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Seattle’s Jobster, a site for job seekers and employers wanting to converse with them, has raised $18 million from investors. The private company is now valued above $100 million.
There’s a big lesson in this story, which we’ll get to shortly.
This is big deal, because it is a lot of money at a high price — at a time when there’s a ton of online job sites out there, including Indeed and Simply Hired, not to mention large incumbents like Monster, HotJobs, CareerBuilder and Craigslist.
We were skeptical beginning our interview with chief executive Jason Goldberg yesterday, and demanded to know what Jobster is doing that others aren’t.
After a half-hour conversation, we realized Goldberg is one of the better sales guys at a Web 2.0 tech company these days. (We’ve talked with literally hundreds of tech CEOs over the past several years, and other great salesmen that come to mind of late are Jeff Housenbold of Shutterfly, and John Roberts of SugarCRM; they’re all the sort of guys that get on a roll and leave your head spinning).
It helps, of course, if your company has the goods. And Goldberg spilled fact after fact of progress.
First, there’s the (absurdly) large amount that investors have been willing to give him. Reed Elsevier, the large publishing company that has all sorts of publications that advertise for jobs, and which runs online job boards including the largest in UK, TotalJobs, approached Jobster to invest three month ago. At the time, Jobster hadn’t even used half of the $20 million trove venture capital raised last year from Ignition Partners, Mayfield Fund and Trinity Ventures. The valuation has doubled since last year, and more than tripled from late 2004 when Jobster was seeded. “I don’t know any other web 2.0 company that has raised 50 million in the last two years,” Goldberg said.
They’ve also won loads of corporate customers: nearly 400. The largest among them are paying $9,000 a month, and Jobster has 15 of the Fortune 100 largest companies, he said. The average amount is $5,000 a month. Smaller companies pay $1,000. Jobster is winning 135 customers a quarter. They booked $3 million in new business in June alone, Goldberg said.
Jobster makes money by creating mini-“Friendster” social networks at these large companies. Except they are not for dating, but focused on job outreach. For example, Jobster helps Boeing send out emails to its 170,000 employees with an explanation about Boeing’s job program and an easy way to forward the email to friends and others. Within the email is a form that is tracked by Jobster, which in turn follows the correspondence as it sprouts into a mini-network. From the employees’ friends, the form goes to their friends, and so on. We are dumbing down the description of the process here. But at the end, though, Boeing has a network that it can then tap into repeatedly with updates and further questions.
Here’s the lesson: Selling to big companies is becoming one of the biggest, if only, ways for Web 2.0 companies to save their business models — particularly at a time when the shares of big companies like Yahoo are are getting hit and dropping 20 percent this year. Yahoo and the others may begin to lose their appetite to use their stock as currency to acquire these Web 2.0 companies — especially if the Web 2.0 valuations bloat to more than $100M.
Jobster also unveiled a new job search interface a few days ago. Like the other job sites, Jobster is crawling the Web for job listings and putting them all in a searchable database. Now job seekers can tag themselves with descriptions of what they’re interested in. They can meet other job seekers with those same tags — and they can even meet with employers who have tagged themselves similarly. Jobster has also cut deals with companies like Tivo that lets seekers apply for a job at HR but also gives them an automatic way for a personal contact they may know at the company to refer them.
Finally, Jobster will be profitable next year, Goldberg said. Why not now, if you say you’re already over $10 million in revenue a year? Because the company has been on a hiring binge. It has 120 employees — with 40 in product development (including in India and Sri Lanka) and 40 in sales, working the phones to strike more deals with companies. It is expanding abroad. It also counts Microsoft, Expedia and Google among its other customers.
There is one interesting last-minute change that Jobster made on its site before making the announcement today. It has a trend feature on its homepage (see homepage bottom right), which shows the types of job searches that are increasing and the ones declining. We noticed yesterday that searches for jobs at Google were down 37 percent, and at Yahoo by more than 20 percent — and that these companies were showing among the largest declines of all companies. But Google is a customer, so could that be why Jobster has, well, axed the decline page? ;)