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But six months into the restructuring, Goldberg says his company is poised for success. Jobster on Thursday plans to announce a new application, Employer Talent Networks. It will feature more than 350 employers who aim to develop two-way communication with Facebook users via the social-networking site's platform and Jobster's tool.
Goldberg, however, says it's more than the Employer Talent Networks application that will drive success for his 3-year-old company. Jobster is getting a financial lift from its controversial restructuring, which pared down expenses and shifted the company's model of direct sales and support to large corporations to one where services would be delivered online and by phone.
CNET News.com spoke with Goldberg earlier this week about Jobster and its prospects going forward.
Q: Tell me about the restructuring.
Goldberg: When we started the company in January 2004, we set out to first build social-networking tools to help employers build their own kind of private talent networks to find candidates. So, our first product offering was Jobster Employer Sourcing Tools, which we launched in March of 2005.
That product basically helped employers build private talent networks to reach out to the people that their employees knew, and invite them to develop relationships with the company...We signed up hundreds of customers to use these tools in 2005 and 2006. Then, in 2006, we started to see the market shifting a bit, where consumer public networks were driving a major part of the business. So we also started to invest in building public talent networks on Jobster.com and then other places where we could distribute our technology.
About mid-2006, we did a strategic assessment of the business. The analysis we did at that time, basically, saw that Jobster had three legs to the stool, in terms of a sales channel perspective. We had a very large field sales and service team that was selling to large enterprises in person and then servicing them in person. Then we also had a telephone sales and service team and, then, an online sales and service team.
The decision that we made starting in the middle of last year, which we enacted at the beginning of this year, was to restructure the in-person sales and service channel to the enterprise that was highly unprofitable. The rest of our business was trending in the right direction and was really moving us more towards the model we wanted to be in. We saw that we could accelerate the velocity and volume of our sales by selling more online and on the phone. So, what we did at the beginning of this year was completely eliminate our field sales and service, and all the supporting parts of the company.
The net result of that is Jobster, six months later, after a very public restructuring and pretty large cut of about 40 percent of the workforce, is doing very well. The business is very strong, and our core private-talent networks for employers are now profitable on a monthly basis.
If you were to take your revenue pie, how would you slice it?
Goldberg: Jobster's revenues today have about 80 percent coming from subscriptions to our recruiting tools. Another 20 percent comes from online advertising packages we've built to help employers advertise on Facebook, as well as on Jobster.com. Within that 80 percent for the recruiting tools, about half of the revenue is coming from large enterprises and half from companies under 1,000 employees.
You once said you expected to be profitable in 2007. Does that still stand?
Goldberg: I would say we could, but more likely it will be early 2008. It's just because we are very excited about the recent traction from our consumer investments, and we'll probably continue to make some additional investments in that area at the end of this year. Then we'll push toward overall company profitability early next year. It's not a question of if (we'll be profitable). It's more of a business decision.
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