Monster Worldwide, Inc. Q1 2009 Earnings Call Transcript

Apr.30.09 | About: Monster Worldwide, (MWW)

Monster Worldwide, Inc. (NYSE:MWW)

Q1 2009 Earnings Call

April 30, 2009 5:00 pm ET


Robert Jones – Investor Relations

Salvatore Iannuzzi – Chairman of the Board, President & Chief Executive Officer

Timothy T. Yates – Chief Financial Officer, Executive Vice President & Director

Darko Dejanovic – Executive Vice President, Global Chief Information Office & Head of Product

Arnold Donald – Customer Service

Lise Poulos – Executive Vice President & Chief Administrative Officer

Mark Stoever – Executive Vice President Internet Advertising & Fees

James M. Langrock – Senior Vice President Finance & Chief Accounting Officer

Ted Gilvar – Executive Vice President, Global Marketing Officer


Toby Summer – SunTrust Robinson Humphrey

Mark S. Mahaney – Citigroup Smith Barney

Mark Marcon – Robert W. Baird & Co.

Christa Quarles – Thomas Weisel Partners

Monica DiCenso – JP Morgan Securities

John Janedis – Wachovia

Tim McHugh – William Blair & Co.


Welcome everyone to the first quarter 2009 financial results conference call. (Operator Instructions) I would now like to turn the call over to Mr. Bob Jones, Vice President of Investor Relations.

Robert Jones

Good afternoon. Thank you for joining us on Monster Worldwide’s first quarter 2009 conference call. Our format calls for us to have formal remarks from Sal Iannuzzi, Chairman, President and Chief Executive Officer and Tim Yates, Executive Vice President and Chief Financial Officer. Also available to answer any questions you may have during the Q&A part of the call are several members of our executive operating team. They are Darko Dejanovic, CIO and Head of Product; Ted Gilvar, CMO; James Langrock, Chief Accounting Officer; Arnold Donald, Customer Service; Lise Poulos, Chief Administrative Officer and Mark Stoever, Corporate Development and Strategic Alliances.

Before we begin I’d like to remind you that except for historical information, the statements made during this conference call constitute forward-looking statements under applicable securities law. Such forward-looking statements involve certain risks and uncertainties including statements regarding the company’s strategic direction, prospects and future results and do not include the effect of the defense or outcome of the ongoing litigations related to the company’s historical stock option grant practices or costs associated with the restructuring and the 2007 security breach.

Certain factors including factors outside of our call may cause actual results to differ materially from those contained in the forward looking statements including economic and other conditions in the markets in which we operate, risks associated with acquisitions and dispositions, competition, seasonality and the other risks discussed in our Form 10K and our other filings made with the Securities & Exchange Commission.

With that I’d like to turn the call over to Sal.

Salvatore Iannuzzi

Thank you Bob. Good afternoon and welcome to our first quarter 2009 conference call. On today’s call I will address the global economic environment, our first quarter highlights and operating performance and also some general comments about the long-term opportunities we see for Monster. I will then turn the call over to Timothy Yates, our Chief Financial Officer, who will discuss the quarter’s financial results in detail. Following my summary remarks we will then take your questions.

Over a year now we are talking about a deteriorating economic environment on these conference calls. What began as a slow down in the U.S. in December 2007 as you well know has now spread to a full-scale global recession. Unfortunately, we have seen a continued deceleration across all geographic regions and most, if not all, industries as customer demand for online recruitment advertising continues to fall.

Europe has now caught up with North America and the major markets in Asia are also facing sharply lower GDP and weaker employment conditions. As we look at our business there remains a great deal of uncertainty as to where the economy goes from here. This much I can say. We are operating in unprecedented times and nobody knows how long the global economy will remain depressed.

Global labor demand year-over-year is sharply down. That said, we are beginning to see a few positive signs that leave us cautiously optimistic. The Monster employment index over the past several months has shown signs of stabilization. In contrast to last fall when the indices was deteriorating dramatically with every successive month.

We are certainly not yet declaring a clearly defined pattern of improvement. If these early positive signs are correct, we are very well positioned to take advantage of the opportunity. If this proves to be an only a temporary pause and the economy continues to falter, then we are well prepared to take additional aggressive action to protect the Monster franchise.

When I took this job, nearly two years ago, my first order of business was to reorganize, rebuild and re-energize the company. We couldn’t have predicted that a deep global recession was right around the corner. In hindsight many of these changes we have made were exactly the right things to do to weather the recession. I am proud of the way we have positioned the company to capture growth on the rebound.

