UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-34209

MONSTER WORLDWIDE, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE		13-3906555
(STATE OR OTHER JURISDICTION OF		(I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)		IDENTIFICATION NO.)
622 Third Avenue, New York, New York		10017
(ADDRESS OF PRINCIPAL		(ZIP CODE)
EXECUTIVE OFFICES)

(212) 351-7000
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

		Outstanding as of
Class		July 23, 2009
Common Stock			125,900,966

 

 

MONSTER WORLDWIDE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
		No.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated statements of operations			3
Consolidated balance sheets			4
Consolidated statements of cash flows			5
Notes to consolidated financial statements			6
Report of Independent Registered Public Accounting Firm			20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			39
Item 4. Controls and Procedures			41
PART II—OTHER INFORMATION
Item 1. Legal Proceedings			41
Item 1A. Risk Factors			42
Item 4. Submission of Matters to a Vote of Security Holders			42
Item 6. Exhibits			42
Signatures			44
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 15.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I—FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS

MONSTER WORLDWIDE, INC.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenue		$	223,057			$	354,294			$	477,460			$	720,766
Salaries and related			113,484				135,879				235,869				276,327
Office and general			59,862				75,358				121,975				149,257
Marketing and promotion			44,953				68,976				118,644				180,830
Provision for legal settlements, net			—				40,100				—				40,100
Restructuring and other special charges			5,097				2,732				16,105				9,659
Total operating expenses			223,396				323,045				492,593				656,173
Operating (loss) income			(339	)			31,249				(15,133	)			64,593
Interest and other, net			76				3,057				1,279				10,440
(Loss) income from continuing operations before income taxes and equity interests			(263	)			34,306				(13,854	)			75,033
(Benefit from) provision for income taxes			(83	)			12,153				(4,572	)			27,296
Loss in equity interests, net			(1,190	)			(3,592	)			(2,429	)			(5,414	)
(Loss) income from continuing operations			(1,370	)			18,561				(11,711	)			42,323
Income from discontinued operations, net of tax			—				12,269				—				11,098
Net (loss) income		$	(1,370	)		$	30,830			$	(11,711	)		$	53,421
Basic (loss) earnings per share:
(Loss) income from continuing operations		$	(0.01	)		$	0.15			$	(0.10	)		$	0.35
Income from discontinued operations, net of tax			—				0.10				—				0.09
Basic (loss) earnings per share *		$	(0.01	)		$	0.26			$	(0.10	)		$	0.44
Diluted (loss) earnings per share:
(Loss) income from continuing operations		$	(0.01	)		$	0.15			$	(0.10	)		$	0.35
Income from discontinued operations, net of tax			—				0.10				—				0.09
Diluted (loss) earnings per share		$	(0.01	)		$	0.25			$	(0.10	)		$	0.44
Weighted average shares outstanding:
Basic			119,274				120,885				119,066				121,798
Diluted			119,274				121,541				119,066				122,552

See accompanying notes.

MONSTER WORLDWIDE, INC.

		June 30,				December 31,
		2009				2008
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	236,252			$	222,260
Marketable securities, current			14,533				1,425
Accounts receivable, net of allowance for doubtful accounts of $16,048 and $14,064			249,004				376,720
Prepaid and other			73,866				82,416
Total current assets			573,655				682,821
Marketable securities, non-current			81,272				90,347
Goodwill			897,561				894,546
Property and equipment, net			153,942				161,282
Intangibles, net			47,420				52,335
Other assets			35,617				35,259
Total assets		$	1,789,467			$	1,916,590
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	34,501			$	41,524
Accrued expenses and other current liabilities			148,299				205,005
Deferred revenue			289,818				414,312
Borrowings under credit facilities			97,000				54,971
Income taxes payable			9,489				7,896
Total current liabilities			579,107				723,708
Long-term income taxes payable			125,991				119,951
Deferred income taxes			23,872				24,658
Other long-term liabilities			7,099				1,000
Total liabilities			736,069				869,317
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value, authorized 800 shares; issued and outstanding: none			—				—
Common stock, $.001 par value, authorized 1,500,000 shares; issued: 134,038 and 133,335 shares, respectively; outstanding: 119,312 and 118,614 shares, respectively			134				133
Class B common stock, $.001 par value, authorized 39,000 shares; issued and outstanding: none			—				—
Additional paid-in capital			1,382,649				1,367,373
Accumulated deficit			(357,745	)			(346,034	)
Accumulated other comprehensive income			28,360				25,801
Total stockholders’ equity			1,053,398				1,047,273
Total liabilities and stockholders’ equity		$	1,789,467			$	1,916,590

See accompanying notes.

MONSTER WORLDWIDE, INC.

