At: 07/29/2008
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The stock price of Salary.com has gone down about 75% over the last year. What I found interesting was what a Wachovia analysts said: "We are downgrading [salary.com] due to concerns about the strategic shift away from the prior 'profitable investment strategy' to more of an ‘fuel future growth by front-loading sales expense’ strategy. This, coupled with the management transition, recent revenue miss, and delayed profitability suggests to us that the stock will be range-bound in the near term, until there is further clarity on these potential issues.”
I'm not exactly sure what this means. Does anyone have any insights?
BTW - not all is bad at Salary.com. They reported an increase in enterprise subscribers (over the course of 2008, enterprise customers grew from over 1.8 thousand customers to nearly 2.8 thousand customers) and revenues for the fiscal 2008 increased 50% to $34.5 million from $23.03 million a year ago.
I don't think Salary.com ever had much of a problem gaining visibility and driving leads (they've always produced good salary data (people eat this stuff up) so they've benefited from easy and cheap publicity. The problems seem to be more strategic and operational. I'd love to hear from others as this one is a mystery to me.
Mark M. Willaman
Founder and CEO, HRmarketer
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