High Tech's Latest Hot Job? Selling Online Ads
Amid Surge, Employers Vie For Talent in Limited Pool; Dangling a Plasma TV Set

By KEVIN J. DELANEY
May 27, 2006; Page A1


With ad sales on the Web booming, so is the market for online-ad salespeople, sparking
intense competition for talent that is pushing up compensation and prompting comparisons with
the earlier dot-com boom.

Keith Richman, chief executive of Web-video site Break.com, has taken to creative measures
to find ad-sales staff. After months of searching with no success, he last week offered
acquaintances a 50-inch plasma television set to anyone who connects him with an ad-sales hire.

One referral yielded fruit, and Mr. Richman filled a sales vacancy Monday. But he's paying
about 50% more in compensation than he had planned a year ago -- plus the cost of the
plasma TV set. "We're in a rapidly growing business with a limited number of people with
the skill set," Mr. Richman says. "The question is, are we in a bubble or is this a reality of a
new market?"

Either way, hiring competition is fierce in online ads sales, whose resurgence was a driver
in alliances between eBay Inc. and Yahoo Inc. and Google Inc. and Dell Inc. this past week.
U.S. online-ad revenue increased 30% last year to $12.5 billion, according to the Interactive
Advertising Bureau trade group and consultant PricewaterhouseCoopers.

That has left Microsoft Corp., Time Warner Inc.'s AOL Internet unit, Facebook Inc., News Corp. and
others scouring for top performers. A week ago, News Corp.'s FoxInteractive Media division lured
away Michael Barrett, executive vice president at AOL Media Networks, which handles advertising and
marketing for AOL, to be chief revenue officer.

While Internet companies, led by Google, have built large-scale automated Web systems for
selling online ads, a majority of online-ad sales by revenue still is handled the old-fashioned
way, by salespeople. The need for a human sales touch is especially strong as traditional
media companies make video and print content increasingly available on the Web -- and
support them with ads -- and traditional marketers such as packaged-goods companies
buy more advertising online.

The talent pool is small partly because of the youth of the online-ad-sales industry.
Also, some Internet-ad salespeople switched to other careers during the downturn in 2001.
Those who stuck with it generally have been richly rewarded with cheap stock options and
bonuses, and thus have little financial incentive to jump from their current jobs.

Some industry executives warn that a shortage of salespeople could be holding back revenue
growth at some Internet and media companies. Small or fledgling companies without brand
names or resources to draw on could also be losing out as they go head-to-head with larger
rivals for hires. And some industry executives caution that competition for talent could raise
the costs of hiring and retaining a sales force. Some worry that could weigh on profitability,
though salespeople earn a lot of their compensation through commissions, which rise
and fall with sales.

"I think we're all experiencing the same thing: a lot of poaching, a lot of phone calls," says
Michael Kelly, president of AOL Media Networks. Mr. Kelly adds: "We were the poacher in many cases.

Yahoo executives last year created a program to recruit and train salespeople from radio, cable
TV and print advertising. Recruits spend their first six to nine months selling ads being coached
by Yahoo veterans.

Worries About Theft

The Internet company started the program partly out of concern that rivals would try to steal
away Yahoo's sales team -- one of the largest, most experienced online-ad sales staffs. "We're on
everybody's list," says Gregory Coleman, Yahoo's executive vice president for global ad sales.
Yahoo's concerns last year about poaching proved well-founded. Vince Messina, a high-profile
Yahoo sales executive in Los Angeles, earlier this month jumped to Microsoft. Mike Murphy,
Yahoo's vice president for media sales for the Western region, in March moved to socialnetworking
startup Facebook. Mr. Murphy says he took a 50% cut in base pay, but commissions
at Facebook could allow him to top his Yahoo compensation.

Recruiters and Internet executives say ad salespeople with roughly five years experience can
make in the range of $125,000 a year in base salary, and the same amount in bonuses and
commissions for hitting their sales targets. The booming market means that many salespeople
are, in practice, exceeding those targets and earning even higher-percentage commissions on the
extra amount.