		Six Months Ended June 30,
		2009				2008
Cash flows provided by operating activities:
Net (loss) income		$	(11,711	)		$	53,421
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Income from discontinued operations, net of tax			—				(11,098	)
Depreciation and amortization			33,265				25,793
Provision for legal settlements, net			—				40,100
Provision for doubtful accounts			6,884				6,771
Non-cash compensation			20,268				15,028
Deferred income taxes			(6,421	)			(19,582	)
Non-cash restructuring write-offs, accelerated amortization and loss on disposal of assets			4,741				2,085
Loss in equity interests			2,428				5,414
Changes in assets and liabilities, net of purchase transactions:
Accounts receivable			120,239				82,660
Prepaid and other			16,861				19,098
Deferred revenue			(124,536	)			(53,923	)
Accounts payable, accrued liabilities and other			(61,893	)			(13,597	)
Net cash used for operating activities of discontinued operations			—				(3,129	)
Total adjustments			11,836				95,620
Net cash provided by operating activities			125				149,041
Cash flows (used for) provided by investing activities:
Capital expenditures			(26,379	)			(50,213	)
Cash funded to equity investee			(3,314	)			(5,000	)
Purchase of marketable securities			(7,476	)			(156,882	)
Sales and maturities of marketable securities			3,317				436,305
Payments for acquisitions and intangible assets, net of cash acquired			—				(61,567	)
Dividends received from unconsolidated investee			763				1,011
Net cash (used for) provided by investing activities			(33,089	)			163,654
Cash flows provided by (used for) by financing activities:
Proceeds from borrowings on credit facilities			199,203				—
Payments on borrowings on credit facilities			(157,173	)			—
Payments on debt obligations			(6	)			(147	)
Excess tax benefits from equity compensation plans			4				120
Repurchase of common stock			(2,435	)			(86,327	)
Proceeds from exercise of employee stock options			9				1,046
Net cash provided by (used for) financing activities			39,602				(85,308	)
Effects of exchange rates on cash			7,354				8,323
Net increase in cash and cash equivalents			13,992				235,710
Cash and cash equivalents, beginning of period			222,260				129,744
Cash and cash equivalents, end of period		$	236,252			$	365,454
Supplemental disclosures of cash flow information:
Cash (refunded) paid for income taxes		$	(2,767	)		$	24,952
Cash paid for interest		$	2,016			$	730
Non-cash financing and investing activities:
Liabilities created in connection with business combinations		$	—			$	449
Settlement of executive bonuses with common stock		$	2,275			$	—

See accompanying notes.

MONSTER WORLDWIDE, INC.

1.	DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Description of Business

Monster Worldwide, Inc. (together with its consolidated subsidiaries, the “Company” or “Monster Worldwide”) has continuing operations that consist of three reportable segments: Careers — North America, Careers — International and Internet Advertising & Fees. Revenue in the Company’s Careers segments are primarily earned from the placement of job postings on the websites within the Monster network, access to the Company’s resume databases, recruitment media services and other career-related services. Revenue in the Company’s Internet Advertising & Fees segment is primarily earned from the display of advertisements on the Monster network of websites, “click-throughs” on text based links and leads provided to advertisers. The Company’s Careers segments provide online services to customers in a variety of industries throughout North America, Europe and the Asia-Pacific region, while Internet Advertising & Fees delivers online services primarily in North America.

Basis of Presentation

The consolidated interim financial statements included herein are unaudited and have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The consolidated interim financial statements include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

These statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for fair presentation of the information contained herein. These consolidated interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The Company adheres to the same accounting policies in preparing interim financial statements. As permitted under generally accepted accounting principles in the United States, interim accounting for certain expenses, including income taxes are based on full year assumptions. Such amounts are expensed in full in the year incurred. For interim financial reporting purposes, income taxes are recorded based upon estimated annual income tax rates.

Certain reclassifications of prior year amounts have been made for consistent presentation.

Recently Issued Accounting Pronouncements

Effective January 1, 2009, the Company adopted the Financial Accounting Standards Board’s (“FASB”) FASB Staff Position (“FSP”) Emerging Issues Task Force (“EITF”) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 clarifies that non-vested share-based payment awards that entitle their holders to receive nonforfeitable dividends or dividend equivalents before vesting should be considered participating securities and included in basic earnings per share. The Company’s adoption of FSP EITF 03-6-1 did not have a material effect on previously issued or current earnings per share.

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 141(R), Business Combinations (“SFAS 141R”). SFAS 141R replaces SFAS 141, Business Combinations, and applies to all transactions or other events in which an entity obtains control of one or more businesses. SFAS 141R requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement date for all assets acquired and liabilities assumed; and requires the acquirer to disclose additional information needed to evaluate and understand the nature and financial effect of the business combination. The Company’s adoption of SFAS 141R did not have a material effect on the Company’s consolidated financial statements.

The Company adopted SFAS No. 157, Fair Value Measurements (“SFAS 157”) as of January 1, 2008 for all financial instruments valued on a recurring basis, at least annually. Effective January 1, 2009, the Company, in accordance with FASB FSP No 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”), adopted SFAS 157 for all non-financial instruments accounted for at fair value on a non-recurring basis. SFAS 157 establishes a hierarchy for information and valuations used in measuring fair value, which is broken down into three levels. Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities. Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1. Level 3 valuations are based on information that is unobservable and significant to the overall fair value measurement.

In April 2009, the FASB issued FSP 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009. FSP 157-4 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, FSP 157-4 requires comparative disclosures only for periods ending after initial adoption. The Company’s adoption of FSP 157-4 did not have a material effect on the Company’s consolidated financial statements.

Effective January 1, 2009, the Company adopted SFAS 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest (or minority interests) in a subsidiary and for the deconsolidation of a subsidiary by requiring all noncontrolling interests in subsidiaries be reported in the same way, as equity in the consolidated financial statements. As such, SFAS 160 has eliminated the diversity in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transactions. The Company’s adoption of SFAS 160 did not have a material effect on the Company’s consolidated financial statements.

