e-Business: Monster Networking

Table of Content

I- Introduction
Being in a changing competitive business environment, companies always have to race with time and fight for their position and market share sometimes to win a battle and other times to win the war. Attracting users and being number one in the market is clearly not enough, it important is to keep users loyal to the company and the company has to continuously dig for new revenue opportunities. In another word, to succeed and being on the top is not enough, keeping the success and staying on top is the most important thing right now.

The only way to keep the success is to understand customers’ needs and to focus on them with enough perception in realizing the company’s strengths, opportunities, threats, and position in the business environment especially when internet users became mature and started to communicate online as they communicate in the real life.

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This is the case for Monster in general and Monster networking service in specific. Monster created the online recruitment market and was the first player in this market, however nothing stays as it is, other rivals such as CareerBuilder, LLC and Yahoo! Hotjobs showed up and fought hard to have a market share.

With the social networking challenge, the two sided networks became not enough to keep users. That’s why introducing Monster networking was the right decision; however the service didn’t pay off as expected. This could be due to lack of perception in the planning for the service or even in the implementation of it.

This document analyses the Monster Networking case. First, it gives an overview, then it analyses the problem and gives alternative solutions. Finally, it evaluates each alternative, gives recommendations and summaries the likely results.

II- Overview
In order to be able to analyze the Monster networking case, it is critical to understand the context or the environment that Monster networking belongs to. So, this section gives a background and an overview of Monster.

Monster was founded in 1994 by its founder Jeff Taylor with only “20 customers and 200 job openings” (Knowledge Wharton, p.1) then -a year after- it was sold to TMP Worldwide. The company made the shift from the print ads to the online ads by introducing the online recruitment website. Starting with an existed customers and database gave Monster a strength and helped Monster to rapidly grow or expand and create a unique powerful brand position in the market. The race wasn’t even started when the company started.

Monster presented a business model –that is similar to the dating websites- in which the company creates a network between two sides (in this case the job seekers and recruiters or employers). Where user’s base is considered the base for building new service offerings.

The successful model created demand from both job seekers and employers or recruiters. And years after, a whole recruitment market was created on the internet. What enabled the company to rapidly grow is that Monster understood that it is better to charge employers rather than the job seekers.

In 2004, a decade after, “Monster’s users’ base reached 54 million active users with 800.000 job postings” (Eisenmann, T., Vivero, D., 2006, p.1)

More companies were encouraged to enter the market, not only the recruiting companies, but also the organizations themselves were encouraged to put their job offers on their own websites.

Then, Monster faced the social networking challenge. The company conducted a survey to test the users’ attitude toward networking, results showed that “not only 91% of 22,000 respondent users found networking to be important for job searching but also 46% of them have found a job through networking with their peers or friends”. (Eisenmann, T., Vivero, D., 2006, p.4), it was clear that Monster made the right decision to “launch the networking venture in December 2003” (Eisenmann, T., Vivero, D., 2006, p.1)

Networking came as new service provided for customers to communicate and maximize their opportunities to get a job, or to find “career advice, or even business development from other users” (Eisenmann, T., Vivero, D., 2006, p.1).

Monster succeeded to redefine the career management. However, with the change of the economy and due to the competition pressure, the situation is completely changed. Monster is not –any more- the first player in the online recruitment market. Figure 1 shows that Monster “only has 4.32% of U.S. online recruitment market share while the first competitor CareerBuilder, LLC has about 13% and about 11.2% for Yahoo! HotJobs” (Hitwise, 2008).

Figure (1): Online Recruitment Sites Ranked by Market Share of U.S. Visits for the Week ending January 26, 2008 (and YOY Change)

Source: Hitwise (2008)
What really worries is the fact that some of the Job searching website such as Indeed.com has entered the game with a market share that reached 4.07% (almost equal to Monster’s share). Also, the decrease from the last year reached 54% compared with 92% increase in Indeed.com’s share.

Figure (2): Revenue Growth for Monster Compared with CareerBuilder

(Q1 2004-Q1 2008)
Figure (3): Monster’s Revenues Trend

Source:

Monster (2008)

Gannett co.,Inc press release (2004-2008)

Source: Digital Look (2008)
However, if we add the fact that CareerBuilders’s share also has decreased by 6% with the hug increase in the share of the other sites (Yahoo! HotJobs 43%, Indeed.com 92%, and Jobs.com 84%), this decrease could only be a reflection to the economic slowdown.

