Thanks to Chris Russell of JobBoarders for organizing a really entertaining discussion yesterday on a variety of topics relating to the job board industry. Also participating were Joel Cheesman, Eric Shannon, and Joe Stubblebine.

During the conversation, I went off on a slight rant (not quite meds-worthy in my mind, but that might be up for debate) against TheLadders and the scam they are running that rips off unsuspecting job seekers and tarnishes the entire industry. TheLadders is doing nothing more than scraping jobs from other job boards, aggregating as many jobs as they can get in their database (flawed as that may be given all the legacy issues such as scam jobs, old,old,old jobs, work-at-home scams, and identity theft phishing jobs, etc. that jobs from sites like Monster and Careerbuilder and Hotjobs bring to the database), applying a shoddy filter against the listings to try to identify only $100,000 and up salaries, and then selling job seekers access to the resulting listings. It’s as bad as any scam I’ve seen or written about in the industry, equal in many ways to the criminal behavior of the Employment Guide and the postal ads they run in their thinning publications every week. Like others (here and here), I’d put them all in the same bucket and add serial spammer Hound.com as well.

The question from yesterday’s job boarders podcast that spurred the discussion was whether or not job sites should consider trying to generate new revenue streams from job seekers. We’ve never done this at either JobDig or LinkUp for a variety of reasons, but most fundamentally because that’s not our business. We’re in the advertising business, and we offer employers unique and valuable advertising vehicles to reach quality candidates for their open positions. I’m not sure what you’d call the business model of charging a subscription fee for recycled listings from other job boards, but it’s not a business I’d want to be in.

1) TechCrunch recently wrote about the worsening situation for daily newspapers and the abysmal 2nd quarter they have had.

2) The Economist reports that daily newspapers in emerging economies are thriving. As Thomas Barnett points out, the logic is that:

The demand for news tends to go up as people enter the workforce, earn more money, invest it and so begin to feel that they have more of a stake in their society. Literacy rates also rise in tandem with wealth. For the newly literate, flipping through a newspaper in public is a potent and satisfying symbol of achievement.

3) Gannett has acquired a majority stake in CareerBuilder by purchasing an additional 10% stake in the jobs classified company from Tribune. The $135 million that Gannett paid places a $1.3 billion valuation on the leading jobs classified company (I’d guess that the math and the actual valuation is probably more complicated than a simple x10, but it has to be pretty close). Gannett now owns 50.8%, with Tribune holding on to 30.8%, McClatchy 14.4%, and Microsoft 4%.

4) With the federal government stepping in to bail out Fannie and Freddie, legitimate questions are being raised about the new definitions of capitalism and a market economy. So, too, should questions about what other distressed industries might be next on the government’s list. The auto industry is surely on the list, but how about the daily newspapers? Maybe their salvation lies in being taken over and further mismanaged by the federal government…

5) ItzBig, an online candidate/job opening matching company, has officially shut its doors. The company was launched just over a year ago with much fanfare and instantly received a great deal of attention, even earning a spot on American Venture magazine’s list of 2008’s Most Promising Startups. Despite the gaudy name, however, ItzBig apparently wasn’t big enough.

Always one step ahead of everyone else, Cheezhead has declared that he has moved beyond ripping Monster, declaring in an early June podcast that he no longer finds it sporting, fun, or even interesting. I still, however, cannot resist. Monster has lost its leadership position in online classifieds to CareerBuilder in large part because the company has persistently neglected its users, always considered short-term revenue to be a far higher priority than long-term revenue and a quality user experience (annoying pop-up ads, job scams, etc.), and failed to transition from a 1.0 job board to a 2.0 job board. Furthermore, the company has made a pile of suspect acquisitions and engaged in illegal activity to enrich its executives through options backdating. It’s been one blunder after another for Monster over the past 5 years or so, and while it may no longer be surprising to anyone that the company is mismanaged and well on its way to being an ‘also-ran,’ Monster remains a large company in the space with decent mindshare (albeit largely negative).

In any event, Monster has been in the news recently with two significant announcements. Monster announced that it was shuttering its social networking site Tickle.com, a company that it had acquired for $70 million in 2004. That’s $70 million in shareholder’s money that they flushed down the toilet. Whether the idea was bad from the start or poorly executed after the fact (I suspect it’s a lot of both), the fact of the matter is that the Tickle debacle is another black eye for Monster. The $61 million acquisition of Affinity Labs will undoubtedly share the same outcome.