Effective January 1, 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133 (“SFAS 161”). SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities and is effective for fiscal years and interim periods beginning after November 15, 2008. Since SFAS 161 only required additional disclosure, the adoption did not impact the Company’s consolidated results of operations, financial condition or cash flows. See Note 9 for the Company’s disclosures about its derivative instruments and hedging activities.

In April 2009, the FASB issued FSP 107-1 and Accounting Principles Board (“APB”) 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP 107-1”). FSP 107-1 amends SFAS No. 107, Disclosures About Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. FSP 107-1 also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. FSP 107-1 is effective for interim reporting periods ending after June 15, 2009. FSP 107-1 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, FSP 107-1 requires comparative disclosures only for periods ending after initial adoption. The Company’s adoption of FSP 107-1 did not have a material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2 and 124-2”). FSP 115-2 and 124-2 amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. FSP 115-2 and 124-2 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. FSP 115-2 and 124-2 is effective for interim and annual reporting periods ending after June 15, 2009. FSP 115-2 and 124-2 does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, FSP 115-2 and 124-2 requires comparative disclosures only for periods ending after initial adoption. The Company’s adoption of FSP 115-2 and 124-2 did not have a material effect on the determination or reporting of our financial results.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165”). This standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this standard sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for fiscal years and interim periods ended after June 15, 2009 and will be applied prospectively. The Company’s adoption of SFAS 165 did not have a material effect on the Company’s consolidated financial statements. The Company evaluated subsequent events through the date the accompanying financial statements were issued, which was July 31, 2009.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140 (“SFAS 166”). The new standard eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company will adopt SFAS 166 in 2010 and is evaluating the impact it will have to the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS No. 167, Amending FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 amends FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, in determining whether an enterprise has a controlling financial interest in a variable interest entity. This determination identifies the primary beneficiary of a variable interest entity as the enterprise that has both the power to direct the activities of a variable interest entity that most significantly impacts the entity’s economic performance, and the obligation to absorb losses or the right to receive benefits of the entity that could potentially be significant to the variable interest entity. SFAS 167 requires ongoing reassessments of whether an enterprise is the primary beneficiary and eliminates the quantitative approach previously required for determining the primary beneficiary. The Company will adopt SFAS 167 in 2010 and is evaluating the impact it will have to the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS No. 168, The “FASB Accounting Standards Codification” and the Hierarchy of Generally Accepted Accounting Principles (“SFAS 168”). This standard replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, and establishes only two levels of U.S. generally accepted accounting principles (“GAAP”), authoritative and nonauthoritative. The FASB Accounting Standards Codification (the “Codification”) will become the source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the Securities and Exchange Commission (“SEC”), which are sources of authoritative GAAP for SEC registrants. All other nongrandfathered, non-SEC accounting literature not included in the Codification will become nonauthoritative. This standard is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. The Company will begin to use the new guidelines and numbering system prescribed by the Codification when referring to GAAP in the third quarter of 2009. As the Codification was not intended to change or alter existing GAAP, it will not have any impact on the Company’s consolidated financial statements.

2. EARNINGS PER SHARE

Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares. When the effects are not anti-dilutive, diluted earnings per share is calculated using the weighted-average outstanding common shares, participating securities and the dilutive effect of all other stock-based compensation awards as determined under the treasury stock method. Certain stock options and shares of non-vested stock are excluded from the computation of earnings per share due to their anti-dilutive effect. A reconciliation of shares used in calculating basic and diluted earnings per share follows:

		Three Months Ended June 30,								Six Months Ended June 30,
(thousands of shares)		2009				2008				2009				2008
Basic weighted average shares outstanding			119,274				120,885				119,066				121,798
Effect of common stock equivalents — stock options and non-vested stock under employee compensation plans (1)			—				656				—				754
Diluted weighted average shares outstanding (1)			119,274				121,541				119,066				122,552
Weighted average anti-dilutive common stock equivalents (1)			11,250				8,358				11,216				6,264

3. STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with SFAS No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”). Under the fair-value recognition provisions of SFAS 123R, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, which is generally the vesting period, net of estimated forfeitures. The Company presents excess tax benefits from the exercise of stock options as a financing activity in the consolidated statement of cash flows. Excess tax benefits are realized benefits from tax deductions for exercised options in excess of the deferred tax asset attributable to stock-based compensation costs for such options.

The Company awards non-vested stock to employees, directors and executive officers in the form of Restricted Stock Awards (“RSA”) and Restricted Stock Units (“RSU”), market-based RSA and RSU, stock options and performance-based RSA and RSU. The Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approves all stock-based compensation awards. The Company uses the fair-market value of the Company’s common stock on the date the award is approved to measure fair-value for non-vested stock awards, a Monte Carlo simulation model to determine both the fair-value and requisite service period of market-based awards and the Black-Scholes option-pricing model to determine the fair-value of stock option awards. The awards are amortized over the requisite service period on a straight-line basis, net of estimated forfeitures.

The Company recognized pre-tax compensation expense in the consolidated statement of operations related to stock-based compensation as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2009				2008				2009				2008
Non-vested stock, included in salaries and related		$	9,816			$	8,351			$	19,965			$	13,557
Non-vested stock, included in restructuring and other special charges			—				—				—				1,162
Stock options, included in salaries and related			104				182				303				309
Total		$	9,920			$	8,533			$	20,268			$	15,028

During the first quarter of 2009, certain accrued bonuses were paid with 339,550 shares of common stock with a fair value of $2,275.