Despite the ongoing global recession we made solid progress on implementing key initiatives that will continue to transform Monster and benefit our customers now and during the economy recovery. As you know, in early January we successfully launched our new seeker experience on 30 sites covering 24 countries in 14 languages. Truly an unprecedented feat in our industry. It was a culmination of our new Monster vision and we couldn’t be more pleased with the response of seekers and employers.

Following the official launch on January 10th we experienced an immediate and ongoing improvement in key engagement metrics. With a full quarter of feedback to study, here is what we know. The new site has made the process to becoming a new member 73% easier, reducing the number of steps to create a new account from 15 to 4. For resume creation the process has become 80% easier and as we reduce the number of steps over 20 to 4 in virtually every country where we have implemented the changes we have seen very significant improvements in all our key performance indicators.

I would also like to take the opportunity to provide an update on the integration of our advanced search and match capability into our new existing platform. Last year we acquired Trovix to further ramp up our internal technology that allows employers to access better qualified candidates and provide seekers with more targeted searches.

All indications are that Trovix will provide dramatic improvement in results and we are confident we will execute on full implementation by the end of the year with a customer beta roll out in May. We expect that the already improved engagement metrics on the site will continue to dramatically improve as the Trovix technology comes on line.

We have also become far more innovative and efficient in advertising and promoting the Monster brand around the world. While our overall marketing expenses are down from last year, we were very active during the quarter in promoting our new products and rebuilt site through TV advertising and non-traditional promotional platforms. After a five year absence, we made the decision to return to our roots and advertising on the Super Bowl. This year’s event was the most watched game in history and our new site was promoted in front of approximately 148 million total viewers across 230 countries.

The advertising was critically acclaimed in post game round ups as a winner and was mentioned in thousands of press kits across the country. That exposed our brand to another 258 million people. We also signed an agreement with the NFL to become an official sponsor of the league and kicked off an unprecedented promotion that is already generating significant additional exposure for the Monster brand.

Within the first two weeks of launching our promotion we generated 1.1 million incremental page views to the Monster site and exposed a whole new group of people to the site and innovative new products. This is why we believe the investment in the Super Bowl was important and effective in keeping the brand strong and refreshed.

Given the deteriorating U.S. economy and the increase in unemployment in the fourth quarter we responded quickly by launching the innovative Keep America Working Program, a nationwide tour of 140 state of the art career fairs designed to unite job seekers with employers. In only eight weeks we launched a proprietary approach that breaks the mold of traditional career fairs. Rather than charging our customers to promote their jobs we made a strategic decision to allow employers with available jobs to promote them free of charge.

With just 10% of the tour completed we are proud to say we have connected over 475 employers looking to fill 7,000 jobs with nearly 15,000 qualified job seekers to date. We have generated tremendous positive media coverage nationally and locally, helping to raise awareness far beyond the dollars we invested, attracting thousands of job seekers and countless resumes to the site in an extremely cost effective manner.

The New York City Fair, attended by almost 4,000 job seekers received both national and local coverage across network TV and influential online and press outlets. In the coming months we will continue to explore innovative and efficient marketing programs to drive our business.

Despite the much reported industry slow down in Internet advertising our IAF business is back on track. We have put a new emphasis on aligning this business with our core product and technology and we are focused on quality advertising relevant to the users we serve.

In the first quarter revenue was up 6% over the prior year on a lower cost basis. I am pleased by the strong results in a very tough environment. Affinity Labs has also performed well and has enabled us to develop a deeper and more meaningful presence in several professional, vocational and vertical communities. In the U.S. our Police Link and Gov Central sites are number one in serving the law enforcement and government employee communities respectively. Nursing Link and Fire Link have become strong number two’s in the communities they serve and they continue to gain ground.

We are continuing to transition all education properties onto the Affinity platform. The transition of Fast Web has been completed which has allowed us to reverse the financial decline of that property and we are in the process of completing transitions of Affinity and These transitions will allow more revenue growth and much better user engagement.

As you know, we completed the acquisition of China HR in October 2008 and immediately began the process of transforming it into a fully viable commercial enterprise. The process of integrating China HR to Monster’s operations and financial control has been going extremely well. This has allowed us to break even in Q1 and we have identified areas of investment which will help fuel long-term growth.

