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Monster Worldwide (NYSE:MWW)

Q4 2011 Earnings Call

January 26, 2012 8:30 am ET

Executives

Sal Iannuzzi - Chairman, Chief Executive Officer, President and Member of Special Litigation Committee Addressing Civil Litigation Matters

Lori C. Chaitman - Former Vice President of Investor Relations

James M. Langrock - Chief Financial Officer, Chief Accounting Officer and Executive Vice President

Analysts

Neil A. Doshi - Citigroup Inc, Research Division

Glenn Greene - Oppenheimer & Co. Inc., Research Division

John R. Blackledge - Crédit Suisse AG, Research Division

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

John Janedis - UBS Investment Bank, Research Division

Timothy McHugh - William Blair & Company L.L.C., Research Division

James J. Janesky - Avondale Partners, LLC, Research Division

Operator

Good morning. My name is April, and I will be your conference operator today. At this time, I would like to welcome everyone to the Monster Worldwide Q4 2011 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to Ms. Lori Chaitman, VP of Investor Relations. Ma'am, you may go ahead.

Lori C. Chaitman

Good morning, and thank you for joining us on Monster Worldwide's Fourth Quarter 2011 Conference Call. We will have formal remarks from Sal Iannuzzi, Chairman, President and Chief Executive Officer; and James Langrock, Executive Vice President and Chief Financial Officer. In addition to Sal and James, several members of our executive management team are available to answer your questions during the Q&A part of the call. They are Tim Yates, Andrea Bertone, Ted Gilvar, Patrick Manzo, Michael Miller, Lise Poulos and Mark Stoever.

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 laws. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company’s strategic direction, prospects and future results. Certain factors, including factors outside of our control, 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 or dispositions, competition and the other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission.

With that, I'd like to turn the call over to Sal for his comments. Sal?

Sal Iannuzzi

Thank you, Lori. Good morning, and welcome to Monster's Fourth Quarter Conference Call. 2011 was a year of mixed global economic performance. On the positive side, for the first 3 quarters of the year, global GDP grew moderately. And in that environment, bookings grew 25% on a comparable year-over-year basis. Earnings and cash flow significantly improved.

As anticipated, the fourth quarter, however, was a period of heightened economic uncertainty, largely fueled by fears of euro area destabilization. This anxiety caused slower global growth and concern that there would be another recession in 2012. In that environment, as anticipated, since our clients buy for the year ahead, fourth quarter bookings growth decelerated and was essentially flat on a year-over-year basis.

Summarizing our financial results for the full year 2011, bookings increased 16%. Revenue increased 18%. EPS was $0.37 compared to a loss last -- of the year before of $0.07. Operating margin was 7%, and approximately 55% of incremental revenue dropped to the bottom line. EBITDA for the full year was $192 million compared to $109 million in 2010.

During the fourth quarter, bookings were basically flat on a year-over-year basis. Sequentially, bookings increased by over $50 million. Revenue was up 2% on a year-over-year basis, but was somewhat lower than we had anticipated coming into the quarter as a result of increased number of multiyear deals. While the short-term consequence of a multiyear deal is to lengthen the period of time over which revenue is recognized, over the longer term, it will result in a larger multiyear backlog as our clients commit to our products for the longer term. This is a trend which we expect will increase in the years ahead. EPS was $0.11 versus last year's $0.06. Operating margin was 8%, an increase from last year's 5%. EBITDA was $47 million.

Summarizing 2011, we believe that in a mixed economic environment, our performance clearly validates a number of our key initiatives, as well as continuing concerns. Our innovative new products are being well received by our clients. While the flat year-over-year booking performance in the fourth quarter is disappointing compared to our performance over the prior 7 quarters, we believe that our new products certainly soften the deceleration and contributed to the full year 16% increase.

For the full year, around 55% of our incremental revenue dropped to the operating income line, demonstrating the operating leverage of our business model. We have proven that during a reasonable economic environment, the business, on a global basis, has significant growth potential. Full year bookings were over $1.1 billion, a $300 million increase or 38% from the depths of 2009.

During the year, we estimate that we did business well in excess of 200,000 clients on a global basis. However, the flat booking performance in the fourth quarter indicates that our business is not immune to the economic and employment cycle. While the core Monster business has always been highly influenced by the employment cycle, some of our new products, for example, SeeMore, have been designed to be less sensitive to the economic cycle, and we expect to benefit from these differentiated offerings over time.