Total compensation for senior salespeople is up by roughly $50,000 from two years ago, says
recruiter Phyllis Egan. She says she filled 50% more online-ad posts in 2005 than in 2004, and
this year is off to a rapid pace. Jeff Lanctot, general manager of Avenue A|Razorfish, the
interactive marketing unit of Seattle digital marketing company aQuantive Inc., says he is
contacted between five and 10 times a week by recruiters and companies seeking his help in
locating salespeople. "It's not uncommon for the people contacting me to float half-a-milliondollar
packages" for vice president of sales positions or above, Mr. Lanctot says.

In early March, Todd Leslie, 35 years old, quit his job as a senior account executive at an
Internet-advertising company. Within days -- and without looking very hard -- he had six job
interviews lined up. As he neared a choice between four job offers in the middle of last month,
one Internet company said it would make Mr. Leslie a formal job offer without having ever met
him. (Mr. Leslie said no thanks.) He says his compensation, including expected bonus, jumped
35% when he accepted an offer from Atom Entertainment to be East Coast regional sales
manager last month.

A push by TV networks, News Corp. and other media companies to move content and ads online
is fueling the market. Also, Internet start-ups are once again flush with venture-capital cash, and
many are banking on ads for revenue.

Another major catalyst is Microsoft, which is in the midst of a massive push to increase its
online-ad business. In the past year, the company's MSN online unit has doubled to 100 the
headcount in its New York office and doubled to 120 the number of account managers it has
across the U.S., says MSN Sales Director Lisa Utzschneider. "We're going toe-to-toe with some
of our direct competitors to hire some of these candidates," she says.

MSN Adds Staff

In Detroit, where the MSN sales group has doubled to 12 people since early 2005, Microsoft has
picked up sales people from Yahoo, AOL and BusinessWeek, says Barry Dougan, director of
MSN sales for the automotive industry. Over the next year, "we're going to definitely keep pace
with the investments we've made" in headcount, he says.

Google is bolstering a sales-recruiting push with ads in print publications ranging from Crain's
Chicago Business to AdWeek over the next two months. But it says it's hiring more from the
finance and consulting industries these days, rather than competing with rivals for veterans of
Internet ad sales. "There's a pool of people who are in the rotation plan within the industry, and
we generally don't recruit those people proactively any more," says Tim Armstrong, Google vice
president for ad sales.

Many industry executives dismiss comparisons with the frenzied hiring and lofty compensations
of the last Internet boom, saying offers now are more reasonable and companies have real ad
revenue and profits to support the growth.
But others see history repeating itself. Scott Howe, president of onlinead-
network Drive Performance Media, a unit of aQuantive, says: "In some respects I liken it to
1999 all over again."

Mr. Howe turned up empty-handed when he approached a short list of candidates for a senior
sales position he posted last August. When Drive hired its first salesperson nearly three years
ago, she was escaping an imploding start-up and was "excited just to have a job," he says.

But recently, he says, he found himself bidding for hires against companies offering "crazy
money." Mr. Howe handled the sales work himself as the process dragged on. By December, he
says, he was "despondent, despairing."

The intense travel schedule of the sales work meant the Seattle-based Mr. Howe saw his family
rarely. "Hey, the kids, they've forgotten what you look like," his wife told him as he sat in the
Phoenix airport awaiting a flight to a meeting in Philadelphia.

With the help of recruiter Elyse Spalding, Mr. Howe finally located several candidates and
settled on Kirk McDonald, formerly a senior vice president of sales at Internet company CNET
Networks Inc. Mr. McDonald, 39, started as senior vice president for sales, client service and
product marketing at Drive late last month. Mr. Howe says he's thrilled with the hire, but had to
pay about 25% to 30% more in overall compensation than he had initially planned.

Mr. McDonald next week plans to start drawing up job descriptions for salespeople he hopes to
hire this year. "I will be telling you about the nightmares in another couple of months," he says.