It is important to note that while we are grateful to have attained this level of performance in advance of our original plans there will no doubt be future quarters where profitability will be negatively impacted by some of the necessary investments we plan to make.

From a financial standpoint our priority has been and continues to be preservation of liquidity and holding a tough line on operating expenses without compromising necessary investments while expanding our market share. We ended the first quarter with total cash and securities of over $500 million or approximately $250 million net of debt.

We generated $27 million of EBITDA at roughly an 11% margin. This clearly shows the robustness of our business and that even under these difficult economic conditions we still generate cash.

This quarter we have made decisions which impact the compensation of all our employees. Merit increases, 401K contributions and cash incentive compensation have been suspended for this year. Any incentive compensation for 2009 will only be paid in the form of full-year vesting equity. While in the short-term this is a sacrifice for our employees, these actions are in keeping with our fundamental belief that employee and shareholder interest should be closely aligned. In the long-term these actions ensure that our employees will share in our growth as the economy recovers. It is also important to note that after our last annual equity grant over 60% of our employees hold equity in this company.

Since we began to restructure the business in late 2007 we have reduced organic operating expenses substantially. This quarter OpEx was $52 million below prior year. We have done this while making substantial investments in marketing, sales, technology improvements, functions critical to growing market share. We are not waiting for the business to come to us. We are aggressively seeking ways to generate sales and reduce costs and we will continue to do that.

We have created a culture of innovation at Monster and it is driving our overall value proposition through these challenging times. We have made some great strides but we still have a lot to accomplish. We anticipate that business will continue to be under near-term pressure. For how long we are not certain. We will continue to align our sales, revenue and cost structure. Our plan is to avoid dramatic and drastic cuts in critical areas that can stunt the long-term growth and continue the momentum we have established so we can come out of this recession leaner, stronger and more powerful than every before.

The real art form is not indiscriminate cost cutting. It is about managing cost while building for the future. That is exactly what we are doing to continue investing in the future of our company. For example, finding a new head of marketing reporting to Ted Gilvar, in Europe. We are recruiting a new head of business in Spain and we continuously search out quality talent for all phases of our business.

Lastly, we are well down the road on executing on our joint venture with News Corp in Australia. The current site, CareerOne, continues to be the fastest growing job board in Australia in terms of unique visitors and its transition onto Monster’s technology platform over the coming months will provide a significantly enhanced offering to our customers.

Monster’s future is solid and I am extremely optimistic about the potential for this company despite the current economic uncertainty. We are positioning the company for long-term growth and market share gain.

Tim why don’t go through the numbers.

Timothy Yates

Thank you Sal and good afternoon everyone. First I will walk through our pro forma income statement while highlighting the adjustments which reconcile to the GAAP results. I will then provide some additional comments on operating expenses, briefly discuss the results of our operating segments and finish with our cash flow and liquidity position.

First quarter pro forma revenue was $255 million consistent with the expectation provided on last quarter’s conference call and down from an all time high of $366 million reported in the 2008 first quarter. Our careers business continued to be significantly impacted by the deepening global economic recession. During this time we believe we have successfully expanded our global market share.

In the quarter currency rates negatively impacted the top line by approximately $27 million. Excluding the effects from currency and the contribution from China HR organic revenue declined 26% compared with last year. Non-GAAP operating expenses were $255 million, down 21% or $68 million over the prior year period and up slightly over the fourth quarter 2008. After taking into account approximately $25 million of currency benefits and the operating expenses of China HR we have reduced organic operating expenses by approximately $52 million while as Sal mentioned still maintaining strategic investments in the business.

Our ability to reduce operating costs given the recession’s impact on the top line enabled us to essentially break even for the quarter. Interest and other income was $1.2 million for the quarter compared with $7.4 million last year. The reduction was due to the negative spread incurred from the draw down of our revolving credit as well as from lower market interest rates.

Our effective tax rate was 33%, down slightly from the 2008 fourth quarter. Pro forma earnings from continuing operations was essentially break even for the quarter compared with income from continuing operations of $30 million or $0.25 per diluted share in last year’s first quarter.

I will now review the impact of the $15 million in pro forma adjustments recorded in the first quarter that reconcile our GAAP and non-GAAP results.

They are first $11 million of restructuring costs which consists of $4.6 million of severance related expenses, $3.7 million of non-cash asset write offs and $2.7 million related to consolidation of facilities and other related costs. Second, $3 million of legal fees related to stock option litigation. Third, a revenue adjustment of $1 million related to the purchase accounting for China HR.

