My 2012 Predictions...

Here are my predictions for 2012:

First, I am going to predict that even after the failed launch of USAJOBS (and the subsequent hiding of development costs) it will not go back to the private sector as rumored up on Capitol Hill.  There are just too many big challenges facing this country to spend time worrying about an illegal $2 Billion/year operation run out of OPM.

Second, OPM’s exploitation of the Revolving Fund will grow to new heights proving that the behaviors of government bureaucrats who oversee themselves are worse than those who actually have to comply with a regulatory framework (see Wall Street “Fat Cats”).  In fact, those mouth breathing “occupiers” would do the country some good by leaving McPherson Square and setting up camp at 1900 E Street, NW. 

Third, Monster Government Solutions (MGS) will be put on the market for sale.  SCREEETTTCCCHHHH!  Whoa! Hold the phone, what?!?

Yes folks you heard it heard first.  One of my 2012 predictions, along with me losing 3.5 (yes, that’s a decimal point) pounds this year is that MGS will have the big “For Sale” sign on the front door.

The time is right.  With the loss of USAJOBS, a lack of leadership and management at MGS, and no company vision or product roadmap, it’s time to pack it in and call it a night. 

Think of MGS like an investment property where you can depreciate the cost of the building over 27.5 years.  After the property is fully depreciated it has no tax benefit so you sell or swap for another property to start the clock over again.

Monster simply doesn’t have the incentive to keep MGS.  USAJOBS is gone.  The QuickHire product is antiquated and out of date.  And frankly there are just too many Chiefs and not enough Indians (I’m sure I broke some PC rule with that analogy, so forgive me) to drive any new revenue.  Sure they have the VA gig with Serco, but once the VA understands what they bought and for how much, that too will be back on the street.

So who in Whoville will buy this diamond gone zirconium?  The list of potential suitors should be pretty long.  I could imagine:  Accenture, Booz, CSC, Grant Thornton, Lockheed, Northrop Grumman, Oracle, SAIC, Serco, etc. would have an interest in growing their Human Capital practices.  MGS still has a sizeable licensing footprint in the space.

However, some of the players I’ve mentioned are more on the professional services side of the space.  They’ll want/need to take a more agnostic approach to technology platforms. 

Then there are the software/tech firms, but if USAJOBS can be built in a day then why couldn’t one of their other “partners” take the same approach and build out a whole new federalized ATS like QuickHire and go to market?  Could lightning strike twice?

The real question is how much would someone be willing to pay for MGS?  Is MGS worth $5 million, $10 million, $50 million, or $500,000?  As my one and only friend likes to say “That and a ham sandwich gets you a ham sandwich”. 

The “how much” usually comes from due diligence where an interested party gets to review the finances, contracts, assets, liabilities to determine a value.  Then you have the intangibles:  market forecasting, competitive landscape, government policy, USA Staffing, talent, etc. 

The reason the sale of MGS isn’t on the radar is what makes my prediction so timely.  Of course, this is only a prediction, but Monster runs a big risk.  Many times if you hold onto an asset too long it becomes a liability.  Like Monster’s stock (MWW) which 6 years ago traded at 7x today’s price. 

So Happy New Year!  Let’s see how 2012 and my predictions play out.