What softens the situation is the fact that “Monster’s revenue growth rate in the first quarter of 2008 (13%)” (Monster, 2008) is surpassing “CareerBuilder’s revenue growth rate in the same quarter (3%)” (Gannett co., Inc) for the second year. This could be due to the international expansion.

III- The Problem
The problem with Monster Networking is deeper than just a problem with the networking itself. That’s why this section starts with the problem with the Monster as a whole.

1.      The Problem with Monster
Monster has build a powerful brand position however the difficulty now is to keep it as before number one site in online recruiting market. The successful business model represented in Monster has been outdated right now.

Figure (4): U.S. User Retention and Overlap for Career Development Sites

(July 2007)

Source: Nielson//NetRatings (2007)
Monster’s big challenge is loosing the national market share due to the competition with the company’s two main rivals CareerBuilder, LLC. and Yahoo!’s HotJobs. Figure 4 shows that CareerBuilder has the highest user retention rate in both work (55%) and home (43%)” (Nielson//NetRatings, 2007, p.7)

The website doesn’t reflect a clear understanding of the segments of Monster’s customers or even clear set of solutions. And this –perhaps- is due to a lack of perception in the marketing strategy or even the whole business strategy.

This is simply because the outdated business model does not focus on users because if the focus is on the user, Monster could easily put the three segments of Monster’s users on the main page (individuals/personal use- business- enterprises/corporations) and provide a direct link for the Monster’s solutions for each segment.

The other competitors succeeded in providing websites that attracts customers either with the simplicity of the design or with the new features and services provided for users. In Yahoo! HotJobs’s case, Yahoo! became mature and experienced in online marketing and in understanding users around the globe and already have a whole system that connects the company’s users (through groups, messenger..). In CareerBuilder’s case, the company is continuously adding new features (video resumes, version of the website for iphone or cellular) and also has a clear understanding of their solutions for the different segments of their customers and this is reflected on the website.

2.      The Problem with Monster Networking
Moving to the networking, Monster –till this moment- didn’t get the full benefits of the networking yet. The networking has more potentials than being a service provided by Monster. The problem has two dimensions as shown on the surface; the first dimension is that it did not pay off as expected or planned. The second dimension, is the cannibalization risk because the networking got the users’ attention –may be- away from the core business.

However, by searching for the real roots or causes of the problem, these dimensions are just symptoms and not the real causes of the problem. The real causes could be two main causes. The first one was concerned with the planning for the new service. The second one was concerned with the implementation of the new service.

2.1 The Planning
Monster failed to take the right step in acquiring a successful networking company because both networking companies acquired by Monster (Tickle- AffinityLabs) are not the right choice when it comes to professional networking.

Monster has underestimated the potentials of the networking. For example, Monster as a whole could be presented through networking in order to take the right action to face the networking challenge and to create a whole new business side by side with the existing core business especially with Monster’s international expansion.

Also, the networking system or the features provided in the networking service couldn’t compete with the features provided in social or professional networking famous sites (LinkedIn business for example).

2.2 The Implementation
There are only two levels of the networking accounts either free account or VIP account which gives the user the full features of the networking service. The price in this case isn’t effective. Also, users could -by registering in the networking- be attracted away from Monsters core business. Also, both features provided for free accounts or the marketing campaign were not enough to attract more users to the service.

IV- Alternative Solutions
First of all to offer the best solution for the problem, it is necessary to have an idea about the available options for Monster. Eisenmann, T., Vivero, D. (2006) mentioned “four strategic options introduces by Monster management in 2005” (p.1). These options –as shown in figure 5- are as follows:

Figure (5): Pre-assessment of The Four Strategic Options

Option (1)
Option (2)
Option (3)
Option (4)
Action
Continue with the original plan
Eliminate subscription fees
Expand the network and acquire one social networking start-ups
Terminate the networking venture and focus on the core business
Level
Same plan

Elimination of pricing
New strategy/plan

Cancelation of the service
Implications
To quite the competition with two threats:

·       Maximizing cannibalization threat,

·       Rivals will imitate the model and even surpass Monster
To decrease  revenues by:

– on the short term:

·       Eliminating the networking revenues,

·       Increasing the cannibalization risk

– on the long term:

·       Increase retention
To have:

·       an opportunity to adjust the networking to support the core business

·       minimized cannibalization
To quit the competition by:

·       abandoning  one component of what  distinguishes Monster from other rivals

·       ignoring the social/business networking threat
Pre-assessment
Not enough as a solution
Not enough as a solution
Accepted