The restructuring charge reflected in our income statement this quarter represents a continuation of the plans that we initiated back in mid 2007. We are approaching the end of that restructuring program which has to date yielded $44 million of charges versus the $55-70 million we had originally anticipated. On a GAAP basis, revenue for the quarter was $254 million, operating expenses were $269 million and the loss per share from continuing operations was $0.09.

Now I would like to take a closer look at our operating expenses in the quarter. To recap, total non-GAAP operating expenses were $255 million. As we signaled on our last quarterly conference call marketing expense, while down 34% compared with last year’s first quarter, increased sequentially to $74 million. Marketing expenses in the first quarter included approximately $27 million of incremental spend to support our successful global product launch which occurred in January. We partially offset these incremental costs with reduced advertising in other areas. Incremental marketing costs will not recur in any future quarters throughout 2009.

In addition, China HR incurred lower marketing costs this quarter. As we integrate China HR and when we begin to see a rebound in the China market we would anticipate a modest step up in China HR marketing costs. We will continue to assess the appropriate level of global marketing spend in light of the current market and business opportunity.

Excluding the $27 million of incremental advertising and promotional costs operating expenses declined 9% sequentially. We continue to exercise fiscal discipline and discretionary expense spending across the organization. Specifically in the first quarter on the salary and related line, seasonally higher compensation related costs were more than offset by lower sales commissions, lower incentive compensation which I will discuss in a moment and further tightening of our global work force.

Excluding China HR, we ended the first quarter with almost 400 fewer associates compared with the fourth quarter 2008. We also reduced headcount in China by nearly 300 full time associates and a significant number of temporary employees during the first quarter. As a result, total headcount declined 10% sequentially.

In the office and general line we continued to focus on areas such as travel and entertainment expenses, consulting services and general office costs. These were the main drivers of the 14% sequential decline in office and general expenses.

In response to the weakening global recessionary environment we recently took substantive actions to control our operating expenses. Amplifying Sal’s comments, we have essentially curtailed hiring and will be extremely selective in back-filling critical positions. This action contributed to the lower headcount in the first quarter and is expected to continue.

We have eliminated merit increases for global associates for 2009 which avoids future costs. We have decided to award any 2009 performance compensation in four-year vesting stock as opposed to cash. This action applies to the vast majority of our global work force with the exception of a small number of associates who have local plans. As a result we have accrued minimal bonus provisions for the first quarter of this year and this will continue throughout the remaining quarters in 2009. This action is the largest contributor to the cost reduction initiatives we have implemented.

Lastly, effective in April the company suspended payments to its 401K plan for U.S. associates which will begin impacting our results in Q2. These actions all support the important objective of conserving cash in future periods. The majority of these benefits that I have just discussed are reflected in the first quarter results and will lower operating costs throughout the remainder of the year. The full year impact of these actions will be approximately $35-40 million and we will avoid additional salary and related costs in the $10 million range.

Turning to our non-GAAP segment results, revenue from the combined career segments was $224 million a 34% decrease from the prior year period. Excluding the currency impact and the contribution from China HR the organic decline was 29%. The careers operating margin was 4.7%. Within the operating segments, the recruitment advertising market in North America continued to decelerate in the first quarter. In this environment North American careers revenue declined 35% to $119 million in the quarter. However, through cost reductions and efficiencies we generated an operating margin of 2.6%.

Our international business generated revenue of $105 million reflecting the accelerated slow down across all countries and geographic markets in Europe and Asia. As a result of the strengthening U.S. dollar the international segment was negatively impacted by approximately $26 million of currency effects. On an organic basis, our international revenue declined 22% and the operating margin was 7.1% in the quarter.

The IAF business generated revenue of $32 million in the quarter, a 6% increase over the prior year driven by our and Affinity Labs properties. Our main revenue sources, lead generation and display advertising both made contributions to the increase. The operating margin was 12.7% in the quarter.

A top priority in 2009 is to manage the business for cash and preserve liquidity. Monster ended the quarter with cash and securities of $501 million and total debt of $254 million. In February we made the decision to draw the remainder of our credit facility as an insurance policy. On a pro forma basis EBITDA was $27 million in the quarter resulting in a 10.5% EBITDA margin compared to 16.7% in the prior year. Cash flow from operating activities was $14 million in the quarter and capital expenditures were $15 million, the lowest level since the third quarter of 2007 representing a gradual decrease in certain investment project spending.