During the first six months of 2009, the Company granted RSA of 2,844,305 shares and RSU of 1,054,259 shares to approximately 3,000 employees, executive officers and directors that vest in various increments on the anniversaries of the individual grant dates through March 25, 2013, subject to the recipient’s continued employment or service through each applicable vesting date.

The Company’s non-vested stock activity for the six months ended June 30, 2009 is as follows:

						Weighted Average
						Fair Value at Grant
(thousands of shares)		Shares				Date
Non-vested at January 1, 2009			5,612			$	24.57
Granted			3,899				6.73
Forfeited			(323	)			21.11
Vested			(687	)			31.01
Non-vested at June 30, 2009			8,501			$	16.53

As of June 30, 2009, the unrecognized compensation expense related to non-vested stock was approximately $108,625 and is expected to be recognized over a period of 4 years. These awards are being amortized over the requisite service periods on a straight-line basis.

The Company’s stock option activity for the six months ended June 30, 2009 is as follows:

										Weighted Average
						Weighted Average				Contractual Term				Aggregate
(thousands of shares)		Shares				Exercise Price				(in years)				Intrinsic Value
Outstanding at January 1, 2009			6,290			$	30.58
Exercised			(1	)			8.68
Forfeited/expired/cancelled			(918	)			28.84
Outstanding at June 30, 2009			5,371			$	31.32				2.36			$	1,019
Options exercisable at June 30, 2009			5,184			$	31.33				2.22			$	1,019

Aggregate intrinsic value is calculated as the difference between the closing market price of the Company’s common stock as of June 30, 2009 and the exercise price of the underlying options. During six months ended June 30, 2009 and 2008, the aggregate intrinsic value of options exercised was $2 and $421, respectively. As of June 30, 2009, the unrecognized compensation expense for stock options was $1,296 and is expected to be recognized over a period of 2.6 years.

4. BUSINESS COMBINATIONS

The following table summarizes the Company’s business combinations completed from January 1, 2008 through June 30, 2009. Although the following acquired businesses were not considered to be significant subsidiaries, either individually or in the aggregate, they do affect the comparability of results from period to period. The acquisitions, acquisition dates and business segments are as follows:

Acquired Business		Acquisition Date		Business Segment
China HR.com Holdings Ltd. (“ChinaHR”)		October 8, 2008		Careers — International
Trovix Inc.		July 31, 2008		Careers — North America
Affinity Labs Inc.		January 3, 2008		Internet Advertising & Fees

On October 8, 2008, the Company’s Careers — International segment completed its acquisition of the remaining 55.6% ownership interest in ChinaHR not already owned by the Company. ChinaHR is a leading recruitment website in China and provides online recruiting, campus recruiting and other human resource solutions. Consideration for the acquisition was approximately $166,641 in cash, net of cash acquired. The Company recorded $236,483 of goodwill (on a preliminary basis), $16,456 of intangible assets, $4,568 of property and equipment, $4,192 of receivables, $1,074 of other assets, $1,055 of deferred tax assets, net, $8,281 of deferred revenue, $21,171 for transactional and acquired liabilities and $893 of short-term credit facility debt. The Company also consolidated its ChinaHR related assets of $41,588 in investment in unconsolidated affiliates and $25,254 in notes and interest receivable (recorded in Other Assets prior to consolidation of ChinaHR) into the purchase accounting for ChinaHR. The goodwill recorded in connection with the acquisition will not be deductible for tax purposes.

On July 31, 2008, the Company’s Careers — North America segment purchased Trovix Inc., a business that provides career-related products and services that utilize advanced search technology focusing on key attributes such as skills, work history and education. Consideration for the acquisition was approximately $64,290 in cash, net of cash acquired. The Company recorded $56,725 of goodwill, $2,659 of deferred tax assets, $1,421 of receivables, $6,475 of purchased technology, $545 of property and equipment, $115 of other assets and $3,650 for transactional and acquired liabilities. The goodwill recorded in connection with the acquisition will not be deductible for tax purposes. The Company also placed $3,437 into escrow related to future compensation for the former owners, which is being amortized as compensation expense over the service period.

On January 3, 2008, the Company’s Internet Advertising & Fees segment purchased Affinity Labs Inc., a business that operates a portfolio of professional and vocational communities for people entering, advancing and networking in certain occupations including law enforcement, healthcare, education, government and technology. Consideration for the acquisition was $61,567 in cash, net of cash acquired. The Company recorded $58,822 of goodwill, $1,251 of receivables, $2,000 of intangible assets, $500 of purchased technology, $183 of property and equipment, $22 of other assets and $1,211 of liabilities. The goodwill recorded in connection with the acquisition will not be deductible for tax purposes.

