Standing in a massive ballroom at the glitzy Westin Hotel in Boston last year, Jeff Taylor, the brash CEO of Monster.com, exhorted more than 300 employees at his company's annual sales meeting to join him in an off-color chant. "The roof. The roof. The roof is on fire," he bellowed, singing a song frequently used by nightclub deejays to pump up their crowds. "We don't need no water. Let the motherf----- burn. Burn, motherf-----, burn." Now, he brushes off the smattering of complaints he heard from employees. His motivational ploy, he says, "was just frickin' great." It pounded home the message that Monster.com, the world's biggest job-search Web site, is at the top of its game, and it revved up the salespeople to defend their turf.
The episode was quintessential Taylor: unconventional, fun-loving, borderline offensive, yet effective. This 40-year-old college dropout turned marketing whiz has built the world's leading online recruitment site. With 10 million r?sum?s, Monster.com holds sway over 34% of the market for online recruiting--more than double the share of its nearest competitor, HotJobs.com Ltd. (HOTJ), according to Jupiter Media Metrix Inc. What's more, while other online outfits rack up losses, Monster has been profitable for 12 consecutive quarters. In the most recent quarter, ended Mar. 30, it generated $32.5 million in operating profit on $129.2 million in revenue. That accounted for 35% of the revenue of its parent company, TMP Worldwide Inc. (TMPW), a New York employment advertising and executive search agency.
But there's a downside to a CEO being the life of the party. While Taylor's fraternity-like antics leave many people laughing, some former employees find his behavior upsetting. William O. Warren, who resigned as Monster's president in 1999 and is now CEO of a rival company, WOWemployers Inc., says 18 Monster employees joined his firm this year in part because of the "hedonistic" working conditions at Monster. One of the defectors, Gina Esposito, former human resources manager at Monster's Indianapolis office, calls Monster's atmosphere "sordid." She says she was offended by the way Taylor looked at her and kissed her on the cheek. Also, she says, he danced closely with employees at parties, which is "totally inappropriate for a CEO."
Taylor says he's astounded by the complaints. He prides himself on creating a friendly workplace. And he dismisses his critics because they work for WOW, which TMP Worldwide sued in March, charging theft of trade secrets. The suit was settled last month with Monster agreeing to pay WOW's legal expenses, and former Monster employees agreeing not to contact their Monster clients for a year. As for the dancing, Taylor says he simply matches employees' dance styles: "If somebody wants to dance funky and close, I'll dance funky and close." And he kisses women on the cheek "almost out of respect. It's not out of disrespect. It's my way of saying: `I care about you,"' he says.
Taylor is more concerned about the challenges facing Monster. With the economy cooling off, rivals getting savvier, and some corporate customers annoyed by Monster's fees, its domination of the market may be hard to maintain. Monster makes its money by charging corporations up to $300 for each help-wanted ad but lets individuals post their r?sum?s for free. The company not only faces competition from other big online job boards but also must defend itself from 35,000 or so specialty sites that can provide a more targeted pool of job candidates for less money.
The business is changing rapidly, too. As the online-recruiting industry matures, companies are looking for a single solution to all of their hiring needs, including software that helps sort r?sum?s, test applicants, and conduct background checks of job candidates. The race to create such a comprehensive package has just begun, but it could make large online job boards like Monster seem like dinosaurs. Already, companies are hiring online recruiter BrassRing Inc. to search lots of specialized job sites simultaneously and automatically select the best-qualified applicants.
While most analysts view Monster as unstoppable, not everyone agrees. Analyst Matthew Litfin of William Blair & Co. in Chicago recently downgraded the stock to "hold" because of the economic slowdown. Since February, Monster's job listings have dropped more than 10%, from a high of 505,000 to 443,775 in mid-May. The company's deferred revenues grew only 3% last quarter, compared with 20% in the previous quarter. That's because corporate customers are signing shorter-term contracts, so less of the payments spill over into another accounting period.