Turning to 2012. The macro economic outlook remains uncertain. On the one hand, there is an expectation that U.S. economy is picking up, that Europe will find a solution to the current debt crisis and that China will have a soft landing. On the other hand, there was an equal view that Europe cannot escape an inevitable solvency crisis, that this crisis will cause a global slowdown which will negatively impact the U.S. and Asia. The important point is that right now, there is no consensus view on which way the economies will break. As a result, as we commented last quarter, clients continue to hedge their bets, particularly in the recruitment area, and this is having a negative impact on our near-term outlook.

Faced with this continuing conservatism from our clients, we currently expect that bookings for the first quarter will decline by 6% to 10%. Revenue will decline by 3% to 7%. EPS will be in the range of breakeven to $0.04. As we commented last quarter, we are positioning the company both offensively, to be able to take advantage of market opportunities as they develop, and defensively, to protect our profitability and cash flow if the economy deteriorates further.

As noted last quarter, we have been planning and are now implementing a reduction in operating expense of $100 million on an annualized basis. Most of this reduction comes from non-sales and marketing areas and will result in a headcount reduction of approximately 400. These reductions will result in a restructuring charge between $30 million and $40 million. James will provide more detail in his commentary.

These are difficult but necessary steps to accomplish 2 major objectives. First, since we are starting the year with a lower expense run rate, we will be much better able to match our expense levels to market conditions as the year evolves. Second, since most of the expense reduction comes from non-marketing and sales areas, we will have the flexibility to spend more in marketing and sales to drive bookings while retaining tight control over operating expense.

As a result, in our basic planning scenario, which calls for moderate economic growth and a slow reduction in uncertainty, this expense program will allow us to increase investment in marketing and other targeted growth areas while limiting the annualized increase in operating expense to low single-digit percentage growth. In a more bearish scenario, in which global economies deteriorate further, we will not increase marketing expense to the degree we are currently planning and will be able to reduce operating expense.

Finally, in the event that we return to a more bullish economic environment, we firmly believe that the business can grow north of 15% per annum. And if we see this scenario develop, we will switch from controlling expense growth in low single digits, as outlined here, to the discipline of dropping 50% of the incremental revenue to the operating income line as we did in 2010 and '11.

Now turning to offense. Our basic objective is to capitalize on our recent product enhancements, and we'll make sure that our clients around the world are offered the optimal solutions for their needs. This will be supported by increased marketing. In order to accomplish this, we will continue to roll out new products to geographies that don't currently have those products, and we will continue to logically enhance our product portfolio to stay a step ahead of the competition, all while tightly controlling operating expense as we have outlined.

I want to address our plans in 3 dimensions: sales and marketing, product initiatives and geography. Specifically, in sales and marketing, we will continue to aggressively pursue market share in our key markets, and we'll support this effort with increased marketing and sales budget. Incremental marketing dollars will be largely designed to bring our new and enhanced product portfolio to our clients through a series of B2B marketing initiatives.

In product, we will roll out our newer products to new geographies, and we'll continue to enhance our product families. This continued rollout is justified by the success of our recent product introductions.

I'd like to give you a couple of examples. Career Ad Network bookings grew 35% year-over-year in 2011 and now accounts for 5% of our Global Careers business. We expect CAN to continue to grow more rapidly than our traditional posting products. Power Resume Search bookings were $94 million during 2011, and we are retaining premium pricing. We have had a successful beta test of the product in Germany and have just formally launched the product. We will launch PRS in the Netherlands in the second half of 2012. These launches confirm the thesis that PRS and, by extension, SeeMore can be effectively adopted to foreign languages with minimum investment.

SeeMore, our next product introduction based on 6Sense technology, is gaining traction. While the product has a longer sales cycle than our traditional product suite, it also has a much higher average contract size. It's still very early, but the interest in SeeMore is high and backlog is growing. We will aggressively support the rollout of SeeMore during the year.

We are pleased with the positive feedback we have received on BeKnown from both seekers and our customers. The first 6 months has been a tremendous learning experience for us, and we have continued to add new features and functionality. Around 3,000 clients have created BeKnown profile pages. In 2012, we will continue to enhance the application and build the existing Jobs Tab functionality. We plan to allocate additional marketing spend to drive adoption.

On a global basis, while we don't anticipate entering any new countries during 2012, we have a number of important ongoing market developments. In Europe, we will protect and grow our leading market positions and are optimistic about building a meaningful business with European governments. Last year, we started an effort to expand our successful U.S. government business on a global basis. Just this week, we have completed a major new contract with a European entity, which is in excess of $20 million. This is an important, initial accomplishment in developing a global government business. This contract is not included in our bookings guidance for Q1.