Deferred revenue was $345 million, a 34% decline over the prior year period and a 17% sequential decrease reflecting a lower volume of overall business. As a result, we ended the quarter with net cash and securities of $247 million, a slight decrease from the $259 million reported at the end of the 2008 fourth quarter.

Looking forward and based on our current plans we expect cash to build as a result of increased levels of EBITDA through the rest of the year. We believe that our liquid balance sheet provides a solid competitive advantage in this difficult economic environment. We are fortunate to have the financial flexibility to support our objectives.

So to summarize our financial performance in the quarter, revenue was down due to the dramatic global economic slowdown but in line with our expectations. Operating expenses decreased significantly, generating a break-even quarter on a non-GAAP basis. We generated cash flow from operations and cash was preserved. Finally the balance sheet remains strong.

Looking forward, we are providing the following comments with respect to the second quarter of this year. While we believe that we are beginning to see early signs of bottoming in a number of key indices, the environment remains very uncertain. As our business begins to bottom there will be a lag in revenue as a result of the lower balance in deferred revenue from prior quarters which you have seen.

Therefore, based on current visibility we anticipate that second quarter revenue will decline sequentially at a similar rate as we experienced in this year’s first quarter. Backing out the $27 million of incremental marketing costs in Q1 and based on our current view for revenue and operating expense we would expect pro forma EBITDA to be flat to slightly up in the second quarter compared to the first quarter.

I will now hand the call back to Sal for his closing remarks.

Salvatore Iannuzzi

Thank you Tim. Our opportunity is absolutely huge. As a global industry leader by our estimates we have only a few percentage points of the total market and have resources in place to not only grow our market share around the globe but also expand into adjacent markets as appropriate.

We know that the economy will recover and the job market will improve. When it does the need for talent will become greater and Monster is uniquely qualified to serve the need. Our value proposition is getting stronger and we believe we are on the right track to widen the gap between Monster and the competition. I would like to thank our global associates, customers and shareholders for their support.

I am particularly appreciative of our dedicated associates who deserve recognition for their efforts during these very difficult times. Now I would like to open it up to questions.

Robert Jones

Operator, we will take our first question.

Question-and-Answer Session


(Operator Instructions) Your first question comes from Toby Summer – SunTrust Robinson Humphrey.

Toby Summer – SunTrust Robinson Humphrey

I wanted to ask you a question about your marketing expenses and ability to continue to generate cash particularly given the fact that revenue won’t necessarily coincide with signs of bottoming if indeed we get that in the near-term because of the impact of the deferred revenue flowing through?

Timothy Yates

The numbers part of it we are going to, we have talked about the $27 million of marketing spend in Q1 which was specifically aimed at the launch. So that will go down as I mentioned in my comments basically more than that plus some other activities we anticipate would more than offset the decline in revenue which we are talking about due to the mismatch. Ted or Sal want to comment on what the remaining level of marketing is and do we feel that is adequate based on what we see?

Ted Gilvar

We will continue to spend at a rate taking that $27 million out for the remainder of the year and we do see that as an adequate spend given the way we are going about things. Not only are we using efficient methods to market but we are also doing many innovative things that Sal mentioned earlier on that are actually extending the value of the money we are spending. So far that has worked quite well.

Salvatore Iannuzzi

I think I am probably just going to repeat what has already been said. We mentioned last quarter the additional spend if you will from what had become sort of a normal rate given the economic circumstances of somewhere in the low 50’s and we would return to that level after Q1. The Q1 was an aberration, the aberration being as Tim said the $27 million. We are also benefiting significantly from the fact we are getting smarter. We are getting smarter in terms of using, as Ted just referred to, new ways of getting our message out there and getting our message across. That is proving to be very effective in saving us considerable dollars.

So I think that given what we can see on the horizon and we are trying to stay ahead of this that we should be able to reduce marketing costs and other expense reductions. It is not all about marketing costs. We within reason can maintain the position of the company where you have seen it this quarter.


The next question comes from Mark S. Mahaney – Citigroup Smith Barney.

Mark S. Mahaney – Citigroup Smith Barney

I know there was a lot of emphasis on the marketing programs. There was also a lot of emphasis over the last four or five months on the basic product itself, both the employer facing and the consumer facing. Can you talk about what you are seeing or what are the things you are tracking internally to judge the effectiveness of those changes? Not the marketing but the specific product enhancements that you have made?

