The amazing success (and possible bubble) of LinkedIn’s IPO last week got me to thinking about job boards and money. Almost a year ago I wrote a post about how one makes money with job sites – interestingly enough, it has been one of the more popular posts on the site.
It occurred to me that I missed one really big way that job boards can make money: by going public. Certainly when Dice went public (back in the dark ages), it generated quite a bit of cash. Monster has managed to create a bit of wealth over the years. So why not any job board?
Well, sorry to say, but job boards just aren’t sexy anymore. Much of LinkedIn’s IPO value is (in my opinion) bundled up in the idea that it is a social media site. Social media is sexy. LinkedIn also has big numbers – as in 100 million profiles (although I’m betting only 15-20% of those are active – sounds a bit like a (gasp!) resume database). So, add it up: big numbers + sexy social media = IPO dollars.
Now don’t get me wrong – I absolutely see the value of LinkedIn. I use it regularly (although I don’t give them any hard-earned cash), I know plenty of recruiters and HR pros who have been successful at sourcing certain types of employees from it, and I know they generate real money from recruiter memberships and job postings. And who knows? Maybe LinkedIn will become the Google of the online recruitment world, investing lots of money in technology and research, spinning off dozens of services and sites, and continually changing the way they work. I haven’t seen any sign of it yet, but it could happen.
But let’s get back to my revenue model oversight. Is it reasonable for a job board to go public, in this day and age?
Maybe. Remember the formula above? Big numbers and social media sexiness (or at least some kind of sexiness – you could be mobile-sexy, I suppose). But there’s one more factor – you need to able to convince many, many investors that you’re on the way up, fast, and they should hitch a ride. In other words, momentum.
So let’s say that your job board is growing – fast. Let’s say that your site looks really Web 2.0, maybe even Web 3.0, and you’ve folded in mobile and social media. Let’s say you have a cool name. Let’s also say you’re making decent money in a segment that has a lot of room to grow. Could you make some money with an IPO?
Sure. But I’m betting that there are relatively few sites out there that can jump over all these hurdles.
Besides, when you go public, you lose control, you gain a bunch of strings, and your horizon shortens considerably. Is all that money worth it?
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