In developing markets, we will continue our investments in Brazil and Mexico and expect these to be around breakeven going into 2013. We originally closed a multiyear strategic partnership in Brazil with OESP, a major daily Brazilian newspaper. Monster will be OESP's exclusive recruitment partner and provide their online career site. In China, we will accelerate our investment sales platform and product and drive a rapid increase in bookings and revenue and a substantial reduction in the operating loss. In Australia, we are seeing positive momentum from last year's introduction of new products. In North America, we will protect our share of wallet with accounts where we have historically been strong, and we will focus on increasing our share in key verticals where we can improve our performance, for example, in staffing and technology.

Our North American government business is an increasingly important contributor to our overall business. We know that we have solutions, which are much in demand by governments around the world as they develop, as they struggle to improve their productivity and get their people back to work. The government business is an important contributor to the current and anticipated growth in multiyear deals, and we are aggressively expanding on it on a global basis. We have an important first success this week in Europe, and accelerating the development of this business is a perfect example of an area where we may spend additional money if economic conditions warrant.

I'd now like to turn over the call to James for his comments.

James M. Langrock

Thank you, Sal, and good morning. Slide 3 is the fourth quarter pro forma income statement. Bookings were $314 million, essentially flat on a year-over-year basis and a 19% increase on a sequential basis. Please refer to Slide 7, which shows the 2010 and 2011 impact of the changes made to the IAF business. Currency had a negative 50 basis points impact on bookings performance on a year-over-year basis. Revenue was $250 million, a 2% increase on a year-over-year basis and a 4% sequential decrease. Currency negatively impacted revenue by 40 basis points and 220 basis points on a sequential basis. Total operating expense was $230 million, a 2% year-over-year and sequential reduction. Currency favorably impacted operating expense by 40 basis points on a year-over-year basis. Operating income was $20 million compared to $12 million last year and $26 million last quarter. Currency had an immaterial impact on operating income. Interest and other was negative $700,000. Equity loss was $200,000. EPS was $0.11 compared to $0.06 last year and $0.13 last quarter.

Turning to Slide 4. There was a $3 million restructuring charge in the quarter.

Slide 5 shows the trends on pro forma operating expense and headcount. Salary related at a $119 million is an 8% reduction on a sequential basis. The 8% decline results from reductions in incentive compensation, including equity awards and lower salary resulting from a shift in personnel to lower-cost regions. Marketing at $53 million was a 13% increase on a sequential basis. Part of this increase results from an increase in marketing in China. Office and general was $58 million, essentially flat on a sequential basis.

Slide 6 is our bookings and revenue trends. Bookings during the quarter of $314 million were essentially flat on a year-over-year basis. Global Careers bookings were up 1%. In North America, bookings on a year-over-year basis were essentially flat. Strong performance in the government vertical offset the clients in our enterprise and e-Comm channels, as well as in our staffing vertical. In Europe, bookings increased 2% on a year-over-year basis. It continued, but much lower growth in Germany was largely offset by decreases in France, Italy and Switzerland. In Asia, bookings were up 5% on a year-over-year basis as all key countries showed lower growth than recent quarters. India's bookings grew 16%. China's growth was 3%, and Korea was essentially flat. Developing markets continued strong percentage growth, 73% off a low base.

Slide 7 reviews the fourth quarter segment performance. Careers-North America revenue declined 4% sequentially and 5% on a year-over-year basis. Operating margin was flat sequentially at 17%. Revenue in Careers-International segment declined 4% sequentially while increasing 8% year-over-year, reflecting the strong International bookings growth during the first 9 months of the year. Operating margin at 8% declined sequentially from 9% while increasing from last year's breakeven level. Revenue in IAF declined 2% sequentially while increasing 5% on a year-over-year basis, and operating margin was 18%.

Slide 8 highlights a key balance sheet and cash flow items. Pro forma EBITDA was $47 million compared to $43 million last year and $54 million in the third quarter. GAAP EBITDA was $44 million. Net cash provided by operations, following normal fourth quarter seasonal patterns, was $25 million. Capital expenditures during the quarter was $16 million, reflecting increased investment in our China technology platform. Deferred revenue was $380 million.

During the quarter, we acquired slightly over 5.5 million shares at an average price of $7.62, deploying $42 million of cash. In addition, we reduced our revolving credit by $34 million. As a result, net cash at year-end was $61 million, and our total liquidity was $354 million (sic) [$358 million].