Salvatore Iannuzzi

I’m going to turn that over to Darko and let him give you what the results he has seen.

Darko Dejanovic

We measure a number of metrics across the globe per country. Those include resumes per visit, profiles per visit, searches, supplies, etc. and we have seen ever since post re-[doc] or the launch of the new site on January 10th those numbers being significantly increased. Anywhere from 20-50% depending on the country. Usually in the past whenever we would make changes to the site you would see small, incremental changes in the single digits. Clearly the launch that we had in January has resulted in very significant changes in those metrics.

Salvatore Iannuzzi

I think we are extremely pleased. When you start out to do something as broad as what we did and please keep in mind it is only the first step in a long list of projects and directions we are taking the company. I think the results so far have been very reassuring. I think the fact the engagement metrics have risen dramatically we have looked at them, we are probably our strongest critics. It is very easy in this environment, as you know, there is a lot of people looking for jobs and you can interpret the results as being simply as a result of a lot more people looking for jobs. But the statistics are so strong and so high that even if we discounted them by 50% the results are still very robust and very encouraging. So again, we are very happy with what has happened with what we have done. We plan to continue it.

Darko Dejanovic

Let me just add a couple of more things. As we look at, irregardless of traffic, we look at those metrics per visit and the engagement obviously being significantly increased post-launch, we also look at the click through rates on the advertisements that is significantly higher as well. That is all in the core Monster. As Sal mentioned in the introduction we also made a number of changes on our IAF properties and we are seeing some of the similar engagement metrics both in duration of how much time people spend on site as well as the revenue percent of these users going up as we made product changes on the IAF side as well. So these engagement metrics have been very, very good.

Salvatore Iannuzzi

Again, just to give you a little bit more color, we have metrics that show that for example new accounts in the U.K., just picking that one as an example, we are up 71%. If you look at Germany we are up 92%. If you look at unique visitors we are up 29% in Germany, up 25% in the U.K. Job searches we are up 71% in the U.S. The numbers across a very broad spectrum are so robust and the numbers I am giving you by the way are sequential. So obviously the economy was weak in Q4 of last year. The results that we are seeing are immediately following the implementation of the new site. I don’t want to overstate it, first of all because I don’t want Darko and his team to ask for a raise, but we are really encouraged by what we are seeing. I think that as Trovix and with other projects, other initiatives that we have in place, come forward that this trend will continue and I am hopeful it will accelerate.


The next question comes from Mark Marcon – Robert W. Baird & Co.

Mark Marcon – Robert W. Baird & Co.

I was wondering if you could talk a little bit more about the Trovix technology and exactly what form that is going to take and how long you anticipate the beta being out and how many clients will it be at and when will it finally be on a broad basis?

Darko Dejanovic

The beta is going to go live I believe the exact date is May 16th. We are going to roll it out to 150 customers. We are going to run it for a few weeks, see how the customers respond, make any necessary changes and as Sal mentioned earlier in his notes between now and the end of the year we are planning to roll it out across all our customers here in the U.S. On the seeker side we are planning to roll out Trovix technology sometime in the summer time probably early Q3 or so and we are going to do something very similar as the other sites. We will roll it out, have a beta version out there along with our current search and at some point switch it over to a Trovix powered search exclusively.

Let me comment on what we are seeing in general terms in terms of how technology is performing. We think it is a very superior technology to both our existing capabilities today as well as our competitors’ capabilities and we think it is going to change the way search is being done in general for the entire industry. So we are very encouraged and as I said May 16th the first set of customers along different industries, different sizes and then we will roll it out in subsequent months to the rest of the population here in the U.S.

Salvatore Iannuzzi

Just a little bit more commentary on Trovix. Many of the features and much of which is going to be rolled out in mid-May as Darko indicated was actually ready to be rolled out in April. As we have done before, Darko, myself and others around this table and others that are not at this table discussed that. We looked at other features we could include and decided to push things around by a few weeks. We will continue to do that during the year. The thing that we are seeing that we are very encouraged by is as we expected when we bought Trovix and now we have been able to test on a much more robust basis, put aside the beta that is going to happen in May. We really are encouraged. The results that we have seen are very different or very significant and I think that it will position Monster to really have product that differentiates itself from the rest of the industry in a very real way. So I think the next 6-8 months are going to be very exciting for us and for our customers as we roll this out.

