Ed. Note: There’s nothing quite like CEO-speak, as Indeed CEO Paul Forster proved recently in a podcast. So leave it to Toby Dayton, President and CEO of LinkUp.com, the fastest growing job search engine on the web, to clarify and examine exactly how Indeed makes money. Today and yesterday, he wrote two relevant and insightful blog posts for DIGGINGS, in which he helped clarify how INDEED makes money from their own job search engine aggregation service. I thought it was so well done, that I am running both posts here. Just so you know, I am chairman of LinkUp.

By Toby Dayton

As a continuation to yesterday’s post about Indeed, I wanted to highlight in further detail a portion of the interview with Indeed’s CEO, Paul Forster. Later in the same interview, a question was asked by Jason Alba of JibberJobber regarding Indeed’s revenue model. By far the most discerning question of the day, Jason asked, “I am curious to know about the differences in business models….Indeed isn’t making the $400 or whatever per job posting like the traditional job boards. How really do these aggregators monetize and how sustainable is this business model?”
Paul gave the following reply:

“Our model, Jason is quite correct, is not pay-per-posting. It’s actually pay-for-performance, pay-per-click. So it’s similar to the general search engines. When you advertise using Google AdWords, you’re paying per click, You’re also specifying a maximum price that you’re willing to pay per click and that’s the same with Indeed as well. So our main product is sponsored jobs and it’s a very easy product for job advertisers to use. All you have to do is specify a budget and the maximum price you’re willing to pay and that’s literally all you have to do because we’ve already got your jobs in our index and when you do that, when you sponsor them, they will appear above the organic results, highlighted in blue at the top of the results. They’ll get a tremendous boost in traffic and you don’t have to pick key words and you don’t have to post jobs because we’ve already got your jobs from your website. It’s very, very simple to do. It’s actually much easier to do than keyword advertising on the general search engines and we drive the traffic directly to the jobs on your site so it’s quite good from a branding point of view and from a cost-effectiveness point of view it’s also very, very good. So that’s our revenue model and basically all of our revenue comes from pay-per-click advertising on our site.”

While of course the answer is absolutely correct (as one would expect from a CEO), it is also extremely misleading. In reading it, it would be entirely understandable if you came away with the impression that it is employers themselves who are paying Indeed for clicks. Paul refers to his clients as ‘job advertisers,’ and one would certainly be excused for thinking that this means employers who are advertising jobs. Indeed certainly has a few employers that are running paid search campaigns directly, but this portion of Indeed’s customer base represents a tiny, tiny fraction of their customers. The vast, vast majority of advertisers running paid search campaigns on Indeed are the job boards who feed their jobs to Indeed and pay for the traffic or job seeker clicks that Indeed delivers to those job boards. The job advertisers that Paul speaks of in his answer are JOB BOARDS. Re-read Paul’s answer again with that in mind and it becomes apparent how brilliant his answer is in being truthful but entirely misleading. He has definitely got a future career in politics should he decide at some point in life to pursue one.
I am highlighting this element of Indeed’s business model not because it is wrong or flawed. The site does offer a slight benefit to some job seekers by allowing them to search hundreds of job boards through a single site. For job seekers that want to search Monster, Careerbuilder, and TheLadders, for example, and all of the other pay-to-post job boards that are filled with both real and garbage job listings, Indeed most definitely offers some convenience. And for job boards, Indeed can be a terrifically effective, less costly way for job boards to generate traffic to their site. As the traditional job boards continue to fall out of favor with both job seekers and employers, they are increasingly desperate to buy traffic wherever they can get it, and Indeed absolutely fulfills that need.
What I take issue with is the fact that both Indeed and Simplyhired pretend to be serving job seekers and employers, when in fact they are primarily serving job boards. Again, this is a perfectly acceptable and most likely a highly lucrative business model. I also believe that Indeed and Simplyhired are extremely smart to embrace a pay-per-click transaction model. Paid search is, without question, migrating into recruitment advertising faster than most would have predicted (as well it should be), and those two job search engines are certainly helping accelerate that trend. But I believe strongly that players in the recruitment advertising space, regardless of their business model, have an obligation towards the largest and most important stakeholders in the space – job seekers and employers.
By serving up scam jobs, phishing jobs, work-at-home scams, and other garbage listings, Indeed is failing to meet their obligation to job seekers. And by publishing duplicate job listings from the hundreds of job board customers that feed their jobs to Indeed, Indeed is failing to meet their obligation to both job seekers and employers. I certainly understand that few businesses can execute their vision flawlessly, and some amount of leeway should always given, especially to start-ups that are helping, to some degree, transform an industry.
I’d grant that leeway to Indeed were it not for the fact that they are appallingly disingenuous about their business model and who their real customers are.
LinkUp Growing Faster Than All Top 10 Job Sites
Posted on Tuesday 4 August 2009


