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Executives

Lori C. Chaitman - Former Vice President of Investor Relations

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

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

Analysts

William G. Bird - Lazard Capital Markets LLC, Research Division

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

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

Matt Hill

Douglas M. Arthur - Evercore Partners Inc., Research Division

Craig A. Huber - Access 3:42, LLC

Jeffrey M. Silber - BMO Capital Markets U.S.

Mark S. Mahaney - Citigroup Inc, Research Division

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Monster Worldwide (MWW) Q1 2012 Earnings Call April 26, 2012 8:30 AM ET

Operator

Good morning. My name is Chante, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2012 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Lori Chaitman. Ma'am, you may begin your conference.

Lori C. Chaitman

Good morning, and thank you for joining us on Monster Worldwide First Quarter 2012 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, members of our executive management team are available to answer your questions during the Q&A part of the call. They are Tim Yates, 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, everyone, and thank you for joining us today. Given our recent presentations at the Baird conference and Innovation Day, our prepared remarks will be shorter than usual. We will, of course, take your questions at the end of James' financial review.

The overall global business environment during the quarter remained uncertain and was much as we anticipated coming into the quarter. In this environment, we exceeded our expectations on bookings and EPS, and we're at the top of our range on revenue. The key highlights of the quarter were: Bookings were up 5% year-over-year. Excluding the DWP transactions, bookings were 4% lower than last year's first quarter. On a geographic basis, bookings in North America were up 6% year-over-year.

During the quarter, we executed better and experienced strong results in key verticals such as Government, Staffing and newspapers. We had improved performance in enterprise. The result of the e-Comm channel remains inconsistent and weak.

As noted in January, we took a number of steps to improve our performance and our competitive position in the U.S., and as a result, we definitely noticed an increase in our win/loss performance in highly competitive situations. We believe these initiatives began to pay off during the quarter and will gain momentum throughout the year. We are confident that these actions will allow us to continue the longer-term trend of share gains in the United States.

Bookings in Europe were up 13%, excluding DWP that was down 16%. Economic indicators in Europe throughout the quarter were weaker than was generally forecasted. Europe area unemployment was an all-time high. According to Eurostat, and it is widely believed that many countries within Europe sank back into recession. We believe that the decline in Monsters' European bookings reflected this economic uncertainty and does not reflect a competitive concern.

Bookings in Asia-Pac were flat year-over-year reflect the general cooling of Asian economy. While bookings of our Korean business declined 3%, the business continues to be extremely profitable and is well positioned to retain its growth, when the Korean economy picks up. Bookings in China increased by 4% and India, 2%.

Consolidated revenue was down 3%. EPS was $0.04 versus our guidance of $0.00 to $0.04. During the first quarter, we largely completed our restructuring, and as anticipated, began the redeployment of expense dollars into marketing. During the quarter, we purchased 4.4 million shares at an average cost of $7.58, deploying $33 million.

As I mentioned at the recent Baird conference, and as many of you are able to observe, at our recent Innovation Day, we are very focused on bringing our new products to our customers on a global basis. We are aggressively pursuing market share gains in all of our key markets and are supporting this asset with increased B2B marketing dollars.

Client interest in 6Sense technology, PRS and SeeMore continues to increase. A number of our current government contracts, including DWP, ohiomeansjobs and V8 for Vets have PRS and SeeMore embedded in the solution. And the 6Sense functionality was a critical ingredient in securing those transactions. In addition, our enterprise pipeline has essentially doubled during the quarter and interest within our Staffing vertical, in particular, have significantly increased.

Our renewal product portfolio continues to perform well. During the quarter, global bookings of CAN and PRS grew approximately 10% year-over-year. Looking forward to the second quarter, we expect that the current uncertainty and market volatility is likely to continue.

As an indication of that uncertainty, at the beginning of last quarter, many predicted steadily improving global economy. That view has now changed, and many fear a failure of the recovery and weakening business conditions, particularly in Europe. The optimism of last quarter was overstated, and we trust that the current pessimism is also overstated. However, it is difficult to predict how this uncertainty will be resolved, and therefore, we are positioning the company both offensively and defensively. Offensively, we are aggressively pursuing the objectives I've just discussed. Defensively, we continue to be extremely careful not to let spending get out in front of market conditions.