The strength of Monster franchise allowed the company to significantly improve all major financial metrics in a year which provided mixed economic backdrop. Specifically, revenue increased during the year $150 million. 55% of this increase dropped to the operating income line. Operating margin increased by 820 basis points. Net cash from operations was $150 million, an increase of $57 million from the prior year, and we returned over $40 million to our shareholders.

Turning to 2012. I'd like to provide some additional detail on the restructuring program. As Sal noted, we have taken action to reduce operating expense by $100 million from 2011's level. In order to accomplish this, we have or will reduce headcount by approximately 400 people, consolidate a number of offices, written off fixed assets and reduced all other expenses, including consulting and professional fees. Most of these actions have been accomplished in January. The estimated cost of this restructuring is $30 million to $40 million. Most of the restructuring charge will be taken during the first quarter.

Sal has provided the economic backdrop for the first quarter, and I would like to reiterate our guidance for the first quarter as shown on Slide 9. We currently expect that bookings will decline by 6% to 10%. This excludes the European government transaction that Sal described. Revenue will decline in the range of 3% to 7%. EPS is expected to be in the range of breakeven to $0.04. Please recall that during the first quarter, we will incur the usual increase in salary and related expense resulting from FICA and that we will not have a full quarter's benefit from the expense reduction program. At the midpoint of the range, we anticipate EBITDA of approximately $30 million to $35 million.

I would now like to turn the call back to Sal for his concluding remarks.

Sal Iannuzzi

Thank you, James. We are positioning the company to thrive when markets improve and to protect our profitability and cash flow if conditions deteriorate. The significant investment in innovative product we have made allows us to drive top line growth, as employment markets improve and places us in a much stronger competitive position if markets take longer to recover or deteriorate. The $100 million cost-reduction program allows us to better match our expense to market conditions as the year evolves while providing the flexibility to shift more dollars to the market to support our new products.

During the fourth quarter, we returned over $40 million to our shareholders. We are well positioned to continue to execute our $250 million buyback program.

Now I'd like to open the call for questions. Operator?

Question-and-Answer Session

Operator

Your first question comes from Jim Janesky from Avondale Partners.

James J. Janesky - Avondale Partners, LLC, Research Division

Can you address both the competitive environment and then discuss how booking trends progressed as the quarter -- as we went from September to December and now into January?

Sal Iannuzzi

Okay. First of all, what we -- as we talked about on our last call, what we started to see is in September, end of August, September, we started to see a decline in bookings, both in the U.S. and then, increasingly so, in Europe. I think that the whole discussion regarding the debt ceiling here in the United States is what started to show that deceleration here in the U.S. The indecisiveness, if you wish, was caused by that issue. And then the -- heightened -- as we went into the fall, the European crisis grew. And that caused Europe to slow down and slowed down very, very significantly. Let me give you some examples of what transpired. Germany, as an example -- I think as most people know, Germany is our biggest revenue or bookings engine in Europe. For the first 3 quarters of last year, Germany grew 53% in bookings. In Q4, its growth dropped to 6%. So it was drastic. It was sharp, and it was in direct correlation to the increasing tempo of the concerns or the lack of direction in Europe. If you take Korea, Korea over the past several years has been growing at a rate of 30%, 35%, as high as 50% in one quarter. Korea in Q4 was flat. What it showed is in Korea, as the U.S. slowed and Europe slowed in business in general, Korea became very concerned about its ability to export products and the vibrance of their markets, both in Europe and North America. So they slowed down. And then I could give you a number of other examples. But if you look at France, if you look at the U.K., if you look at -- even India, you will see the same types of trends, okay. I think going into Q1, at this point in time, we do not see a significant change in that climate. We -- there are -- Europe certainly is, I hate to say it this way, but is sort of status quo to Q4. And with regard to the United States, North America, there are some signs, some positive signs that I guess we all read about. But for every positive sign, there's a negative one that sort of offsets it. So we're sort of in that phase, that it could go up or it could go down, but it's always in the middle. It's wobbling in the middle. And we're really not seeing an appreciable change. In another indicator that we've -- that we always look at very carefully is the e-Comm business. The e-Comm business in the U.S., in Q4 -- and the e-Comm business have been growing in -- certainly in 2010 and going into 2011, at numbers in excess of 25%. But in Q4, e-Comm was down year-on-year, 10%, okay. As you know, that's how -- for the most part, those who are small businesses. And the small business sector is still very sluggish. On a weekly basis, you see a few signs of increased activity there, but very, very slight and, certainly, not enough to hang your hat on that we're going to see anything in terms of the measurable improvement. By the way, that factor contributes to the reduction in revenue. That business converged from sales to revenue very, very quickly. It's virtually simultaneous. Someone buys a small amount, they buy a job posting or a license or a product for our diversity business or what have you, and they use it immediately. So therefore, it's recognized as revenue very quickly. That has dropped, as I said, rather significantly. In terms of competition, the competition is out there. It's status quo in Europe. It's -- in every country, we have a competitor, and every country is a different competitor, okay, virtually. And the competition is certainly there. But we -- here in the United States, it's the same. But there's no appreciable change, if you will, in the tempo of that competition. I think I'm going to anticipate, to some degree, a question that usually comes up is our market share and how we're doing there. All I can say is that, I think, first of all, our products, our newer products today, products that we've introduced within the past several years, okay, account of businesses and products, account for somewhere in the vicinity of 25% of our total business today, okay. So that's a positive sign. And that's why we said in my comments that the amount of deterioration is probably being cushioned somewhat. It's hard to prove, and it's hard to quantify, but is being cushioned somewhat by our new businesses and new products. And what -- really, what am I talking about? I'm talking about the government business, which has grown very significantly. I'm talking about PRS. I'm talking about CAN and a few others. So I think competitively, if I look at what our market share was in '08 and I look at our market share today in '08, we believe our market share was down around 24%, plus or minus, and today, we're upwards of 30%.

