« Previous entry | Home | Next entry »

Jobster, the Web 2.0 company on steroids, brings total bounty to $50M

Updated

jobster2.gif
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.

goldberg.png
Goldberg
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? ;)


Trackbacks
TrackBack URL for this entry:
http://www.siliconbeat.com/cgi-bin/mt331/mt-tb.cgi/1614

Links to blogs that reference this entry:

From: The Ponderings of Woodrow
Example #815 of how there's excess capital everywhere...Jobster lands ANOTHER $18mm!
Excerpt: It's a GREAT time to be an entrepreneur...a GREAT time. Why? Because the ecosystem is overflowing with capital. Sounds like a gross exaggeration you say? Consider: NEA and Oak Investment both raised $2B venture funds in Q2; the two largest
Tracked: July 21, 2006 7:45 PM
From: Job Search Websites
Job Search Websites
Excerpt: Also lists free job posting sites. NURSING DEGREES In 10 Months Earn Your Nursing Degree Online In As Little As 10 Months FromLOC...
Tracked: July 24, 2006 7:15 PM
From: SiliconBeat
Zillow raises $25, joins ranks of bigger Web 2.0 companies
Excerpt: Zillow.com, the controversial online real estate company that provides value estimates on homes, has raised $25 million in a second round of funding. It is controversial because it pisses off lots of real estate agents, who think providing values is t...
Tracked: July 24, 2006 10:06 PM
From: Silicon Valley Watcher--Tom Foremski on the business and culture of innovation
The Valley is Back: VCs setting funding records
Excerpt: By Richard Koman for The Valley is back. How do you know? Follow the money. AP reports that VCs sunk $6.35 billion into 856 startups in Q2 - the hottest quarter for VC investing since Q4 of 2001. And surely you remember that quarter with fond memories....
Tracked: July 25, 2006 8:26 AM
From: PostBubble
VCs are starting to bet big on Web 2.0
Excerpt: Lately there have been some web 2.0 companies that have raised big money. Take a look at Jobster and Zillow for example. These companies started showing a little headway and with that a lot of money has come their way. Zillow, who recently announced a...
Tracked: July 25, 2006 1:52 PM
From: SiliconBeat
What's new? Sex, lawsuits, video....& ads....what did you expect?
Excerpt: Heatseek ...and that's all going on right here in Silicon Valley: Hummer Winblad still embroiled in Napster suit -- Here's the Red Herring piece about the latest, regarding charges that Hummer Winblad erased email pertaining to the case. YouTube has po...
Tracked: July 26, 2006 10:33 AM
From: Dead2.0
Funding the Web 2.0 gravy train
Excerpt: I started this blog, mostly for the fun of being a contrarian,ň╩about a month ago after watching a lot of hype/crazy talk about this so-called Web 2.0. I do agree with most who say the term is generally a bad one, but I haven’t seen anything else...
Tracked: July 27, 2006 5:01 PM

Comments

What makes Jason and Jobster unique is their extreme passion for the business and true innovation for the way employees and employers search. Unlike 90% of the Web 2.0 companies that are not "marketable" to enterprises (I don't think the Cisco's of the world really care about better photo sharing), Jobster is keening focused on changing the recruiting model. They have taking a somewhat broke model (ie the blackhold of job search) and made it a better, more rich experience for both equations, the employer and employee.

Jason Corsello on July 19, 2006 10:22 AM
Comment link

So I immediately went there as a job surfer, tried some keywords.
Voila -- the same old listings from other search engines (location was silicon valley)

results: Nothing new, mostly recruiting firms, same listings from hotjobs/monster/dice. Blech.

Either PT Barnum rules or job searching is like real-estate : its all about the location.

they're still a long way from being useful IMO

Martin on July 19, 2006 1:35 PM
Comment link

Hi Matt,

We didn't axe that Trends page, but if you're seeing a blank page when you click that link, it's a known bug and we're working on the fix right now. Thanks for your thoughtful writeup about us.

Joe Goldberg
Software Developer
Jobster

joe goldberg on July 19, 2006 3:26 PM
Comment link

Everything Jobster says makes sense - accept for one thing. It doesn?t really work. Jobster is nothing more than a glorified job distributor that leans heavily on email as it main distribution outlet.

Initially that first email you get from the HR group is interesting, but that quickly fades. The success rate of the message being passed through to second and third level of people is minimal. Ever get emails from your training group on "tip of the day?" How much attention do you give these emails?

Recruiters find using yet another system to be cumbersome. Jobster has made some progress on ATS integration but it?s still very limited.

What kills me is that nobody is asking these guys the right questions. Ever wonder why you never hear any real results? Talk to people using the system and get their opinion.

If something doesn?t quite feel right about this 100 million dollar company then do yourself a favor and look a little closer. Rubber never meets the road and the wheels of propaganda continue to spin spin spin....

Recruiter on July 21, 2006 7:55 AM
Comment link

You ask us to look a little closer? I just took a look at their impressive client list (http://www.jobster.com/search/companies.html), but it seems that of the 347 companies whose logos appear on Jobster 98 (i.e. 28%)have zero jobs posted at this site???

Boeing has 48 jobs listed, which must be 1% of their annual recruitment target?

Actually 294 of these 347 companies (84%) have less than 50 jobs posted, which sounds like free trial numbers to me?

Unlike job boards or Craig's list, Jobster recently stopped showing posting dates, so it's hard to say how fresh / old these job opportunities are...

What rubber? What road?

Observer on July 24, 2006 3:36 PM
Comment link

WOW at $50M!

web 2.0 jobs on August 28, 2006 6:01 PM
Comment link
Post a comment












Remember personal info?