When we announced our cost restructuring and redeployment program, we noted that the primary benefit of this program was designed to allow us to move expense dollars from products and technology to sales and marketing and to offset in part in normal upward bias in operating expense.

A secondary benefit was designed to increase flexibility and operating expenses. In other words, if global economies materially deteriorated, we would not reinvest as much of the dollars saved in sales and marketing. Based on the environments we are experiencing today, which on a global basis is much like what we experienced in the first quarter, we believe it's appropriate to redeploy much of the dollars saved from the cost restructuring program into specific areas designed to speed up adoption of our new product portfolio and strengthen our competitive position, against targeted competitors, as we did in the U.S. in Q1.

Our cost redeployment program gives us the flexibility to make these investments, while retaining tight control on operating expense. It will position us well for the important renewal season ahead. With this background, we currently anticipate that Q2 bookings will range down 5% and up 1%. Revenue will range between down 8% to down 4%. EPS will range between $0.04 and $0.08.

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

James M. Langrock

Thank you, Sal, and good morning, everyone. Slide 3 is the first quarter pro forma income statement. All comparisons will exclude paid lead gen in all periods.

Driven by stronger execution in the U.S., bookings were $274 million, up 5% on a year-over-year basis. Excluding DWP, bookings declined 4% year-over-year, beating our guidance range. Bookings excluding DWP were negatively impacted by 1% of currency translation on a year-over-year basis. Revenue was $246 million a 3% decrease on a year-over-year basis and a 2% sequential decrease. The DWP deal had no impact on revenue. On a year-over-year basis, currency negatively impacted revenue by 1%.

Total operating expense was $237 million, a 1% year-over-year decrease and a 3% sequential increase. Currency favorably impacted operating expense by 1% on a year-over-year basis. Operating income was $9 million compared to $12 million last year and $20 million last quarter. Currency negatively impacted operating income by less than $1 million. Interest and other was a negative $1.5 million. Equity loss was $200,000. EPS was $0.04 compared to $0.05 last year and $0.11 last quarter.

Turning to Slide 4. Net pro forma adjustments resulted in a loss of $900,000. However, there were a number of largely offsetting adjustments as follows: a $5 million gain, resulting from a restitution award from a former executive; a $24 million restructuring charge; and an $18 million nonrecurring income tax benefit.

Slide 5 shows the trends on pro forma operating expenses. Salary and related of $121 million, decreased 8% on a year-over-year basis as a result of the restructuring and the result in lower headcount. S&R have increased 2% sequentially, primary the result of the normal first quarter FICA expense. Marketing at $58 million was a 21% year-over-year increase and 11% increase on a sequential basis. As anticipated, we increased marketing in North America, and a number of our international markets. Office and general was $58 million, essentially flat with last quarter and on a year-over-year basis.

Slide 6 and 7 review the first quarter segment and geographic performance. And this quarter, we have added bookings to the slide to Slide 6. Career's North American bookings increased 6% year-over-year, revenue declined 3%, and EBITDA margin was 24%.

On a bookings basis, we experienced strong performance from our Government, Staffing and Newspaper verticals and improving results in enterprise. As Sal noted, e-Comm continued to be weak. Bookings in the International segment were up 9%, and when excluding DWP were down 11%. Revenue in the Korea's international segment was flat. EBITDA margin was 9%, and excluding China and developing markets, EBITDA margin was 19%.

Within European bookings, while all countries experienced a year-over-year decline, Scandinavia and Germany held up best, while the Netherlands was most negatively impacted by concerns impacting both the euro area and the Netherlands itself.

In his comments, Sal provided detail on bookings in the A-PAC region. International segment EBITDA margin declined as a result of the increases in marketing spend. Revenue in IAF was $19 million compared to $21 million last quarter and $22 million last year on an adjusted basis. IAF's EBITDA margin was 34% compared to 32% last quarter.

Slide 8 highlights key balance sheet and cash flow items. Pro forma EBITDA was $35 million compared to $44 million last year, and $47 million in the fourth quarter. GAAP EBITDA was $22 million. Net cash provided by operations was $21 million. Capital expenditures during the quarter were $13 million. Deferred revenue was $408 million.