Operator

Your next question comes from Glenn Greene with Oppenheimer.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

A few questions actually, but the first one is just a quick follow-up on the last question. But if you look at the 6% to 10% decline in bookings for 1Q, just a little bit of color directionally on what to expect from International versus North America.

Sal Iannuzzi

I think that you're probably going to see, I would say, almost an equal performance between the 2. I mean, they may spread a couple of percentage points. U.S. may be a percentage or 2 above Europe, or the other way around for that matter. But a percentage or 2 could literally be one significant transaction.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

Okay. So very similar.

Sal Iannuzzi

Very, very similar.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

All right. And then for James maybe. The timing of the expense cuts, it sounds like it's happening now, but you're not going to get the full benefit in 1Q. What I'm trying to get a sense for is the EPS guide for 1Q from sort of flat to $0.04. That obviously assumes the higher salary rate going into 1Q, but not the full effect of the expense rate. Is this the low watermark for EPS, would be 1Q all else equal?

James M. Langrock

Well, we're not giving full year guidance, Glenn. But typically, as you know, the seasonality of expenses -- so the expenses, there is a seasonality of the expenses with the FICA and what have you. So it will be higher sequentially, and a lot depends on what happens for the rest of the year. But if there is moderate economic growth and there was a little increase, you would think that this would be the low watermark for EPS for the year.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

But how much of the -- so let's say your $25 million expense rate per quarter once you get through the cost initiatives, how much would be realized in 1Q?

James M. Langrock

You got to be careful with that, Glenn. Let me just take you through it a little bit. As Sal mentioned in his comments, our basic planning scenario is that we believe that there'll be moderate economic growth, and there'll be a slow reduction in the uncertainty that's out there. So that would enable us to make investments in marketing and other growth areas. So the plan right now is to redeploy those expenses. They'll be a lot more flexible, but -- to redeploy it. And also just to level set everyone, if you take out the paid lead gen business in total of 2011, our expense base for the year would be about $945 million to $950 million. In a normalized environment, Glenn, you would assume a 5% increase in operating expenses. So that's another $50 million. So you -- let's call it your base is $990 million to $995 million, and then you back off the $100 million on an annualized basis. You back that off, but we are redeploying those savings in areas. Now we'll monitor that as we see what's going on in the economy. But right now, the intent is to redeploy those in marketing and sales to drive the new product adoption. So right now, we will be calling for -- on a full year basis, that the expense growth, with a moderate recovery, in the low single digits from an expense growth standpoint.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

For -- relative to the $945 million to $950 million?

James M. Langrock

The -- yes. Yes.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

And then just real quickly, if you could just sort of talk about what International margins might have looked like if you exclude China and some of the developing markets that you're investing in.

James M. Langrock

So if you take the International margin of 8%, if you take out China and developing markets, it would be very -- it's very similar to North America at the 17%, 18% from an operating margin standpoint.

Operator

Your next question comes from Tim McHugh from William Blair & Company.

Timothy McHugh - William Blair & Company L.L.C., Research Division

First, I was just going to ask the multiyear or the kind of the -- I guess you can say multiyear, but the large European booking and you're stressing that it wasn't in Q1 guidance. I guess, why not? And is that a multiyear type of sale or something? Is that the reason? Just kind of any color.