Darko Dejanovic

As Sal mentioned we spend a significant amount of time scaling the technology and we are ready to roll it out. In addition, obviously integrating the technology to the experience that exists on the current Monster site and finally it is not only that the search results are significantly better than what we see today in the market place, the way that the search is displayed and the functionality around it that is given to the employers is very different which we think is going to be very beneficial in the way they perform their jobs. Overall we think it is going to be a great experience.


The next question comes from Christa Quarles – Thomas Weisel Partners.

Christa Quarles – Thomas Weisel Partners

I was wondering if you could talk about your pricing philosophy right now, how much discounting is going on? Is it happening at the point of sale? Do you feel that you would be able to raise prices as quickly as you need to in an upturn if in fact you are aggressively discounting now?

Salvatore Iannuzzi

I think that first of all there is no question the competition is stiff. There is, and one of the methods for the competition to present itself is with regard to pricing. My greatest interest right now and we have said it repeatedly is market share. I think that with the products we have introduced and the products we plan to introduce, I think the cornerstone of any business and certainly this one, is the strength of the technology and the innovation that we present to our customers and the benefit it gives them. The more I can have an opportunity to show that to my customers I think in the long run we will not only equal but pass by the competition in a very real way.

What I have encouraged our sales force is to take market share as much as possible. Having said that, I will also tell you that there are price levels below which we are not willing to go. We are not giving away the product. We are reaching in where it is appropriate, where we see real advantage for Monster and for our shareholders for the future but not in all cases. We see numerous cases out there where there are a lot of false promises being made to customers and for prices that are really unrealistic. Then we are seeing customers after they have been, it is understandable customers are tempted by that, and then they come back to us.

I think at the end of the day the value proposition that Monster is presenting and will present is such that it will allow us to win the game if you will. So that is our position. That is where we are going. You are right. There is a lot of competition out there and I think quality of product will win at the end of the day.


The next question comes from Monica DiCenso – JP Morgan Securities.

Monica DiCenso – JP Morgan Securities

I was wondering if you could give maybe a little more color on what you are seeing in some of the larger global markets? Both maybe in terms of sentiment from employers and what your sales people are telling you as well as maybe where you see some competitive opportunities in the future?

Salvatore Iannuzzi

I think what we are hearing from customers if I understood the question correctly, hearing customers globally is we are starting to see here in the U.S. and in Europe particularly signs that it is not the doom and gloom we were seeing in Q4. Now again that may be just a pause. We are certainly not going to sit here today and say things are on an up swing and we are moving forward from a revenue perspective. But there are certainly signs of interest. There are signs that companies are starting to think about hey this recovery is going to come at some point. What am I going to do about it? How am I going to take advantage of it? How am I going to build my resources to meet it?

So we are hearing some of that. I don’t want to over state it. I don’t want to overplay it. We are seeing some signs of it. I can tell you in Asia, particularly in China, the Chinese government is very proactively working at creating employment opportunities and getting their people back to work. The manufacturing sector in China has slowed down very significantly over the past I would say 6-9 months and so we are seeing some signs there that business will pick up and I know discussions we are having on a number of levels that should present some opportunity over the next 6 months, 12 months, something in that vicinity. It is very hard to peg these things to a particular point in time.

I think in terms of opportunity as I said before I really do believe the opportunity is absolutely huge. Monster is the only company, regardless of all the rhetoric that is out there and I am constantly fascinated in this business and this industry with how many people seem to be out there that feel they can comment on it, but I think that the reality of the situation is that Monster really is the only company out there that has the global reach where it can really service companies on a truly global scale and we can go into countries if there is a need and a country we are not in we can go in and we can go in fast. We have the capability, the technology and the people and service our clients.

I think as I said in my comments earlier I think, and believe me I take absolutely no credit for this in the sense of that we knew it was coming, but we really made the right decisions at the right time to invest, rebuild our technology, strengthen our sales force, reorganize our sales force and the company in general that I believe as we come out of this and your guess is as good as mine if it is starting now or is it starting in six months or 12 months. When it happens there is no company out there that can present the value proposition on as many fronts as we can to service the people’s human resource needs.


The next question comes from John Janedis – Wachovia.

John Janedis – Wachovia

Sal this is a follow-up to your last comment. I am wondering as budgets came up for renewal over the past few weeks did you see a lessening of declines from customers versus Q1 and did it vary much from the U.S. to abroad?