But with adjustments
Not accepted as a solution

These 2 options could be embedded in one solution
Source: the four strategic options were adopted from:

 Eisenmann, T., Vivero, D. (2006). Monster Networking. Harvard Business Review
·         Option (1): “To continue with the original plan”:

This option will mean that Monster will quite the competition by leaving the situation as it is with all the internal and external threats such as:

The internal cannibalization threat that Monster Networking represents for the core business.
The external threat when rivals imitate the model getting Monster’s strength and surpass it.
Even if the service would provide Monster more revenue in the future or at least was one of the revenue-generating services, this option is unacceptable to be implemented in the current competitive environment with the continuous decrease in Monster’s market share.

·         Option (2): “To eliminate subscription fees”:

However, this option –on the short term- would decrease revenues and increase cannibalization risk, but, this option could be considered as a part of a solution –not the whole solution- because on the long run, the free service could increase or maximize users retention or even enlarge the users’ base that could be used for other future purposes/benefits.

·         Option (3): “To Expand the networking and acquire one social networking start-ups”:

This option gives Monster the opportunity to adjust the networking to support the core business and minimize the cannibalization risk.

·         Option (4): Terminate the networking venture and focus on the core business

This option is unacceptable because it means that Monster would simply quit the competition when the company abandons one of the components of what distinguishes Monster from other rivals in the career development field or even ignores the social/business networking threat.

V- Evaluating the Chosen Alternatives
Now after this pre-assessment for the four strategic options introduced by Monster management, it is obvious that there are two logical alternatives:

New adjustments for the networking.
A new strategy and system for the networking.
Before evaluating these two alternative solutions, it is important to realize the need for networking and the possible opportunities.

1. The Need for Networking
Figure (6): U.S. Online Social Network Advertising Spending, 2006-2012 (millions)

Source: eMarketer (2008)
To realize the need for networking, there are two important trends for 2008 should be mentioned. The first trend is that “U.S. social-network advertising spending reaches 1.4 billion” (eMarketer, 2008). The second trend is that “networking goes beyond MySpace and Facebook” (emarketer, 2007).

This simply means that Monster will make the right choice when it decides to get into the professional networking due to two main reasons:

1.        This advertising spending clearly reflects the fact that social networking websites attracts more online users than ever before maybe because of (a) the shift that the Internet made in the world communications, due to (b) the current state of the economy, or even due to (c) the increase in the social networking websites that simply reflects a high demand on online social networking;

2.        The shift that is expected to be happened– and is already happening- in the social networking when the fact that social networking is not enough and that “professional” networking could give them more than “social” networking.

Advertising revenues

2. The Hidden Opportunity in professional Networking
Figure (7): Starts of Employer Firms (2002-2006)

Source: SBA’s Office of Advocacy (2007)

Creating new business

Increased traffic

Beside what mentioned about what networking could give, whether it is advertising revenues or increased traffic, and away from the networking subscription revenues, there is a possible opportunity in creating a new niche business for supporting small and medium businesses.

SBA’s Office of Advocacy (2007) estimated that “there were 649.700 new businesses with employees out of 26.8 million businesses in U.S. in 2006.” (p.1)

Also, there is a simple fact published by the U.S. Bureau of the Census, that “small firms, over the past decade, did create between 60% to 80% of the total new jobs in U.S.” (Cited in SBA’s Office of Advocacy, 2007, p.1)

3. The Context Needed for the Change
Of course this paper analyses the networking case but networking belongs to Monster and any slight change in each one of them affects the other.

The solution to enhance Monster as a whole resides in two main paths; the first one is a new “aggressive” marketing strategy, and plan for Monster, the second path is a new enhanced aligned technological “ICT” plan for Monster.

3.1 New Aggressive Marketing Strategy
Partnership is considered as an appropriate choice in the online flat world because competition became mostly about “traffic” and “market share”.  The fact -announced by ComScore MediaMetrix (2007)- that “25% of CareerBuilder’s traffic comes from MSN and about 20% from AOL” (cited in John Zappe, 2008) gives an idea about the reason that enabled CareerBuilder to surpass Monster’s traffic share in the market and should make Monster rethink again and again in partnerships and deals.

The good news is that Monster already “started to partnership with MSNBC in April 2008” (Zappe, J., 2008) and another deal with Google in 2006.