Sal Iannuzzi

It is -- first of all, it is a multiyear sale. It is a 4-year sale. It's 4-year project, I should say. It is -- as we noted, it is in excess of $20 million, okay. The reason we did not include it in the guidance is simply that it is such a large transaction. I believe it to be the largest transaction in the history of the company. And that -- to include it in our, call it, in our run rate at this juncture, where we're just really getting started in the government business in Europe, will be disingenuous, right. We think that holding it out, if you will, or drawing it as an exception was the fair way to present the numbers. If our guidance, if you want to include it, which I'm not suggesting, okay, but if you want to include it, then our guidance for Q1 would be relatively flat or plus 1%, something in that area, assuming that what our estimate is now for Q1 holds true. And I caution everyone that with the economies and the indecisiveness that's out there, the concern that's out there, that this is our best estimate of where we'll be. But time will tell. But that's the reason we haven't included it. Now what it is, is really a project which creates a government employment system, all right, for a European government, okay. That's about all I can say about it. There'll be an announcement, I suspect, in the coming week or 2, a joint announcement from that government and Monster that will give more color around it. But right now, for contractual reasons, we really can't talk to it much more than what we have.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay. And then just one other question, kind of asking the competitive question a little differently. You stressed the growth you've had in new products that you've rolled out the last few years and now that's almost something like 25% of the revenue today, which is great. But the implication is that the other legacy products, if that's true, have to be lagging much behind the market, if your overall revenue is down even as you've had new product scaled to 25% of revenue. Can you kind of -- maybe it's not fair to directly compare a trade-off between those 2. But can you kind of talk about, I guess, the competitive question in that context, in terms of kind of your new products versus what's happening with some of the legacy products out there?

Sal Iannuzzi

Well, first of all, I don't think it's correct to judge the performance of the company that we're losing market. If revenue is growing, our bookings are growing over 38%, regardless if it's new products or not, the fact is that we are growing, and we grew in 7 quarters over 38%. Within 2 years, over 38%, okay. In terms of the core product, if you will, right, which most people -- companies, by nature, whether it would be a job posting or would be the search activity, which makes up the lion's share of what's been identified as the traditional product, our amount of postings has grown very significantly. And that's excluding or including, however you want to look at it, from HotJobs, okay. So it's not being colored by HotJobs. So I think that the growth numbers speak for themselves. The average number of postings we have today is somewhere around 700,000. That's here in the United States. So I think in terms of market share, what we get from our customers, et cetera, show that we have not lost market share in those areas, okay. Part of my number also included PRS, that $100 million number, and that replaced classic search because somebody's -- most customers -- while some buy both some classic and some PRS, what it shows is the movement of the newer product. And those newer products are creating the stickiness, preparing us for SeeMore and giving us a higher margin than other products. So I think that from a competitive standpoint, we're in really good shape. And when you consider the product suite, and most customers, when they look at it and see our product suite, we had a conference with staffing companies in Boston, about -- little over a month ago now, probably a month and a half or so, and we were able to -- we had more of a captive audience, if you will, and we're able to demonstrate in detail our products. Let's just say we got tremendous support and a lot of traction on those. Deals were struck immediately after, and deals are being contemplated and discussed as we speak. So that's all very positive for us. What we have done, I believe, is put more of a cushion or more of a support level under our revenues and under our booking by the introduction of these products. So that even in a declining market, it still may not be the results that we'd like to see but would be better than they would've been. And I think that tempo will increase as more and more of these products are introduced, and there's more refinement to them. Many of these are really the beginnings of families of product, and they can be introduced very economically and relatively quickly now.

Operator

Your next question comes from John Janedis with UBS.

John Janedis - UBS Investment Bank, Research Division

Sal, at least the near-term outlook appears to be a little bit disappointing. So can you talk more about maybe the sustainability of the business longer term? And from a competitive perspective, a lot people talk about LinkedIn flying at the high end of the wage earners in skill set, but about 40% of the U.S. working population is now on the site. So are your sales people seeing them more in the $50,000 to $100,000 jobs range?