During the quarter, we acquired slightly over 4.4 million shares at an average price of $7.58, deploying $33 million of cash. In addition, we extended and increased our bank credit package to $325 million. As a result, net cash at quarter end was $39 million, and our total liquidity was $370 million.

In summary, we are pleased with our performance in the first quarter. North American bookings improved and increased on a year-over-year basis. Despite the sequential decrease in overall revenue, EBITDA was $35 million. We are executing our restructuring and expense redeployment program. The significant expense reductions achieved to date are allowing us to make investments in sales and marketing, while controlling operating expense and protecting the company's profitability and cash flow. We returned over $33 million to the shareholders in the first quarter.

As shown on Slide 9, in Q2, we currently anticipate that bookings will range between down 5% to up 1%. Revenue will range between down 8% to down 4%. EPS is expected to be in the range of $0.04 to $0.08.

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

Sal Iannuzzi

Thanks, James. We have aggressively pursuing our business strategy on a global basis. While we certainly hope for an improvement in the business environment, our new products are gaining traction. We have improved our execution in the U.S., and we are very optimistic that we will win an increasing share of the available business.

We continue to feel that the stock is significantly undervalued, and as you know, we embarked on a complete review of our strategic alternatives. It is still early in this process, and together with our board of advisors, we are aggressively pursuing all alternatives.

At this stage, it is not appropriate to provide additional commentary, and please keep this in mind during the Q&A session. We will now open the call for all of your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we have William Bird from Lazard -- is with your first question.

William G. Bird - Lazard Capital Markets LLC, Research Division

Sal, I was wondering if you could talk about just how you think about buybacks. Why are you going through a strategic alternative process? And then second, could you elaborate a little more just on some of the short-term strategies you're employing for trying to drive higher bookings growth?

Sal Iannuzzi

Sure. First of all, our plan is to continue the stock buyback as aggressively as opportunity provides. Obviously, if we get to a point where counsel instructs us that it would be more prudent not to do that, we will stop. But the intention is in foreseeable future, certainly, to continue the program as aggressively as opportunity presents. With regard to bookings, I think that the greater strength that we have in increasing bookings and increasing market share is by virtue of our products. The new products that we've developed and rolled out in the past year or 2. I think that the Q1 is a result of whatever execution issues we had here in the United States are all behind us. We said we would address those. We have addressed them. And I think the momentum from the actions we've taken will increase positively as the year goes on, irrespective of the economy, okay? I think that the new products continue to provide a lot of platform if you will for discussions with our customers. I think it's responsible for a significant increase in our business, for example, the staffing company. As we said in my comment, I think it's responsible for our continued strength in the government business. We launched transactions with government, have 6Sense, SeeMore embedded in them. And I think that, that trend will continue and help us with our Career side, if you will, our Korea business, as we go through and develop our pipeline, that as I said, has more than doubled than the last quarter. So I think that the trend is good with regard to -- in an environment which is at best uncertain and sluggish, for us to produce better returns and better booking than the economy would normally give us.

Operator

Your next question is from the line of Tobey Sommer.

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

I wonder if you could comment on the bookings in the quarter. Is it from a wider range of customers? Are you seeing new customers buying? Or is it slightly larger orders from existing customers?

Sal Iannuzzi

I think it's a little bit of -- Tobey, I think it's a little bit of each. First of all, I don't want to -- while we're pretty happy about some of the situation here in the United States and the improvement, we'll celebrate for about 2 minutes, we don't believe that -- we think they're good numbers, particularly, given the environment, but we can and will do better. And we need to get back to that -- I don't want to be too exuberant on what happened in one. I think that the -- what is happening is that we had more win backs, more new customers if you will. I think that the value proposition, by virtue of some of the actions we took, has improved. But I think that a substantial amount of the credit or -- goes to the new products and the fact that those new products are really beginning to get more traction and so -- which as you might expect and as we we're hoping, those new products are causing more stickiness with our customers across a broad swap. Staffing is an area to note. We've seen significant improvement there. I think the staffing company understand that we have more to offer, and we see significant improvement there. So that's certainly a bright spot.