Monster also announced this week that it had formed an ad network with 19 newspapers. I am not sure yet how this announcement differs from Monster’s previous announcements that it was working with local daily newspapers (here and here and here). As I have said in the past, these partnerships between print and online media companies make sense in theory in that jobseekers and employers can access and deliver job classifieds across multiple media channels depending on their preferences. Unfortunately in practice, however, neither Monster nor the dailies deliver value to either party. And these partnership deals are miserable for the companies striking the deal. The dailies who sign on with Monster are simply throwing in the towel on a vital revenue stream, and Monster is tying its fortunes to a sinking ship. As the saying goes, mating two dinosaurs does not result in a gazelle.

According to ERE, Jobster has burned through most of the $48 million it raised a few years ago and is out trying to raise another round of capital. The Seattle-based company, which garnered tons of attention thanks to dysfunctional, egomaniacal CEO Jason Goldberg (who is now running a  new start-up SocialMedian), is under new management.

With losses of $11 million in 2007, a monthly burn rate of around $1M, and less than $3M in the bank (according to a letter to shareholders), Jobster should expect a pretty brutal, cram-down round from either existing investors (Ignition Partners, Mayfield, Reed Elsevier Ventures and Trinity Partners) or new investors. Given the current environment, I have to imagine there’s a chance that the company may not be able to raise any money at all, or maybe just enough to keep the lights on long enough to sell the business. Regardless of what happens, things have undoubtedly gotten ugly for Jobster. The job board darling of 2006/2007 may be the first high-profile casualty of 2008.

Tags: Jobster, Jobster Is Running Out Of Cash, Jason Goldberg, SocialMedian, Ignition Partners, Mayfield, Reed Elsevier Ventures, Trinity Partners, Job Boards, Job Board Dead Pool

Edgeio announced late last week that it was ceasing operations and looking to liquidate its assets. The company, which had recently raised $6M in capital ($3M of which came from Intel), tried to build a business by aggregating classified listings from all over the web. In explaining the reasons why the business was unsuccessful, CEO Keith Teare stated, “I would say it came down to lack of vision on the part of investors to see the platform as part of the future.” The arrogance and absurdity of Teare’s statement is dumbfounding.

Businesses, especially start-ups, can fail for thousands of reasons, but shareholders are rarely, rarely among them. In point of fact, I should say investors never cause a business to fail, but I can think of a few cases where they actually could cause a business to fail if, for instance, a lawsuit among different classes of investors paralyzed a business to such an extent that it couldn’t function. But these are extremely rare, and in most cases, are ultimately the fault of the business for one reason or another.

Teare’s comments remind me of the scene in Wedding Crashers when Owen Wilson, sitting at the breakfast table, remarks that maybe it was the soft mattress that caused Vince Vaughn to have such rough night of sleep the night before. Vince Vaughn replies, “Yeah, it could have been that – or maybe it was the midnight rape or the gay, nude art show that took place in my room afterwards.” Maybe it was investors that caused Edgeio to fail, or perhaps it was because the site required custom meta tags on every single page of a contributor’s site, or that Edgeio used a completely bizarre XML format that was unique to their site and required a massive rewrite to accommodate the particular demands of a site that never climbed high enough in site rankings to justify the effort, or the fact that the site was completely piecemeal and unprofessional in its look and appearance, which caused serious doubts as to its stability, longevity, and ultimate value to users, contributors, or advertisers. Or perhaps their failure was due to the fact that they never really had a revenue model fully developed or executed that would turn a slightly interesting site/idea into a real business. The last time I looked, generating revenue through the delivery of sufficient value to customers at a level that eventually exceeds costs is the most certain manner by which a business can succeed. Relying on investors to see the future isn’t on the list, no matter how long you make it.

Tags: Arrogant Entrepreneurs, Edgeio, Ridiculous CEOs, Entrepreneurs Who Give Start-Ups a Bad Name, Blaming Investors For Failure, The Dog Ate My Homework, Wedding Crashers, Vince Vaughn, Owen Wilson, Intel, Intel Capital, Classified Aggregators, Classified Advertising