5. FAIR VALUE MEASUREMENT

The Company values its assets and liabilities using the methods of fair-value as described in SFAS 157. SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Level 1 is defined as observable inputs such as quoted prices in active markets; Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counter-party credit risk in its assessment of fair value. The Company has certain assets and liabilities that are required to be recorded at fair value on a recurring basis in accordance with accounting principals generally accepted in the United States. These assets include cash equivalents, available-for-sale securities, the UBS put option (as discussed in Note 6) and lease exit liabilities. The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of June 30, 2009:

		Level 1				Level 2				Level 3				Total
Assets:
Money market funds		$	46,570			$	—			$	—			$	46,570
Bank time deposits			—				31,432				—				31,432
Commercial paper			—				122,274				—				122,274
Government bonds foreign			—				9,077				—				9,077
Tax exempt auction rate bonds (Note 6)			—				—				89,321				89,321
UBS put option (Note 6)			—				—				166				166
Total Assets		$	46,570			$	162,783			$	89,487			$	298,840
Liabilities:
Lease exit liability			—				—				24,263				24,263
Total Liabilities		$	—			$	—			$	24,263			$	24,263

The lease exit liabilities relate to abandoned facilities associated with previous discontinued operations and realignment activities of the Company. The fair value of the Company’s lease exit liabilities within the Level 3 classification is based on a discounted cash flow model over the remaining term of the leased property.

The changes in the fair value of the Level 3 assets are as follows:

		Tax Exempt
		Auction Rate
		Bonds
Balance, December 31, 2008		$	90,347
Redemptions			(900	)
Unrealized gain included in other comprehensive income			125
Unrealized loss included in interest and other, net			(251	)
Balance, June 30, 2009		$	89,321

		UBS Put Option
Balance, December 31, 2008		$	—
Unrealized gain included in interest and other, net			166
Balance, June 30, 2009		$	166

		Lease Exit Liability
Balance, December 31, 2008		$	—
Transfers into Level 3			24,263
Balance, June 30, 2009		$	24,263

The carrying value for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, deferred revenue and other current liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments. The Company’s debt relates to borrowings under credit facilities, which approximates fair value due to market interest rates.

6. INVESTMENTS

Marketable Securities

As of June 30, 2009, the Company held $91,050 (at par and cost value) of investments in auction rate securities. These securities are variable-rate debt instruments whose underlying agreements have contractual maturities of up to 33 years. The majority of these securities have been issued by state-related higher-education agencies and are collateralized by student loans guaranteed by the U.S. Department of Education. These auction rate securities were intended to provide liquidity via an auction process that resets the applicable interest rate at predetermined calendar intervals, usually every 35 days, allowing investors to either roll over their holdings or gain immediate liquidity by selling such interests at par. Since mid-February 2008, liquidity issues in the global credit markets have resulted in the failure of auctions representing all of the Company’s auction rate securities, as the amount of securities submitted for sale in those auctions exceeded the amount of bids. The funds associated with failed auctions will not be accessible until a successful auction occurs, a buyer is found outside of the auction process, the issuers redeem their bonds or the bonds mature according to contractual terms. The Company currently has the ability and intent to hold these auction rate securities until a recovery of the auction process, until maturity or until these investments can be otherwise liquidated at par. As a result of the persistent failed auctions, and the uncertainty of when these investments could be successfully liquidated at par, the Company has classified all of its investments in auction rate bonds as available-for-sale securities, which are recorded as non-current marketable securities (with the exception of the auction rate securities marketed and sold by UBS AG and its affiliates (collectively, “UBS”) as of June 30, 2009, see below) in the consolidated balance sheets as of December 31, 2008 and June 30, 2009. Typically, when auctions are successful, the fair value of auction rate securities approximate par value due to the frequent interest rate resets.

While the Company continues to earn interest on its auction rate securities at the maximum contractual rate (which was a blended rate of 0.78% at June 30, 2009) and there has been no payment default with respect to such securities, these investments are not currently trading and therefore do not currently have a readily determinable market value. Accordingly, the estimated fair value of these auction rate securities no longer approximates par value. The Company uses third party valuation and other available market observables that considered, among other factors, (a) the credit quality of the underlying collateral (typically student loans); (b) the financial strength of the counterparties (typically state related higher education agencies) and the guarantors (including the U.S. Department of Education); (c) an estimate of when the next successful auction date will occur; and (d) the formula applicable to each security which defines the interest rate paid to investors in the event of a failed auction, forward projections of the interest rate benchmarks specified in such formulas, a tax exempt discount margin for the cash flow discount and all applicable embedded options such as the put, call and sinking fund features.

The Company also used available data sources for market observables, which were primarily derived from third party research provided by or available from well-recognized research entities and sources. To the extent market observables were not available as of the valuation date, a statistical model was used to project the variables based on the historical data and in cases where historical data was not available comparable securities or a benchmark index was identified and used for estimation. When comparables were not available, industrial averages were used or standard assumptions based on industry practices were used.

Based on these valuations, the auction rate securities with an original par value and cost of $91,050 were written down to an estimated fair value of $89,321 as of June 30, 2009. The write-down of these securities resulted in an unrealized loss of $251, reported in interest and other, net in the consolidated statement of operations for the six months ended June 30, 2009 (relating to the auction rate securities marketed and sold by UBS, see below), and an unrealized gain of $125 for the six months ended June 30, 2009 that has been reflected in accumulated other comprehensive income, a component of stockholders’ equity. For the year ended December 31, 2008, the Company recorded an unrealized loss of $1,603, which was reflected in accumulated other comprehensive income. The losses in accumulated other comprehensive income are deemed to be a temporary impairment because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost basis. The instability in the credit markets may affect the Company’s ability to liquidate these auction rate bonds in the short term. The Company believes that the failed auctions experienced to date are not a result of the deterioration of the underlying credit quality of the securities and the Company believes that it will ultimately recover all amounts invested in these securities, with the exception of the auction rate securities marketed and sold by UBS, see below. The Company will continue to evaluate the fair value of its investments in auction rate securities each reporting period for a potential other-than-temporary impairment.