Operator

Your next question is from the line of Jim Janesky.

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

Can you talk about what areas that you're seeing -- the strength in -- or what your customers are telling you, what changes that you made in order to make the product more productive?

Sal Iannuzzi

Okay. I think that, one, as I said, is the new products. As we're gaining traction with them, I've said many times before, these are longer-term sales. And I think that some of them is trying to just gain traction. It's a natural cause of -- these conversations have been going on, and you're starting to see some of them just come to fruition. I think that -- fortunately, for us, I guess, the things that happened -- we said, we made some mistakes in Q4, thankfully, they were tactical and not strategic. And in a sense -- and please take this in how it's meant, they were not easy to fix, so we wouldn't have made a mistake in the first place, but we knew what we needed to do. And so we competed strongly with our competitors. We also improved our performance in terms of candidates to the site, okay? Our metrics have gone up significantly in Q1 and as the quarter has progressed. Most important, it's not -- and then we've said it before, it's not traffic, it's a number of apply to a job. Our applies are up significantly, and we believe that, that trend will continue. So when I think overall, the normal part of the business, we've taken care of the issues we needed to take care of, and we are very focused to make sure they stay on the track or the trajectory that they're on, while at the same time, the new products are kicking in. And I think that, that gives us, in a lackluster, for lack of better term, environment, I think it gives us reason for optimism going forward.

Operator

Your next question is from the line of Tim McHugh.

Matt Hill

This is Matt Hill, in for Tim McHugh. My question had to do with pricing trends you're currently seeing. I think at the Innovation Day, you kind of mentioned that you're seeing more aggressive pricing from some of your larger competitors in the U.S. I'm just wondering if you had any update on that.

Sal Iannuzzi

I think that it continues -- from a price standpoint, it continues the same trend we we're seeing in Q4 -- continues. We are much more vigilant. And from the standpoint that we are not going to lose, and if we're going to lose, it means because the pricing just simply makes no sense, but we intend to be extremely aggressive. With regard to -- but as I said, it's not just an issue of price, it's an issue of the solution and the strength of the solution you're offering. And if we present that correctly, which I believe now we are, that should overcome at least some of that pricing pressure. But I think that the overall climate really hasn't changed very much. It's probably about the same. Nothing unusual appears to be going on. There's the issue in the war, if you will. There is a war. It's on just providing the best results and the best value to the customer.

Operator

Your next question is from the line of Doug Arthur.

Douglas M. Arthur - Evercore Partners Inc., Research Division

Yes. A question on Germany. As bad as the European economic outlook seems to be, Germany has shown a few signs of strength across the board. What did you see in the quarter? What are you likely to see near-term in Germany?

Sal Iannuzzi

Arthur, your point is, of course, correct. Germany is the strongest economy, as we all know, in Europe. Our results in Europe, and what we're seeing continues to bear that out. Having said that, Germany has also slowed down very significantly. Our growth in Germany...

James M. Langrock

The currency, Doug, it was 7%. It was down year-over-year.

Sal Iannuzzi

So we're seeing, obviously, sluggishness there too, but better than the rest. But, of course, Europe, at the moment, you're seeing very significant -- I wouldn't call it a disaster situation or certainly it's not reminiscent of what happened in 2009 -- 2008, 2009. But every country in Europe has slowed down, for example: the Netherlands was down 29%; the Belgium, 17%; the U.K. is down 13%. So Germany is fairing the best, but every country in Europe is -- has slowed down and slowed down significantly. And by the way, this is consistent. We've been obviously, watching very carefully what our competitors have been doing, and it's very consistent not only with competitors, but actually, with the staffing industry and what they've been experiencing, everyone have seen pretty much. Everyone articulates a little bit differently, but by and large, everyone have seen the same general trend. I think that from our standpoint is -- the economy is going to be what it's going to be. Our job is to compete and compete strongly. Our products, as I said previously, give us an edge and to exploit that edge as much as possible. But what we don't have in Europe, the competition is strong. But this is not a competitive issue. It's not the same type of thing as what happened here in the U.S. in Q4. It is the economy, competition -- a strong competition, it has been strong, and nothing has really changed. So it's really a macroeconomic issue, more than anything else.