3.2 New Aligned ICT Plan “System Upgrade”
Monster’s website -in its current version- is considered to be outdated. The site should be upgraded to reflect the new strategy that focuses on customers in different segments and also make it easy for visitors to know what kind of solutions/products/services that Monster is providing. Developing a new version of Monster for iphones or cell phones for example, new features such as video resumes, and a new advanced networking.. etc. in order to compete with other rivals.

4. Evaluating the chosen alternatives

4.1 First Alternative (New adjustments for the Networking Plan)

This alternative is to introduce Monster networking in a new version using some adjustments. First adjustment is to use a smart effective pricing strategy for the networking with a clear set of segments by which Monster could control the price according to the use of the networking to contain or reduce any cannibalization risk for the core business.

The suggested smart pricing strategy is adopted from the LinkedIn model. LinkedIn offers four levels of membership; first level is the free membership or the “personal account” -and this level with the basic networking features is necessary for the growth of the network-, then LinkedIn categorized the premium membership into three other levels, so the second level –or the first premium level- is the “business account” ($19.95/month or $199.5/year), then the third level or the “business plus account” ($50/month or $500/year), and finally the “corporate solutions account” in which LinkedIn solutions are provided to corporate recruiting and networking.

Table (8): LinkedIn Business Model:

Pricing & Selected Limitations in LinkedIn Networking Accounts Features
Account Level
Personal
Business
Business Plus
Corporate Solutions
Pricing
Free
$19.95/month or $199.5/year
$50/month or $500/year
n/a
Other selected features
Request for introductions
5
15
25
unlimited
Send InMails
0
3
10
50/month
Results/search
0
100
150
1,000
Source: LinkedIn website
The world isn’t just in black and white and this is exactly what this business model in LinkedIn reflects.

Networking in LinkedIn is more than introductions and boards. So, to compete, Monster should add some new features in the networking similar to those in social networking side by side with the Monster’s solutions for businesses or corporations. Monster should not be afraid of the free use of the networking as long as it will be controlled -as mentioned above- because it (1) will be a tool for users to discover the networking and decide when to upgrade to the premium level, (2) increase the traffic and users’ base, (3) increase users’ retention, and (4) increase the advertising revenues.

Concerning the advertising revenues, a new aggressive marketing campaign should be planned and executed to get more users and advertisers to the network. Even if this marketing campaign will be just an online marketing campaign, the most important to launch it with new mission and vision giving the customer the sense that the new networking -and Monster as a whole- focuses only on him/her and introduces something new. Providing services/solutions for small and medium businesses could be the new niche for the networking and for Monster. So, the campaign should clearly introduce what Monster and Monster networking already had and what is updated or added especially the international expansion and supporting businesses.

These few lines in the example message –as shown in figure 9– show a bold shift to networking. However in this alternative Monster could focus on the promotion for this new business because the networking in the current version already provides a basic level for the business or professional networking, also Monster already provides enterprise solutions but the missing ring is to appropriately promote for the networking service –not only for Monster current users- and to introduce Monster solutions through one channel.

This message reflects the perception in:

–          Understanding customers,

–          Understanding Monster’s strengths (experience in recruitment solutions – international presence) and opportunities (professional networking).

However, this solution is not enough on the long run, but it is acceptable on the short run because it provides an alternative to leverage the networking –and Monster- traffic, users’ retention, and revenues.

4.2 Second Alternative (A new strategy and system for the Networking)

The new suggested system -in this alternative- should use the core functionality of the most competitive professional networking company such as LinkedIn. However, with the step that Monster has taken by acquiring “AffinityLabs” in 2008, Monster should -in this case- use the core functionality of AffinityLabs and any other networking company acquired by Monster (e.g. Tickle) but in the context of LinkedIn business model to implement within not only in the Monster networking but also in Monster as a whole.

The first step is to develop a whole new version of Monster that focuses on professional/entrepreneur networking that –by nature- will include the recruitment services as one solution from other multi solutions. In another word, the focus should not be on the products or services/solutions, but on customers. The old business model provides a solution for both job seekers and job providers however the new system should focus of customers in different segments (individuals- businesses- enterprises). Networking here is the best way to connect customers with each others and with Monster through customized solutions.

The suggested effective pricing strategy –mentioned in the other alternative- should also be implemented in this solution to contain the cannibalization risk, increase users’ base and retention, and increase revenue opportunities from the networking by providing customers customized networking upon their networking needs.

This revolutionary solution should be implemented on the long run due to the time, effort, and budget required for planning and implementation of this solution.