Included in the Company’s auction rate securities portfolio are approximately $8,300 of auction rate securities which were marketed and sold by UBS. On November 11, 2008, the Company accepted a settlement with UBS pursuant to which UBS issued to the Company Series C-2 Auction Rate Securities Rights (the “ARS Rights”). The ARS Rights provide the Company the right to receive the par value of our UBS-brokered auction rate securities plus accrued but unpaid interest. The settlement provides that the Company may require UBS to purchase its UBS-brokered auction rate securities at par value at any time between June 30, 2010 and July 2, 2012. The ARS Rights are not transferable, tradable or marginable, and will not be listed or quoted on any securities exchange or any electronic communications network. As part of the settlement, UBS agrees to provide loans through June 30, 2010 up to 100% of the par value of the UBS-brokered auction rate securities that which the Company will pledge as collateral. The interest rates for such UBS loans will be equivalent to the interest rate we earn on our UBS-brokered auction rate securities. Accordingly, the Company has recorded the unrealized losses of $251 as a charge to interest and other in the consolidated statement of operations for the six months ended June 30, 2009 due to the impairment being other-than-temporary. Since the Company may require UBS to purchase its UBS-brokered auction rate securities at par value at any time beginning on June 30, 2010, the Company has classified the fair value of these UBS-brokered auction rate securities as current in the condensed consolidated balance sheet as of June 30, 2009.

The ARS Rights represent a firm agreement in accordance with SFAS 133, Accounting for Derivative and Hedging Activities. The enforceability of the ARS Rights results in the creation of an asset akin to a put option, which is a free standing asset separate from the UBS-brokered auction rate securities. We valued the put option using a discounted cash flow model with the following key assumptions: (a) contractual interest on the underlying UBS-brokered auction rate securities continues to be received, (b) discount rates ranging from 2.60% to 2.85%, which incorporates a spread for credit, liquidity, downgrade and default risks and (c) the Company selects the optimal exercise between June 30, 2010 and July 2, 2012. This discounted cash flow model valued the put option as of June 30, 2009 at $166, which was recorded as a non-current asset in the consolidated balance sheet as of June 30, 2009 with the corresponding credit to interest and other in the consolidated statement of operations for the six months ended June 30, 2009. The put option does not meet the definition of a derivative instrument under SFAS 133 because the terms of the put option do not provide for net settlement, as the Company must tender the auction rate securities to receive the settlement and the auction rate securities are not readily convertible to cash. Therefore, the Company has elected to measure the put option at fair value under SFAS 159, which permits an entity to elect the fair value option for recognized financial assets, in order to match the changes in the fair value of the auction rate securities. As a result, unrealized gains and losses from changes in fair value will be included in earnings in future periods.

The Company’s available-for-sale investments reported as current and non-current marketable securities as of June 30, 2009 are as follows:

						Gross unrealized				Gross unrealized				Estimated fair
		Cost				losses				gains				value
Current
Government bonds foreign		$	6,484			$	—			$	—			$	6,484
Tax-exempt auction rate bonds (UBS-brokered)			8,300				251			$	—			$	8,049
Total		$	14,784			$	251			$	—			$	14,533
Non-current
Tax-exempt auction rate bonds		$	82,750			$	1,478			$	—			$	81,272
Total		$	82,750			$	1,478			$	—			$	81,272

The Company reviews impairments associated with the above to determine the classification of the impairment as “temporary” or “other-than-temporary” in accordance with FASB Staff Position Nos. SFAS 115-1 and 124-1, The Meaning of Other-Than-Temporary-Impairment and Its Application to Certain Investment and FSP 115-1 and 124-2. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of stockholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. As of June 30, 2009, the Company believes that all of the impairment of its auction rate securities investments, with the exception of the UBS-brokered auction rate securities, is temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral. While the recent auction failures may limit the Company’s future ability to liquidate these investments, the Company does not believe the auction failures will materially impact its ability to fund its working capital needs, capital expenditures, stock repurchases, acquisitions or other business requirements. Investments with temporary impairments that have continuously been in a loss position for more than 12 months have an original par value and cost of $82,750 and gross unrealized losses of $1,478.

Equity Investments

The Company has a 25% equity investment in a company located in Finland related to a business combination completed in 2001. The carrying value of the investment was $130 as of June 30, 2009 and was recorded on the consolidated balance sheet as a component of other assets.

In the fourth quarter of 2008, the Company acquired a 50% equity interest in a company located in Australia. During the six months ended June 30, 2009, the Company funded additional working capital requirements and incurred additional transaction costs of $3,314. The carrying value of the investment was $387 as of June 30, 2009 and was recorded on the consolidated balance sheet as a component of other assets.

On October 8, 2008, the Company completed its acquisition of the remaining 55.6% ownership interest in ChinaHR not previously owned by the Company. See Note 4 for additional details on the ChinaHR business combination. Accordingly, prior to October 8, 2008, the Company included its percentage of the results of ChinaHR in income and loss in equity interests, net.