Paul Forster, CEO of Indeed.com, was recently interviewed in a podcast and had some interesting things to say about their business, the Indeed job search engine, and the current environment for employers and job seekers. One of the questions posed to Paul centered around Indeed being inundated with garbage job listings including scam listings, spam jobs, work-at-home scams, and phishing/identity theft jobs. At first, Paul didn’t answer that part of a 2-part question, but he did later on in the interview which I commend him highly for. Paul responded to the question as follows:

“[bogus jobs] are something that we take very, very seriously. We take steps to remove jobs and sources of jobs that are low quality. We have a lot of aspects to our search algorithms that are designed to do exactly that. It’s a constant challenge. To some extent it’s a cat and mouse game because people are going to put up jobs that are low quality. That’s inevitable. Just on the web not everything is going to be good quality.
But we believe Indeed is better than the alternative services for actually filtering and getting rid of those low quality job listings. We try to be as responsive as possible to feedback so when people email us or contact us and say, look, this job source is not good quality or their’s spam in there, or some sort of phishing kinds of things that you occasionally see, we make sure to respond as quickly as we can to remove that kind of content. I think it’s a very good question and something that is a priority for us.”

Again, I applaud Paul for addressing the issue and being open and honest about what is unquestionably a huge problem for Indeed. Because they aggregate the vast majority of their job listings from other job boards that have all these ‘bogus’ jobs in them, Indeed’s service is plagued by those same garbage listings.
Having said that, I take issue with two of the points Paul makes. The first is that if Indeed were truly serious about addressing the issue of spam jobs, phishing jobs, work-at-home scams, etc., they could easily refuse to accept job feeds from any job board that delivered such jobs. That would eliminate the problem immediately and create a far better service for legitimate employers and job seekers alike. Of course, that would also eliminate almost all of Indeed’s revenue which is generated from job boards such as Monster, Careerbuilder, TheLadders, etc. that pay Indeed for the traffic Indeed delivers to their site.
Unfortunately like most job boards, especially in the current environment, it’s near impossible for Indeed to be serious about placing the job seeker and the quality of their user experience ahead of revenue. It’s especially difficult for Indeed, because their customers are not actually job seekers or employers but rather the job boards whose jobs Indeed publishes. These job board customers are the ones that pay Indeed for the traffic Indeed delivers to their sites. Indeed’s concern about quality job listings is genuine only to the extent that it impacts their ability to deliver and monetize the job seeker traffic that they send to their customers – the job boards that publish their job listings, bogus ones included, on Indeed.
The second issue I have is that Indeed is better than the alternatives in filtering out these ‘bogus’ jobs. Indeed may or may not be better than Simplyhired at filtering out garbage listings, but neither job search engine compares to LinkUp which ONLY indexes job listings from company websites. Because LinkUp does not publish jobs from other job boards, there are no scam jobs, phishing jobs, spam jobs, work-at-home scams, or ‘bogus’ jobs. Almost as important, there are no duplicate listings on LinkUp because our job search engine only aggregates jobs from a single source – the employer’s corporate career portal on their company website.
Those two factors, combined with a bunch of unique and sophisticated features that create an unparalleled user experience, are the reasons why LinkUp is growing at a far faster rate than both Indeed and Simplyhired. I guess job seekers have found a better alternative than Indeed.

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