Operator

Your next question is from the line of Craig Huber.

Craig A. Huber - Access 3:42, LLC

Yes. A couple of -- 3 questions please, if I could. First, can you give us a little -- a sense of your marketing promotion, what we should expect for the year. Looks like in this quarter we just finished, it's up 1% versus your revenue's down. I mean, how much flexibility do you think you have in that line, where you could you maybe bring that down for the rest of the year at a meaningful clip?

Sal Iannuzzi

We have the capability, if you will, to bring it down and bring it down significantly. As we said before, shifting of expense load from a more -- let me say it this way, and I don't mean this in a technical accounting term. From a more fixed, if you will, or a harder cost to more flexible cost, meaning predominantly marketing, we've done that. The restructuring was successful. We've largely gotten that behind us. We, actually, were able to do it more efficiently than we expected. There are some other opportunities that we've investigating. We're not sure yet, whether we'll take advantage of them or not. We want to make sure we get a proper return. So we're doing a little study. But predominantly, it's done. I think, as we said, we could feel that it is appropriate, given the investment we've made in products and in technology to -- in order to harvest the benefits of that. We feel it necessary and appropriate to put more dollars in certain countries, in certain places, in order to reap the benefits. Now having said that -- and I think it will be foolish not to do that. We will spend a lot of time, a lot of investment to create these products, and then particularly in an environment such as this not to be able to take advantage of them, just isn't right. The other issue is that we could take down the number. It's a very easy number to either up or reduce. It could be done literally in a matter of days. The issue with it is that we'd be selling short the future. We have -- Q4 will be upon us sooner than we think. And we want to make sure that we go into that period as strongly as possible. So if it's a choice between improving profitability by a $0.01 or $0.02 a share or putting us in a stronger position for the future, and I'm talked about quarters later this year and into next year, we are going to put that spend into ensuring the best result, irrespective of the macroeconomic picture that we can get. Having said that, if the situation deteriorates and deteriorates significantly from where we are today, we are prepared and can take action, right, to bring down that expense to, obviously, protect the earnings of the company as much as possible. But for $0.01 or $0.02 in a particular quarter, we'd be shortchanging the future, and we're just simply not going to do that.

Craig A. Huber - Access 3:42, LLC

Okay. And this is my second question, please. How would you characterize your business, the macro environment now versus what your thoughts were as you started 2012? Does it feel better for you out there, or worse from your business standpoint? Both the Europe and the U.S., please.

Sal Iannuzzi

If you detect a little bit of -- this is one of those situations that I really regret being right, okay? We said in Q -- when we reported Q1, that we saw a very cloudy picture here in the United States, North America for that matter, and the situation in Europe was deteriorating, okay? Unfortunately, that's exactly what's happened. Europe is -- the situation in Europe has deepened, okay? I believe in quarters to come, it will begin to improve. I think the leadership in Europe understands what they need to do. I think they will, of course, debate the issues and what the solutions are, but ultimately, they'll -- my personal belief is they'll arrive on the right place and make the right decisions and things will start to improve and give confidence to the business community in Europe. Here in the United States, the situation remains much, I believe, as we've seen it in -- actually, in Q4, in Q1, and we don't see a clear direction to a significant improvement. Having said all of that, our job is to -- and I think we have reason to be somewhat optimistic on this, is that even in that kind of environment, because of the strength that we have with our products, and as our customers realize more and more of the lack of competition that we have with regards to our new products that we will -- we'll do well within the context of the macroeconomic picture. But for the time being, we don't see a significant change in Q1 versus Q2. And that is up or down, we're not expecting things to deteriorate sharply, but at the same time, we're not expecting a sharp improvement either.

Craig A. Huber - Access 3:42, LLC

And then, lastly, if I could, you gave us some very good country detail, how Europe did in the quarter. Could you tell us some of the highlights of Asia that will offset that?