Salvatore Iannuzzi

I think that what we are seeing and it has been changing and evolving I guess is the best way to describe it, certainly from last quarter into this one and now we are into Q2. You see signs that people are thinking more in the long-term. I keep hedging this, and I want to really throw caution to it that I don’t want anyone to really read too much into it. We are certainly not. We are just observing it and watching it real carefully. We are seeing signs that people are not as hesitant to commit for a year out. That they know they are going to have needs. People are also preserving their right where companies rather instead of…they may be signing up for a year contract at a significantly reduced amount of product but reserving their right to come back during the year to add to their buy.

So we are seeing some of that going on. They want, of course and understandably so, they want to preserve their price. So I guess in general and I know this is imprecise there is just a general sense of increasing optimism out there and a little bit more willingness to commit than we were seeing previously. Q4 we just were not seeing any glimmer of people willing to take any risk or step out. You are seeing a little bit more right now.


The next question comes from Tim McHugh – William Blair & Co.

Tim McHugh – William Blair & Co.

I am just wondering if you can talk about the reaction of your customers…you talked a lot about the traffic trends and how that is performing since you have made the website changes. How is that impacting your discussions with the customers? In a positive way or does it not make any difference?

Salvatore Iannuzzi

I think that it certainly has made a difference. First of all, there is absolutely no question two years ago when we came into Monster we had severe criticism of the fact that Monster had not innovated or shown any change to the seeker or to the employer side of the equation in a number of years. Thankfully there was a significant degree of customer loyalty but customers were basically telling us look we are running out of patience. You are not listening to us. You are not listening to what our needs are and what is changing. If you don’t show us some change we have no choice but to go elsewhere. That was basically the message we were getting.

Again, I certainly don’t want to overstate it but the things that we have done I think our employers have seen that we are very serious. I think they find the tools we have provided them useful and beneficial. They are engaging with us. I think the fact it is extremely important what we do with regard to the product and the technology. Also what is very important is it will be done on the sales side. The training and the addition of people that can go into a customer and articulate what the product is that we are offering and what it can do for them. You couple that with the messaging we have given into the market, combine that with what we are doing in customer service where there is now somebody to answer the phone that they can understand, and you bring that all together and it is a whole new engagement process with the customer that we simply did not have two years ago.

Now having said all that we are by no means done. We have done a lot of work but we have a lot more to do. I think as you might expect and any time you turn anything or bring something forward the momentum builds. It is sort of like a snowball going down a hill. The more we are doing the more we are learning. The more we are learning the more we are delivering. Really the toughest issue we have right now is how many things, we do have restrictions you know the economy is certainly not helping us in terms of giving us the dollars to do everything we can do, so it is selecting, executing and delivering as fast as we can all the things that we have in front of us.

To be honest with you it is a great problem to have. I think that everything we are getting from the customer and the fact that we clearly believe now, last time we talked about it and we were hedging quite a bit. I’m still hedging but we are gaining market share now. We clearly see it. We see it in terms of the numbers. The numbers are showing us that while we are declining and the economy is causing us to decline, we are declining less than the competition. Okay? It is discernible. It is not that we are just within a percentage point and it could be anything. The numbers are significant enough that you can see a trend starting to build.

When you look at deals and transactions on the transactional level when I am having discussions with our sales force what you are seeing is that if there is a customer that has for example a $400,000 spend, previously that spend was between Monster and one or two of our competitors. That spend now is entirely with Monster. Previously it may have been a million dollar spend and now it is only $400,000 but we are getting it all.

That is what is driving back to Chris’ question a few moments ago. That is creating a lot of pressure and a lot of price competition at prices that sometimes are stunning and you almost wonder why people are doing business at those levels. It just doesn’t make sense. But what we are also seeing is our customers even with the low-balling of prices that is going on, customers are walking away from the competitors and bringing more business to Monster. It is not all about price. It is about delivery. It is about delivery of service, execution, a belief in what tomorrow is going to bring. A lot of things are going on. So we are very encouraged by that at this point and again time will tell. We are seeing some pretty good signs right now.

Robert Jones

With that I would like to thank everyone for joining us this evening for our first quarter 2009 conference call. You can access the call on the Investor Relations section of the Monster Worldwide website. As always please feel free to call me any time at 212-351-7032 with any further questions. Thank you very much.


This concludes our conference call for today. You may now disconnect your lines.

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