Income and loss in equity interests, net are based upon unaudited financial information and are as follows by equity investment:

		Three Months Ended June 30,								Six Months Ended June 30,
		2009				2008				2009				2008
ChinaHR		$	—			$	(3,843	)		$	—			$	(6,000	)
Finland			3				251				104				586
Australia			(1,193	)			—				(2,533	)			—
Loss in equity interests, net		$	(1,190	)		$	(3,592	)		$	(2,429	)		$	(5,414	)

7. RESTRUCTURING AND OTHER SPECIAL CHARGES

On July 30, 2007, the Company announced a strategic restructuring plan intended to position the Company for sustainable long-term growth in the rapidly evolving global online recruitment and advertising industry. The restructuring plan was originally designed to reduce the Company’s workforce by approximately 800 associates. Subsequent to announcement of this plan, the Company identified approximately 100 associates in the customer service function who will now be staying with the Company. Through June 30, 2009, the Company has notified or terminated approximately 700 associates and approximately 140 associates have voluntarily left the Company. These initiatives were introduced to reduce the growth rate of operating expenses and provide funding for investments in new product development and innovation, enhanced technology, global advertising campaigns and selective sales force expansion. As of June 30, 2009, all of the initiatives relating to the 2007 restructuring program are complete and no new charges will be incurred in the future relating to this program. Since the inception of the 2007 restructuring program through June 30, 2009, we have incurred $49,109 of restructuring expenses.

Restructuring and other special charges and related liability balances are as follows:

														Non-Cash
		December 31, 2008				Expense				Cash Payments				Utilization				June 30, 2009
Workforce reduction		$	2,749			$	7,731			$	(4,687	)		$	—			$	5,793
Fixed asset write-offs and accelerated amortization			—				4,721				—				(4,721	)			—
Consolidation of office facilities			869				2,876				(643	)			—				3,102
Other costs and professional fees			101				777				(217	)			—				661
Total		$	3,719			$	16,105			$	(5,547	)		$	(4,721	)		$	9,556

8. PROPERTY AND EQUIPMENT, NET

		June 30, 2009				December 31, 2008
Capitalized software costs		$	177,587			$	169,497
Furniture and equipment			30,147				30,500
Leasehold improvements			31,375				30,265
Computer and communications equipment			175,180				165,198
			414,289				395,460
Less: accumulated depreciation			260,347				234,178
Property and equipment, net		$	153,942			$	161,282

Depreciation expense was $28,248 and $23,133 for the six months ended June 30, 2009 and 2008, respectively.

Additionally, during 2009, the Company recorded $3,848 of restructuring charges relating to accelerated amortization associated with certain capitalized software costs which were abandoned in the second quarter of 2009 as well as $873 of asset impairment write-offs associated with the consolidation of office facilities.

9. FINANCIAL DERIVATIVE INSTRUMENTS

The Company uses forward foreign exchange contracts as cash flow hedges to offset risks related to foreign currency transactions. These transactions primarily relate to non-functional currency denominated inter-company funding loans and non-functional currency accounts receivable and non-functional currency indebtedness.

The fair value gain (loss) position (recorded in interest and other in the consolidated statements of operations) of our derivatives at June 30, 2009 and December 31, 2008 are as follows:

		June 30, 2009
		Notional Balance				Maturity Date				Accrued Expenses
Designated as Hedges under SFAS 133
None			—				—				—
Not Designated as Hedges under SFAS 133
Foreign currency exchange forwards		$23,650 consisting of 7 different currency pairs				July — August 2009				$	(2	)
Total Derivative Instruments										$	(2	)

		December 31, 2008
		Notional Balance				Maturity Date				Accrued Expenses
Designated as Hedges under SFAS 133
None			—				—				—
Not Designated as Hedges under SFAS 133
Foreign currency exchange forwards		$33,200 consisting of 3 different currency pairs				January 2009				$	(100	)
Total Derivative Instruments										$	(100	)

During the first six months of 2009, net losses of $2,061, from realized net losses and changes in the fair value of our forward contracts, were recognized in other income in the consolidated statement of operations.

10. DISCONTINUED OPERATIONS

During the second quarter of 2008, the Company decided to wind-down the operations of Tickle, an online property within the Internet Advertising & Fees segment, and have classified the historical results of Tickle as a component of discontinued operations. The Company’s decision was based upon Tickle’s non-core offerings, which no longer fit the Company’s long-term strategic growth plans, and Tickle’s lack of profitability. Tickle’s discontinued operations for the first six months of 2008 included the write-down of $13,201 of long-lived assets, an income tax benefit of $29,355 and a net loss of $5,056 from Tickle’s operations. The income tax benefit included $25,500 of current tax benefits for operating losses and tax losses incurred upon Tickle’s discontinuance and $3,855 of deferred tax benefits for the reversal of deferred tax liabilities on long-term assets.