Sal Iannuzzi

Asia remains -- if you take Asia as a whole, it was relatively flat, it was a -- probably up a percentage point or so year on year. I think that what's happened there is Korea came down about 2%, 3%, year-on-year, but that's all extremely robust numbers. And they are so strong in the market as the -- there was clarity to the market -- their numbers will continue to improve, again. But it is doing well by any measure. China is sluggish again. I think the concerns out of Europe, concerns in the U.S., as we've all said bleed into China, and so China's relatively flattish. Again, that catastrophic situations or anything like that, not issues anywhere near what we saw in '08 and '09, but just plodding along, if you will. And the same is true for India. India saw a slowdown, and it's been a slowdown -- there were some spurts of activity, but even the amount of investment in technology, which was a big engine of growth in India in the past number of years. Even that, the investment of American companies and European companies and technology has slowed somewhat. So it is, I think that's also reflective of the economic picture. So Asia is sort of waning. It's relatively flat, and we don't see that changing dramatically in Q2.

Operator

Your next question is from the line of Jeff Silber.

Jeffrey M. Silber - BMO Capital Markets U.S.

In the past few weeks, we've seen a pickup in M&A activity in your sector, especially globally. Now irrespective of what's going on with your strategic alternatives review, are there any holes in your product line that you think you might need to add through M&A?

Sal Iannuzzi

No. If the question you're asking is are we looking at any acquisitions in order to, as you said, fill in any holes or anything, we do not see anything on the horizon at this point, which first, and most importantly that we need to do. I think that we are in a unique position, we have more than anyone else. So there's really very little that we need to do from that standpoint. And, as of, certainly, this morning, we see nothing that's attractive that would make any difference. So from that standpoint, the answer is no.

Operator

Your next question is from the line of Mark Mahaney.

Mark S. Mahaney - Citigroup Inc, Research Division

Just want to ask a question about -- or some context around this DWP contract. First, thanks for all the disclosure around it. It's helpful to be able look at the growth rate with or without it. I don't think you had any revenue in the quarter. You'll start getting at -- I think in June quarter. How long does the contract last for? And is there any particular reason that we should single it out or exit out? Is there something unusual about this contract versus other contracts in that sector that you've had in the past?

Sal Iannuzzi

No, just the -- No, I think that the only thing that was unusual about that transaction and why we felt it appropriate to single it out was its size, okay? It is a transaction of size. It is also unique from the standpoint that it's the first transaction of -- with a government in Europe, and that it also illustrates that's a strategy to invest in the government business as an area for future growth outside the U.S., that it's important. I think from a -- so that would be -- those were the only reason why it was singled out. There was nothing unique about it other than that. It is similar to transactions we've done, certainly, here in the United States. And it will progress, the revenue recognition, et cetera -- will proceed the same as with many other transactions here in the U.S. I'm sure James has a couple of additional points to add to that, but -- so I'll turn it over to him.

James M. Langrock

So from a revenue recognition standpoint, we'll start recognizing revenue when the site is up and running. And that we'll schedule probably late Q3, early Q4 from a revenue recognition standpoint. The contract term is for 4 years, so I'll recognize a revenue of a 4-year period, but that's on the revenue, we will start recognizing the revenue on the transaction.

Sal Iannuzzi

The beauty of that business and the beauty of the government as a whole is that it's sticky, its long-term, it's not a sale that has to be replenished, if you will, each year. It's a -- in a sensible, somewhat of an annuity stream, all right? And gives us, without having to increase cost, particularly in our salespeople et cetera -- gives us the opportunity to focus on broadening the business rather than just replacing the business. So it's -- if you're detecting that we're fairly happy about the business in general, we are absolutely are. We think it's -- builds a lot of help for the future.

Operator

Your next question is from the line of Mark Marcon.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Two types of questions. The first has to do with some of the areas that you been investing in. As investors are trying to evaluate the underlying profitability, I'm wondering if you could give a little bit more color in terms of your expectations for the investments behind China, Brazil, Turkey, et cetera, Sal, that you are -- you're not holding back on some of these longer-term investments. Can you talk a little bit about how much that's going to cost over the course of this year? And then I have a follow-up with regards to the e-Comm space.

