t know which company will prove to be more successful, obviously LinkedIn casts a far wider net, but that might prove to be one reason an exit is more obvious for TheLadders, whose business model is - like LinkedIn’s - powered through subscriptions:
Motivated job seekers pay $30 per month to access hand-picked $100k+ postings in their field of specialty; thus streamlining their job search. Employers, meanwhile, post openings at no charge, and are able to reach highly-qualified applicants more easily. TheLadders.com’s fee to job seekers discourages unqualified candidates, while at the same time building a loyal community of serious $100k+ job seekers.
The following is not a knock at either company, but rather a commentary of the state of investors’ moods and appetites: both companies lack a really strong online advertising revenue strategy: LinkedIn generates some ad revenue, Ladders, I presume, absolutely none. That reality means that LinkedIn will have some difficulty getting public investors really excited because investors are advertising-revenue-obsessed. Will it kill its IPO prospects? No. Will it affect it? Yes.
As per TheLadders, it’s probably way too premature to be thinking IPO, but I think an acquisition is very likely and probably. Companies that might be interested include the usual suspects (some of these, obviously, would also look to LinkedIn, but LinkedIn might be too pricey for some of the buyers given its low exposure to online advertising revenue):
- Yahoo! (who could mesh it well with Hotjobs and cover the other end of the professional spectrum after it launched a social network for college students to answer to Facebook rejecting its offer).
- Interactive Corp. has a myriad of businesses and either site would be a good fit, though again, Barry Diller is not a fan of overpaying for assets…
- New York Times is actually pretty strong online, especially for a traditional newspaper company. As it sees its classifieds business getting decimated by Craig “Pol Pot” Newmark (in the eyes of news barrons, of course, we personally love Craig) both online and offline, something like TheLadders (or LinkedIn for that matter) would be a solid fit. In the same vein, Washington Post, Gannett also would be in the running.
- eBay or Amazon, both leaders in commerce and communities could easily see either site as an additional asset in their broader product line in the sense that it extends their product assortment into the lucrative job category.
- Monster, with a $4B market cap is clearly a strong fit…
- Salesforce.com, with a $5B market cap, would be an envelope-pushing, strategic buyer. It’s sounds odd, but hey, that’s why Mergers and Acquisitions gurus are paid the big bucks, right?
- In the same vein, MSFT should not be counted out, because it would give it a database of all “professionals that matter” - this would be cheaper than (forgive me for going there) Facebook but the user base it acquires is far more strategic and important to it defending its software business… and while either deal do little to meet their desire to bolster their online advertising business, who cares?
- Google is the least likely of buyers, but with +$10B in cash, the days of “we build from within” are long over. Google has bought YouTube (despite Google Video), Doubleclick, Feedburner etc. to get into markets fast… and in fact, as I write this, I realize this would be a smart hedge for Google which commands 99.9% of its revenue from online advertising in general and text links in specific. Of course, while we’re at it, Google might also look at Inside and SimplyHired. Jobster, too, comes to mind… despite some HR issues that popped up last year.
There are also many B2B information reselling companies, such as Thomson that could include TheLadders in its repertoire of legal and business information services.
Lastly, let’s not forget companies like GE’s NBC and News Corp. who will always want to get a call from bankers when digital assets are up for grabs.
With news of Facebook considering raising a mammoth round, and LinkedIn founder Reid Hoffman being an investor in Facebook, naturally a buyout of LinkedIn by Facebook is not out of the realm of possibility.
All to say, yes, we included practically everyone… but you can see that this market, too, is headed for consolidation over the next quarter and years.
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