Of course this solution is risky; however with the customized limitations used in the LinkedIn business model, Monster could contain the cannibalization risk especially with the potential increase in advertising revenues.

Monster -in this solution- should implement the networking business model not only with a marketing campaign but with a whole new strategy and a whole new upgraded system that meets the users’ needs in professional networking and in the same time maximizes Monster’s opportunities for revenue expansion. The huge base of users and the international presence will –for sure- support Monster in this shift.

VI- Summary and Recommendations
In Monster’s case, the only alternative for Monster now is to move on the short term (the first alternative) to adjust the current situation for both Monster and the networking to increase the market share in the national market and in the same time to plan for the long term (the second alternative) to adjust the Monster’s position as a whole.

Obviously, the new management is active but it is all about the perception. Five or six years ago, when Monster decided not to renew the deals with MSN and AOL this was the chance for another rival to come up to the surface and aggressively compete (with about half the traffic coming only from both sites, MSN and AOL). Also, acquiring “Tickle” or “AffinityLabs” didn’t provide Monster the required competitive advantages in networking. However some of the deals needs enhancement such as the deal with Google.

The advantage that Monster has in the international market gives Monster a strength and an opportunity however it is subjected to change especially with CareerBuilder’s efforts to expand to the international market that’s why Monster should move fast enough. Being in an economic downturn creates an opportunity for career development sites in general and for Monster in specific so it is much recommended to move on both tracks (short and long term) to benefit from the available opportunities and to minimize the risk.

Finally, networking should be the strategic weapon and not just a separated management for a service provided for users. It is not the time for two sided networks anymore. Social and professional networking sites proved that internet users became mature now and communicate now like they communicate in the real life. So, whether the user is an individual, a small or medium business, or even a corporation or a governmental body, professional networking creates more opportunities for these users in the same time it creates more opportunities for the company that provides the networking service.

References

Digital Look (2008). Monster Worldwide, Inc. (MNST) Portfolio. Retrieved June 24, 2008 from http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?username=&ac=&csi=103894

Eisenmann, T., Vivero, D. (2006). Monster Networking. Harvard Business Review

eMarketer (2007). eMarketer’s Ten Key Predictions for 2008. Retrieved June 24, 2008 from http://www.emarketer.com/Article.aspx?id=1005790

eMarketer (2008) Social Networking Ad Spending Update. Retrieved June 24, 2008 from http://www.emarketer.com/Article.aspx?id=1006278

Hitwise (2008). CareeBuilder.com the top visited Employment Website Last Week. Retrieved June 24, 2008 from http://www.hitwise.com.au/press-center/hitwiseHS2004/us-20080201-careerbuildercom.php

John Zappe (2008). Monster Partners With MSNBC in Traffic Deal. Retrieved June 24, 2008 from http://www.ere.net/2008/04/10/monster-partners-with-msnbc-in-traffic-deal/

LinkedIn (2008). Account upgrade. Retrieved June 24, 2008 from http://www.linkedin.com/

Knowledge Wharton (2007). Career Crisis: Monster.com has choices to make as it approaches ‘Middle Age’. Retrieved June 24, 2008 from http://knowledge.wharton.upenn.edu/articlepdf/1817.pdf?CFID=66169825&CFTOKEN=33536241&jsessionid=9a30759f91138183b375

Gannett co., Inc (2008). Press Release. Retrieved June 24, 2008 from: http://www.gannett.com/news/pressrelease/presentations/1Q08transcript.pdf  http://www.gannett.com/news/pressrelease/presentations/1Q2007transcript.pdf  http://www.gannett.com/news/pressrelease/presentations/1Qtranscript2006.pdf  http://www.gannett.com/news/pressrelease/presentations/1Q05transcript.pdf   http://www.gannett.com/news/pressrelease/presentations/1Qtranscript04.pdf

Monster (2008). Investor Relations. Retrieved June 24, 2008 from http://phx.corporate-ir.net/phoenix.zhtml?c=110723&p=irol-newsArchive

Nielson//NetRatings (2007). Top U.S. Web Sites Enjoy High Visitor Retention Rates, But Face Significant Audience Overlap with Competitors, According to Nielson//NetRatings. Retrieved June 24, 2008 from http://www.netratings.com/pr/pr_083007.pdf

SBA’s Office of Advocacy (2007). Frequently Asked Questions. Retrieved June 24, 2008 from http://www.sba.gov/advo/stats/sbfaq.pdf

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e-Business: Monster Networking. (2017, Jan 08). Retrieved from

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