Sal Iannuzzi

I think -- as I think I said it on the -- my comment on Innovation Day and, actually, at the Baird conference, I think that our investment, if you -- between that the 3 markets as mentioned, a little bit in Turkey, more in Latin America, Brazil being the largest within Latin America of the investment, and China. The cost -- and these numbers are around it and a little bit rough. But the investment, as said another way, the loss, embedded in this year's numbers, we expect it to be somewhere around $25 million to $30 million. We think that those investments are warranted, and we think that there is substantial upside to be had in the future. So -- but, as I said, there's -- it's an investment of $25 million to $30 million or somewhere between $0.15 and $0.20 -- about $0.15 a share for the year. And as of today, and given what we're seeing and how markets are, we intend to continue making those investments, we think it's prudent and constructive for the future. If situations -- as I said before, with regard to the marketing, if situation were to deteriorate and deteriorate heavily, of course, we would re-examine that, okay? With regard to -- and I'm going to break my own rule, we look at it these things constantly in terms of other alternatives with regard to how we'd make that investment, whether that an alliance or a number of other things to -- but we don't want to simply walk away from those markets, because, again, we'd be selling the franchise short for the future.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

And it sound -- it doesn't sound like -- so that's not an area that you would pull back on necessarily if the economic conditions in Europe get a little bit worse? That's not one of the areas that you would come back to?

Sal Iannuzzi

Mark, the key to your question is a little bit. Now If Europe stays, plus or minus several percentage points and how it's behaving today, which obviously, we're not happy about, but stays in this range, I think we can handle it, within reasonable parameters and float with it and continue to make investment. If Europe were to deteriorate sharply then -- which would probably mean that the U.S. is also deteriorating, then all options are open, and we would reconsider not just Brazil or China or -- but reconsider all of our alternatives in terms of running the business. So I think the -- it's a question of degree. But based on what we see today, and by the best that we can look into our crystal ball, as to what the next quarter or 2 will bring, our attitude is to stay in the cost.

Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division

Great. And then can you talk a little bit about what you're seeing on the e-Comm channel and compare and contrast that to the progress that you're making to the Staffing side, the key drivers there that certainly is quite encouraging since they're the most progressive recruiters and most aware of what the good tools are? What's driving that improvement?

Sal Iannuzzi

I think that the staffing company is -- we've taken action. We put into place as long ago as a year now, particularly, with regard to that sector. And I think that just the way we've been dealing with staffing company. And that sector is different, and I think we're reaping some of the benefits of that. I think a good measure of it is due to our new products. I think we got a very good reception to our products, not only at Innovation Day, but in communication we have at the staffing conference a month or so ago now, maybe 1.5 months ago, out in Nevada, in Las Vegas, with regards to the new products and the interest level, was high. So I think, it's a bunch of things that are causing that to improve and improve well. I think that with regard to e-Comm, I -- first of all, I want to emphasize, e-Comm and small business as defined by many company is different. E-Comm for us, for the most part, is really small company, small businesses. Businesses that employ from literarily a handful of people to maybe 20, 30. It is truly small business. Some would say the mom and pop. That business, that activity, is not big numbers for us overall, but it does affect our revenue somewhat, because it turns -- someone buys a job posting, and it's used virtually immediately, so returns to revenue immediately. That business has been slow and continues to be slow. As best as we can tell, and it's really not surprising. It's following the traditional pattern that in times of lack of clarity and concern as to what the future will bring, there was a hesitancy, like businesses of that size, as you can imagine, they're extremely sensitive to any kind of cost increase. They tend to slow down, and that is what we're seeing right now. If you take the economy as cloudy as the picture is and you take gas prices and all of those in consideration, it's behaving as we would expect. So that part of it is slow. The rest of the business, bigger companies, our total sales business, they'll feel -- there, we're seeing more improvement. There is concern there certainly about the economy and direction, if you will. But there we're enjoying a little bit more of an upswing because of, I think, largely from what we get, the attractiveness of the new products, et cetera. So we're gaining more traction there.

Operator

This concludes the Q&A portion for the call. Thank you for joining us today. Ms. Chaitman, any closing remarks?

Lori C. Chaitman

Once again, thank you for joining us this morning for our first quarter conference call. You can access the call in the IR section of the Monster website. Thanks, again.

Sal Iannuzzi

Thank you, very much.

Operator

Ladies and gentlemen, have a good day.

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