Sal Iannuzzi

No, I don't think so. That's not something that we've seen. We certainly do see LinkedIn out there. They've been increasing its public information, obviously. They've been increasing their expense base. And a large part of that is hiring sales people, et cetera. So we certainly see them out there. But we do not -- the issue of them coming down, if you will, into lower levels, we really haven't seen. And besides that, it kind of makes sense that we haven't. That model and the labor intensity of that model is such that as you go down in terms of the course of the jobs, right, it becomes less economically efficient to use their model, okay, and increasingly beneficial to use ours, particularly when you have PRS. And the search methodology that we have is very efficient. It's very fast. So I think we're in 2 different -- just from a pure economic perspective, 2 different spectrums, and it doesn't make as much sense. I think that in terms of the market going forward, we are not -- and I don't want to paint the picture, and if I have, I apologize. We are not in the same climate as 2008, okay. We are certainly in a climate where there is consternation. There is procrastination. However, whatever word we want to use to describe it, where more and more -- many entities are sort of frozen and waiting to see which way things swing. Surely, on the small business side, there is a great deal of -- a very significant pause, right. That part of it has got some similarity to '08, because the small business operator is just concerned. He doesn't want to add cost when he doesn't know which way things are going to go. Having said that, do we believe -- I think we all have to hope that the issue in Europe, it can't happen soon enough, is resolved, okay. And that'll have beneficial impact here in the U.S. But if we return to -- and I don't mean we consider it a robust economy. I consider it a muddle-along economy, which we've -- which was what we've experienced in 2010 and '11. Monster's growth can -- growing somewhere in the 15% to 20% level is very possible. On a margin, we get the question, I think you've posed it once or twice, with regard to operating margin, can we hit that 25%? Absolutely, particularly with the kind of capability and efficiency that we've been building into the company for the past several years. Absolutely. As a -- if you go into and if someone asked you a question, I want to elaborate on it for a moment, if you look at the company today, even in this climate, we are investing heavily in China and Latin America. Just -- let's take those 2, and there are other investments smaller in size. And I'm not even counting the investment we're making in governments, all right, but just geographically, Latin America and China. If we didn't have those investments -- and we believe they are very worthwhile investments. I think they will provide significant shareholder value into -- at this point and not too distant future, okay. But if we did not have those, our operating margin would be somewhere in excess of 25%, close to 30%.

James M. Langrock

On the International.

Sal Iannuzzi

Okay, on the international side. So I think that the model, the franchise has enormous growth potential, okay. We do need some wind to our backs. I think some of the products that we've introduced helped cushion us against the deteriorating market. And as we said, we're prepared. We've created a lot of flexibility in the model, in the sense that if things were to deteriorate further, we can very, very quickly take out significant amounts of expense out of the company. I will not commit to taking out the full $100 million that we're saving out of the company. But if I needed to and we went into an environment that was seriously worse than what we have today, a number in the $75 million, $80 million range is not out of the question. We would reduce expense. And that could be done literally within days, because of the nature of where we intend currently, under the current situation, to spend the money. And it really is being spent to support the new products. A lot of it is B2B advertising, so that's where we're intending to direct the spend. We would simply cut back on that, and wait it out. And we will not spend the money into an environment where we don't think we get the benefit and the return for the shareholders.

John Janedis - UBS Investment Bank, Research Division

Okay. And, James, very quickly, on the buyback, any thoughts on being more aggressive here going forward?

James M. Langrock

So what I would say is it's a $250 million buyback program over 18 months, which is significant. I think we'll continue to be opportunistic, and you'll continue to see us be active in the market. And we'll obviously be mindful of the economic environment, but we will continue to be active.

Operator

Your next question comes from John Blackledge from Credit Suisse.

John R. Blackledge - Crédit Suisse AG, Research Division

I'm just wondering if you can provide some more detail on the decline in revenue in 1Q '12. What are you looking for in North America Careers and International Careers decline? And give -- what's -- what is driving the declines? If it's not listing volume, is it pricing, or is it small business? If you can just give us a little bit more color there, and that's it.

Sal Iannuzzi

John, this is Sal. I think -- and I'll turn it over to James. I think the decline on the revenue side is largely attributable to 2 factors, okay. Number one is -- and then there's no particular order to these. Number one is that there are -- have been, of what was booked in Q4, a greater amount of that, okay, was multiyear transactions. Now the amount of decline is $8 million or $9 million, and so it doesn't take really a lot of multiyear transactions to change the revenue recognition, if you will. So I don't want you to think that we've had a massive increase that thousands of multiyear transactions have built in. But we have seen a sizable increase, and of course, they tend to be bigger transactions. So that's affected our revenue recognition, because those bookings will just come in over longer period of time. And as I said in my comments, the good news -- the bad news is we don't have the revenue now. The good news is that it's building a pocket of revenue that will hopefully continues to grow and give us greater stability going forward, okay, as that grow. It's still too small today to do that, but we are seeing a trend where we would expect those kinds of transactions to continue to grow. Having said that, the other issue is the e-Comm business and the small business side. The small business side in Europe and North America slowed. The concern or the lack of direction that's affecting all of us is such that the small business operator is just holding back, okay. And those transactions is the part of our business which converts from booking to revenue very quickly, has ebbed and that affected now -- that part of the business is not the biggest part of the business. And I don't want to -- I want to be cautious not to paint that picture. But between Europe and the United States, it can -- given that kind of decline, it can easily affect revenue to the tune of $4 million, $5 million. So those 2 factors, okay, are really what drove the impact.

