Job Match Service From CareerBuilder Founder Struggling to Stay Alive

Once named a Red Herring top 100 tech company, the very survival of job matching site  Jobfox is now in serious doubt.

The company into which venture funds poured $40 million is under attack from vendors and customers, and is facing down a class action suit alleging fraud and misrepresentation in connection with its resume writing and premium job services.

At this point, it’s not clear what the status of the company is. Calls and emails to the company, its VC backers, and founder and former CEO Rob McGovern, have had no response.

McGovern’s LinkedIn profile says he left Jobfox in June to launch Cobrain, which he describes there as “a mobile technology company operating in stealth mode.” Before launching Jobfox, McGovern founded and managed CareerBuilder, which was sold to a group of newspaper publishers.

When did financial problems begin?

One source said that as of several months ago, vendors with unpaid bills were being directed to Sherwood Partners, a firm specializing in corporate restructuring, and other services. A company vice president confirmed there had been contact with Jobfox, but declined to discuss what role Sherwood now plays, if any.

One former Jobfox executive said none of the executive team listed on the site is still with Jobfox. A check of LinkedIn shows all but Van Pham, VP of Finance, report having new jobs.

Jobfox launched in 2005, promising to match candidates to jobs with far more precision than was possible with the then commonly used keyword matching. Candidates and employers alike filled out profiles that not only included the usual resume details, but went deeper, exploring issues relating to cultural fit.

By 2008, Jobfox had gone through three rounds of funding totaling $40 million. The most recent was in 2008 when $20 million was invested by Draper Fisher Jurvetson, Menlo Ventures and New Enterprise Associates. Later, the company got loans amounting to $5 million.

It’s not clear just when the company’s financial problems first began. However, complaints from job seekers go back several years. Complaintboard.com has 17. More are scattered at other sites, including at RipOffReport, where several Jobfox vendors are now posting about not being paid. They’ve also posted angry comments on Trademarkia, where McGovern’s Cobrain trademark is discussed.

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Company given an “F” by the Better Business Bureau

The Better Business Bureau logged 67 complaints in the last three years, with 22 in the last 12 months. The number of complaints, plus the company’s failure to respond to many of them, earned it an F, the lowest rating from the BBB.

So prevalent was the charge of scam against Jobfox’s resume writing and its premium job seeker services that McGovern took the remarkable step of creating a video denying the charges. It was posted to the Jobfox-created site, not-a-scam.jobfox.com.

This spring, Jobfox’s vendors, principally its writers, began to complain about not getting paid. One of them posted a memo purportedly written by McGovern. In it, he traces the company’s problems to a potential sale. The offer was accepted, but, according to the posted memo,”Unfortunately, the acquirer turned out to fit the corporate raider stereotype, and over the course of three months implemented tactics that put Jobfox in a very difficult financial position.”

It goes on to say, “I am working with banks, venture capitalists, and alternative acquirers and this process will take time. I realize everyone wants to yell and scream at us, or call their lawyers, although the only answer I can give is that we’re working 18 hours per day to get them paid.”

Writers aren’t the only ones who say they haven’t been paid. Steve Simon, founder and CEO of Jobfox’ former public relations company, SSPR, says his company hasn’t been paid, and has been having difficulty tracking down anyone still with the company.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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1 Comment on “Job Match Service From CareerBuilder Founder Struggling to Stay Alive

  1. I am not surprised of issues and complaints with such a type of servece ultimately fail. As much as technology has progressed a human evaluation of motivation and capabilities is essential to get a correct match.

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