Shares in Monster Worldwide, Inc. (NYSE: MWW) have more than doubled from their 52-week low of $10.01 in late August 2010. The company’s earnings were modest, but they were positive. Shares in competitors Robert Half Inc. (NYSE: RHI) and Manpower Inc. (NYSE: MAN) have also risen by more than a third since last summer.

The boomlet in employment services was based on hopes that as the US economy got back on the right track, hiring would pick up. Well, employment growth has been no better that feeble, and it’s beginning to look like investors might have jumped the gun on these shares. The situation may not improve, either, as professional social networking company LinkedIn prepares its IPO.

According to its S-1 filing, LinkedIn offers”current products for enterprises and professional organizations include hiring solutions, marketing solutions and premium subscriptions. Our hiring solutions are transforming the talent acquisition market by providing unique access not only to active job seekers but also to passive candidates who are not actively looking to change jobs. Our marketing solutions enable enterprises to reach a large audience of influential and affluent professionals and connect them to relevant products and services.”

In other words, LinkedIn offers employers and job seekers a social network that takes advantage of who you know, not just what you know. Both Robert Half and Manpower operate in a more traditional way, as recruitment and placement services. Monster has successfully migrated the traditional approach to an online service.

LinkedIn is apparently not afraid that any of the established services will poach its business. The company notes only that it “expect[s] to face increasing competition in the market for online professional networks.” But the market for “online professional networks” is so far a market of one — LinkedIn.

If LinkedIn’s social network approach works, it may validate an old story about Chicago machine politics: A young guy walks into his alderman’s office and asks for a job. The alderman asks who sent him. The guy replies that nobody sent him. The alderman says, “We don’t want nobody nobody sent.” LinkedIn aims not to be nobody.

Of course, both Robert Half and Manpower sort of work that way, but most job hunters or hiring managers use Monster more like newspaper classifieds. According to the Conference Board’s Help Wanted On-Line Index for December showed that nearly 4.5 million online advertisements were posted. That’s a bit lower than November’s total and was the highest total in more than two years. But unless that number climbs steadily in 2011, Monster could have trouble meeting its stated outlook of a 20%-25% rise in both bookings and revenue growth in 2011.

Monster’s share price is down about -23%, to $16.52, compared with last night’s closing price of $21.39. Trading volume is more than four times heavier than normal.

Monster and other online job sites took away from newspapers starting in the late 1990’s and all through the last decade.  In fact, how many professionals do their job searches on in newspapers any longer?  Now it seems that Monster is finding that it is its turn to be the target.

Paul Ausick

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