James M. Langrock

So, John, as it relates to Q1, the guidance of the 3% to 7% is, as Sal mentioned, the multiyear deals in the bookings in Q4. That does have a follow-on impact into Q1. And then also in Q1, you have bookings declining 6% to 10%. So that's why you're seeing the 3% to 7% guidance in Q1 for the revenue decline.

Operator

Your next question comes from Mark Mahaney, Citigroup.

Neil A. Doshi - Citigroup Inc, Research Division

This is actually Neil Doshi, calling in for Mark. A couple of questions. Sal, what's your conviction that the booking trends for Q1 aren't partially due to competitive pressures? And then secondly, given the economic environment that we're seeing in Europe and North America, how sustainable do you think you can continue to sell Power Resume Search at a premium given what's happening with certain clients?

Sal Iannuzzi

Okay. First of all, with regard to Power Resume Search, here in the United States, we've been at it for about 1.5 year now, selling it. And the conversion, if you will, from classic to PRS continues to grow, okay. Now we do -- it will never be 100%. Why? Because we have some customers, for example, insurance company, that do not need the precision of PRS because they're looking for people they -- to service their needs. They can hire people from a really wide berth of experiences. So they don't need the precision, if you will, of qualifications that PRS brings to the table, right, and therefore, it would be foolish for them to spend the premium in order to achieve their objectives. But what we've seen and the proof is, as the adage says, the proof is in the pudding, okay. Customers now have come back. They've renewed. They're still paying the premium. The ROI on the products obviously speaks for itself. The traction in Europe is increasing, in the U.K., which followed the introduction in the U.S. and France. And now the indications, we've just introduced it as a product. We were in beta until literally a week ago, and we've now introduced it in Germany. We expect the same results we've seen in both the U.K., France and in Germany. Based on early indications, okay, and based on our experiences elsewhere and our knowledge of the market in the Netherlands, we expect when introduced, they will also do well in the Netherlands, all right. I think that the -- with regard to the decline in bookings, right, first of all, we declined over 40% in '08, all right, with the decline in the market. We came back 38% in the past 2 years, all right. So the market didn't walk away from us, and the competition that was there today has been present for the last 2 years. And we're building back. We are, without question, impacted by slowdowns in economy, okay. As I said before, I think we're being cushioned a little bit on that because of the new products. But we haven't beat that issue yet in the sense to make the company more immune to volatility in the economy. But when you see situations where in e-Comm, you were growing at a clip of 20%, 25%, 30% just 1 or 2 quarters ago, and it dropped to negative 10%, it doesn't happen that quickly that that's competition. And it certainly doesn't happen that -- it happens in every country around the world where our business model, the competition is different in virtually every country. Germany going from 53% growth to 6%. Korea, going from the kinds of percentages I indicated, down to flat is not indicative of a market change or a sea change in competition. It's indicative of unfortunately what we're all contending with, regardless of our business or industry, which is economic slowdown.

Operator

Your final question comes from Tobey Sommer with SunTrust.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Quick questions. If -- Sal, if you were to dedicate a little more of your cost savings towards marketing spend, would it be directed toward generating more visitors to the site or if emphasized more on employers for sales?

Sal Iannuzzi

We will spend some of it on bringing more visitors to the site in certain marketplaces where we think it's warranted. But the lion's share of the spend, all right, is directed towards B2B and making sure that our customers are aware of and educated on our new product suite. For example, I mentioned earlier the meeting -- the conference we had in Boston with about 100 staffing customers. That meeting and all the things customary to do around it, cost somewhere around $0.25 million, okay. It was very beneficial. It was very productive. We plan to do -- given the results that we saw, we plan to do many more of those, high touch, careful explanation, detailed spend. The kinds of products we're introducing are not served by a 30-second commercial on television, okay. I cannot explain what SeeMore does in that kind of an environment, okay. It's appropriate for certain things. It's appropriate for brand, but we still enjoy enormous brand recognition, okay. Our issue is to be able to explain the capability, the force, the ROI, all the benefits of our new suite of products, and we need to support that.

Operator

Thank you, ladies and gentlemen. This does concludes today's conference call. You may now disconnect.

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