Monday, April 23, 2012

Another Dagger in the Heart of Job Boards?: BranchOut announces $25-million in additional backing for combat with LinkedIn

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BranchOut's new round of funding could heat up competition with LinkedIn
For investors, it is a small price to pay: One US dollar for each of BranchOut’s current users. To CEO Rick Marini; it’s 25-million reasons to sleep better knowing his quest to take on LinkedIn just got easier.

BranchOut is a Facebook app that connects professionals through the social media platform and has grown to 25 million usersin only two years. To put this into perspective, BeKnown, Monster’s branded version of the same kind of Facebook app (minus the value to recruiters) was launched last June and has about 177,000 users. The new funding brings the company’s total backing to $49 million.

Marini’s explains his company’s success by first lauding LinkedIn as a great product but noting it’s not very personal. He describes LinkedIn as a great resource for finding 10-percent of the workforce and compares it to meeting someone at a professional event for five minutes. He goes on to suggest that Facebook users are engaged, care about one another on a more personal level and that users will go out of their way to help one another get a job.

At 150 million users, LinkedIn is atop the social recruiting and job search ladder. However, Facebook has an estimated 850 million users; another reason why investors are willing to fork over that kind of cash. Recent reports that LinkedIn’s valuation may be overstated by as much as 30-percent and a revised target of $77 per share is more realistic, may be a cause for a little concern for the juggernaut, but more likely a bump in the road.

This news brings me back once again to the subject of job board relevancy and their likely demise. And before you roll your eyes and fire off an email to ask me why I hate the job boards or tell me that the boards are relevant and robust, sit down and have a think on the following five items of interest:

1. People are talking about LinkedIn and BranchOut. Seriously, I have not seen or heard from CareerBuilder or Monster in weeks. In fact, the last mainstream media story I read that grabbed a headline was about how Monster was laying off hundreds at its Massachusetts headquarters, the story that sparked this whole debate.

2. Monster and Careerbuilder are talking about themselves. Ala Donald Trump, the companies are trying to create their own buzz. Today Monster announced an investor conference call to discuss first quarter results and a CareerBuilder press release says the company bought Brazil’s largest job board today. They also issued another press release of the results of a study they performed about how hiring managers are using social media.

3. CareerBuilder released a study about how hiring managers are using social media. Is there an echo in here? Why would a job board want to tell people that nearly two out of five hiring managers are using social media to search for information on job candidates? Although subtle, the story, the results and the survey seem steer the reader to think of the dangers of social media more than support social media use. In fairness, CareerBuilder does great research. Their informational products are robust and have very insightful, powerful data. Quite possibly, CareerBuilder’s future will be determined by how well they leverage and manage all of that data. Then again, if social and professional networks keep gobbling up their market share of resumes, where are they going to get their data?

4. Numbers don’t lie. The market cap for LinkedIn is $10.71 billion and Monster comes in at $999.83 million. CareerBuilder is harder to nail down because it is owned by several large media companies and their collective market caps are not 100-percent attributable to CareerBuilder. An industry analyst suggests a Monster-esque $1 billion for the company. While I am not a market analyst by profession (nor should my word be taken as advice), my best guess is that CB lies somewhere between $1.5 and $2 billion based on current market information. Maybe this isn’t a fair assessment given the point at which each company is in its individual life cycle, but I would say the numbers are hard to ignore and are evidence to support my point. That’s what we’re debating right: Company life cycles?
5. Social networks are mobile. Linkedin and BranchOut have engaging mobile apps with content that brings users to it for more than just social networking, more than just job search, and more than just information; they are true social platforms.  The job boards don’t have this kind of staying power and attention share in their mobile apps since they are currently single purpose.

Boards are losing market share while social platforms, like the early days of the boards, are growing exponentially. They too will have a lifecycle. The slightly concerning aspect of BranchOut is the fact that it runs as a Facebook app. There is growing industry sentiment that Facebook itself is becoming irrelevant and that its recent purchase of Instagram is an attempt to regain some relevancy with users.

Job boards do have a place. I use them, not mostly nor exclusively, to help find new talent and industry data. Boards are going to have to find a way to remain relevant with users and customers, and do so quickly, if they are to survive.

Is there an app for that?