During the original dot-com bubble, Monster Worldwide was omnipresent, with Super Bowl ads and a sky-high stock market valuation. That it survived so long, when so many of its bubble brethren went kaput, is something of an achievement.
But the announcement today of the sale of the company to human resource giant Randstad for $429 million comes as no surprise. Indeed, The Boston Globe had reported four years ago that locally based Monster was looking for a buyer.
Somewhat lost among the buzz around the sale today was the release of Monster’s second quarter earnings. And perhaps to no one’s surprise, they were the latest evidence of a company in a downward spiral, one that probably had little choice but to sell itself.
For the three months ending in June, Monster reported $150.9 million in revenue, down sharply from $167.7 million for the same period one year ago. For the first six months of this year, revenue fell to $308.7 million — from $340.6 million in the first half of 2015.
Despite layoffs in recent years, and an attempt to reboot products and make small acquisitions, it seems nothing could help Monster regain its lost footing. Back in 2011, Monster posted $1 billion in annual revenue. Had it remained independent, it was going to be lucky to top more than half of that this year.
Worse, the company had to write down some impaired assets — to the tune of $142 million — driving it to a $124 million loss for the quarter. Now, one might be tempted to say that such problems were mere accounting issues, rather than operational challenges. But, in fact, the company said it had to use $12 million of its own cash to fund operations during the first six months of 2016. Never a healthy sign.
It would be wrong to say that Monster was about to hit a wall. But after more than five years of revenue declines, there clearly was one looming somewhere over the horizon.
So, what exactly went wrong? There’s no single thing, of course. But over time, Monster’s conception of resume-based job hunting was surpassed by things like LinkedIn’s social networking profile approach.
And competitors such as Indeed took the approach of becoming aggregators of other sites. A few years ago, traffic to Indeed edged past the numbers for Monster. In September 2012, Indeed was acquired for $1 billion by Japan-based Recruit.
In the end, Monster stands as a cautionary tale about how the hardest thing in tech is to successfully innovate not once, but twice. The giants who manage this trick and grow even more — like Apple and Netflix — are by far the exceptions.
More common are the Yahoos. Or, now, the Monsters. These are companies that managed to valiantly hang on long after it made sense, only to give in to the inevitable and accept a merger when they had likely lost what little bargaining leverage they may have still had.