In an economy that has left few businesses unscathed, one company has been touched in an unexpected way.

Jim Treacy
Executive Vice President and COO
TMP Worldwide
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TMP Worldwide ( TMPW), parent company of, the leading online career Web site, reported earnings of 32 cents per share on Tuesday evening, a 45% gain from the year-ago period, and total commissions and fees of $383.6 million, an 11% increase from the second quarter of 2000. Monster was a big part of that improvement, reporting $142 million in fees and commissions, a 64% jump from the same quarter a year ago.

While so many online businesses have burst with the Internet bubble, has exploded -- in a good way. Back in 1995, when Monster was just one year old, it took in fees and commissions of just $392,000. In early July, TMP announced plans to acquire Monster's rival job site, ( HOTJ).

To discuss the trends in online recruiting, spoke to Jim Treacy, the executive vice president and chief operating officer of TMP Worldwide. He estimates that in three to five years, the revenue from Monster will eclipse the revenue from all of the firm's traditional businesses, which include the world's largest yellow-pages ad agency and a top executive search firm business, put together.

TSC: What trends have you seen in the online recruiting business, as the number of layoffs has surged?

The number of resumes coming into has been surging all year. We have 12 million in the database, compared to 4.3 million at this time last year. I think it's a reflection of a new generation of people, who are proactively managing their careers. If they heard of Monster before but didn't put their resumes there, now that they have seen the layoffs at big companies, they've decided it's probably a good place to be.

TSC: Are people finding jobs?

Treacy: Small and midsize companies continue to hire at the expense of larger ones. But even big companies have divisions that are growing and have workers they need to replace. We've seen strong placements in technology jobs, particularly outside of technology companies. Silicon Valley has pulled back, but the rest of America, who couldn't get these people before, is thrilled to take a shot at them now.

TSC: How have job seekers adopted to this market?

Treacy: If you're a technology person who lives in Silicon Valley and you'll only work for Sun or Dell, you'll have a lot harder time than you would have had 18 months ago. But if you're willing to take those skills and go to Wal-Mart or TGIF, and you'll move and work for a different kind of company, the world is still your oyster.

People who are flexible are getting hired very quickly. The time that companies are leaving jobs up on Monster has shortened. Companies are pulling jobs down because they're being filled, where they were leaving them up for the full term at this time last year.

TSC: Which sectors are seeing strong demand?

Treacy: Defense, oil, and health care industries can't get enough people. Sales, marketing, and believe it or not, finance and accounting people -- at entry level to first promotion -- are still in high demand. So, if you have that skill set in your background and you're willing to learn an industry, you can go almost anywhere.

TSC: What is the ratio of job seekers to job finders?

Treacy: It is impossible to quantify. We don't know if an actual placement is being made, unless a corporation or employee tells us. What we see is the flow of job postings. If you were to apply for a job via Monster, we would be aware you did it, we'd know where you applied and what time you did it. But we wouldn't necessarily know if you got the job.

TSC: What types of anecdotal feedback have you gotten about job placement success?

Treacy: From anecdotal discussions, we estimate that between 15% and 20% of the jobs get filled pretty quickly, within one or two months.

TSC: Do you plan on taking the business beyond employment? What other growth areas are you looking at?

Treacy: You've got to stay very focused, particularly with the Internet. The global employment market last year was $157 billion, according to one analyst. There was about $15 billion in traditional help-wanted classifieds, $10 billion in contingent fees for search, $10 billion in retained fees for search, $120 billion for staffing and temporary contracting and a little under $2 billion for online recruiting.

Monster impacts all of those areas -- and that's a huge market. Everything you see Monster do will always have career at the heart of it. Ultimately, you'll have live, streaming content on Monster and many of the message boards and emails will become multi-media in delivery, and probably be hosted by people who work in our search or selection divisions.

TSC: How do you plan to diversify -- your proposed acquisition -- from Monster?

Treacy: It's a media property. And I don't think any one media property is all things to all people. Viacom owns MTV and VH1. AOL Time Warner owns AOL and CompuServe. There is a certain segment of the audience that goes to HotJobs that does not go to Monster. There are some clients at HotJobs that do not use Monster. And there is an ability to figure out the differences and skew them over time.

TSC: How do you plan to grow your traditional businesses?

Treacy: We went public in December 1996 as an Internet company, and almost nobody believed we were an Internet company. We came out with all these traditional divisions, very little Internet revenue and a dream on Monster. The fact is that the interactive division is now our largest of all the divisions.

In 1995, Monster did just $392,000 in commissions and fees, and it is where it is now. Three to five years from now, I think TMP will still be the world's largest recruitment ad agency. We'll still be the world's biggest yellow-page ad agency. We'll be one of the biggest providers of middle management in the world, in a traditional sense. And we'll still be one of the top six executive search networks.

And you'll add up the revenues of those businesses together, and they won't equal Monster's, because of the power of the online medium.

TSC: What are the lessons you've learned from the burst of the Internet bubble? How has it affected job search trends?

Treacy: It really didn't change our strategy too much, and we've been able to consistently deliver our numbers. And fortunately, our client base was small in that area. We've seen a lot of boomerang resumes from investment bankers, advertisers who went to Internet companies and are now looking to go back. You see a lot of really smart young people, who came straight out of college and tried to make it work, and it didn't. Now, they are readjusting their vision. In my view, they are prime employees.

TSC: Do you think your stock is fairly valued? Is it pricing in too much growth?

Treacy: Monster is to the employment space what eBay is to its space. If you look at the Internet leaders, like eBay and AOL, I don't think we're anywhere near priced like them. Even if you look at traditional media, such as newspapers, which Monster has taken market share from, you'd say we're undervalued.

What you see in our stock is a lot of strong support of the secular employment trend from a very solid investor base, offset by a historically high short position from people who've watched everyone else in the human capital sector miss their number two or three times.

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