Taylor says he isn't worried. He believes Monster can weather the storm better than most online job boards because it gets 40% of its revenue from its rapidly growing overseas businesses. And the company has started buying firms that will allow it to provide more recruitment services, such as r?sum? sifting. On June 1, Monster is going to launch MonsterTRAK, a service aimed at matching college students with jobs.
While Taylor tinkers with operations, he has no plans to change his style. Even though he's the father of three, he sometimes parties late with employees, deejaying their private parties, and dancing the night away. After such events, he says, he can literally see morale jump. "Everybody has a little bounce in their step," he says. He recently bought a 1954 tugboat that he plans to use for company outings. Taylor wants a culture with a "high fun quotient," says Sales Vice-President Peter Blacklow.
Taylor fancies himself a younger version of Richard Branson, chairman of Virgin Group Ltd., whom he praises as an "adventurist." Both companies own blimps, and when Branson challenged Taylor to go waterskiing behind the Monster blimp, Taylor accepted. He handily beat Branson's previous record, skiing for 3.3 miles, vs. Branson's 1.5 miles, last year in Panama City, Fla. Says Branson: "He's a great people person, and he enjoys working hard and playing hard."
Doing unusual things has been a trademark of Taylor's life and career. The son of a guidance counselor and a preacher active in the 1960s peace movement, Taylor spent his grade-school years in a community in Peoria, Ill., that was so poor there were no team sports at his school. Later, when the family moved to a suburb of Boston, it was too late for Taylor to participate in team sports, which his mother, Kay, believes wound up making him more of an individualist. "He has never been in the mainstream," she says. For instance, he learned to tie elaborate flies for fishing when he was in 7th grade, insisting that his parents stop when they passed roadkill so he could fetch feathers and hair for use in his lures.
He was also outgoing. He became a popular paper boy because he befriended many people on his route. He was raised in a tightknit family--meeting weekly to discuss pressing issues and always starting the sessions by singing a family song they had made up. Those were the days Taylor learned to play the guitar and became passionate about music.
He took a while to find his way in life. He drifted in and out of the University of Massachusetts for six years, driving a truck after his freshman year, then returning to school and starting his own business selling freshman "survival kits"--complete with toothbrush, candy bar, map of the campus, and bottle opener. He spent some summers working as a dishwasher in Maine, where he developed an interest in advertising. He spent his spare time creating flyers that promoted local entertainment. He also learned how to deejay. After he quit school in 1984, he spun records for several years in Boston clubs. That brought out the party animal in him, says his mom.
Finally, he decided to try advertising as a career. It appealed to him, he says, because it allowed him to create something. He quickly became a star. At his first ad job, at JWG Associates Inc. in Needham, Mass., where he sold ads and organized ad campaigns, Taylor created energy and excitement and "turned the company into what it is today," says Linda Rappaport, now JWG's chief operating officer. He often played music at work and joked around, making late nights feel "almost like summer camp."
Within three years, he founded a recruitment agency for high-tech clients, Adion Inc. He soon started hearing people complain about how hard it was to find qualified candidates from classified ads in the newspaper. He thought a lot about the problem, he says, and one night, the solution came to him in a dream: an online job board for his clients. When he awoke he immediately scribbled some notes on a piece of paper, which now hangs in a frame on his office wall.
That led to Monster Board, which he launched in 1994. One year later, he made a move that others considered crazy: He sold his business to TMP for a mere $900,000, staying on as CEO. That now seems brilliant, because it provided him with the money to spend heavily on advertising, including ads during the 1999 Super Bowl. He paid $4 million for three 30-second ads. Until then, Monster had averaged 600 job searches a minute. On the evening after the ads aired, it was logging 2,900 a minute. Ultimately, the ploy attracted millions of job seekers.
Now he has to protect his successes. Some customers are getting fed up with Monster's high prices and business practices. Tech consultant Advancia Corp. in Oklahoma City recently switched from Monster to HotJobs because many of Monster's r?sum?s are either anonymous or posted by staffing agencies that require employers to pay hefty commissions of up to 30% of a hire's annual salary. With former employees, fickle customers, and rivals nipping at its heels, Taylor will likely find that maintaining his monster lead will be tougher than building it. By Rochelle Sharpe