For the three and six months ended June 30, 2009 and 2008, the revenue and costs related to the Company’s discontinued and disposed businesses were segregated from continuing operations and reflected as discontinued operations in the consolidated statement of operations and are as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenue		$	—			$	2,264			$	—			$	6,158
Loss before income taxes			—				(16,323	)			—				(18,257	)
Income tax benefit			—				(28,592	)			—				(29,355	)
Income from discontinued operations, net of tax		$	—			$	12,269			$	—			$	11,098

11. FINANCING AGREEMENTS

In December 2007, the Company entered into a senior unsecured revolving credit facility that provides for maximum borrowings of $250,000. The credit facility expires December 21, 2012 and is available for ongoing working capital requirements and other corporate purposes. Under the credit facility, loans bear interest, at the Company’s option, at either (i) the higher of (a) the Bank of America prime rate or (b) the overnight federal funds rate plus 1/2 of 1% or (ii) LIBOR plus a margin ranging from 30 basis points to 77.5 basis points depending on the Company’s ratio of consolidated funded debt to consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) as defined in the revolving credit agreement. The Company may repay outstanding borrowings at any time during the term of the credit facility without any prepayment penalty. The credit agreement contains covenants which restrict, among other things, the ability of the Company to borrow, create liens, pay dividends, repurchase its common stock, acquire businesses and other investments, enter into new lines of business, dispose of property, guarantee debts of others, lend funds to affiliated companies and contains requirements regarding the criteria on the maintenance of certain financial statement amounts and ratios, all as defined in the revolving credit agreement. As of June 30, 2009, the Company was in full compliance with its covenants.

At June 30, 2009, the utilized portion of this credit facility was $97,000 in borrowings and $1,746 for standby letters of credit and $151,254 was unused. At June 30, 2009, the one month US Dollar LIBOR rate, overnight federal funds rate, and Bank of America prime rate were 0.31%, 0.22% and 3.25%, respectively. As of June 30, 2009, the Company used the one month and two week US Dollar LIBOR rate for the interest rate on these borrowings with a blended interest rate of 0.85%.

The Company’s ChinaHR subsidiary has entered into two unsecured uncommitted revolving credit facilities guaranteed by the Company that provide for maximum borrowings of $14,802. The ChinaHR credit facilities have a maximum tenure of one year and the lenders can terminate the facilities at any time and demand immediate payment. ChinaHR may prepay these loans and accrued interest with the consent of the lenders. ChinaHR is obligated to indemnify the lenders for any costs and losses incurred by the lenders or pay the lenders such other charges that result from such prepayment. The credit agreements contain covenants which include providing audited annual financial statements, obtaining, complying with and maintaining all verifications, authorizations, approvals, registrations, licenses and consents required by local law to perform ChinaHR’s obligations to the lenders under the loan agreements, notifying the lenders forthwith of the occurrence of any significant changes in ChinaHR’s financial condition or other events that may affect ChinaHR’s ability to perform any of its obligations under the loan agreements and using the credit facilities for financing its working capital requirements. As of June 30, 2009, the Company and ChinaHR were each in full compliance with their respective covenants. As of June 30, 2009, there were no borrowings under these credit facilities, one revolving credit facility was cancelled and the remaining credit facility provided for a maximum borrowing of $9,802. In July of 2009, the remaining unsecured uncommitted revolving credit facility was cancelled.

12. COMPREHENSIVE INCOME (LOSS)

The Company’s comprehensive income (loss) is as follows:

		Three Months ended								Six Months ended
		June 30,								June 30,
		2009				2008				2009				2008
Net (loss) income		$	(1,370	)		$	30,830			$	(11,711	)		$	53,421
Foreign currency translation adjustment			19,054				(12,744	)			2,434				26,247
Net unrealized gain (loss) on available-for-sale securities			979				178				125				(1,370	)
Comprehensive income (loss)		$	18,663			$	18,264			$	(9,152	)		$	78,298

13. INCOME TAXES

The provision for income taxes consists of provisions for federal, state and foreign income taxes. The Company operates globally with operations in various locations outside the United States. Accordingly, the effective income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.

The gross liability for uncertain tax positions under FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — An interpretation of FASB Statement No. 109, (inclusive of estimated interest and penalties thereon) at June 30, 2009 and December 31, 2008 is recorded as long-term taxes payable of $125,991 and $119,951, respectively. Interest and penalties related to underpayment of income taxes are classified as a component of income tax expense in the consolidated statement of operations.

The Company is currently under examination in several domestic and international tax jurisdictions. Presently, no material adjustments have been proposed. The Company estimates that it is reasonably possible that unrecorded tax benefits may be reduced by as much as $35,000 in the next twelve months due to the expirations of statute of limitations.

14. SEGMENT AND GEOGRAPHIC DATA

The Company conducts business in three reportable segments: Careers—North America; Careers—International; and Internet Advertising & Fees. Corporate operating expenses are not allocated to the Company’s reportable segments. See Note 1 for a description of the Company’s operating segments.

The Company’s operations by business segment and by geographic region are as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Revenue		2009				2008				2009				2008
Careers — North America		$	101,799			$	164,280			$	220,983			$	347,818
Careers — International			88,598				156,673				192,263				309,945
Internet Advertising & Fees			32,660				33,341				64,214				63,003
Revenue		$	223,057			$	354,294			$	477,460			$	720,766

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Operating (Loss) Income		2009				2008				2009				2008
Careers — North America		$	10,918			$	58,409			$	11,747			$	98,110
Careers — International			(2,019	)			31,916				(2,690	)			41,559
Internet Advertising & Fees			4,925				4,656				8,483				3,225
Corporate expenses			(14,163	)			(63,732	)			(32,673	)			(78,301	)
Operating (loss) income		$	(339	)		$	31,249			$	(15,133	)		$	64,593

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Depreciation and Amortization		2009				2008				2009				2008
Careers — North America		$	7,662			$	5,806			$	14,962			$	10,950
Careers — International			7,430				6,158				14,691				11,721
Internet Advertising & Fees			1,751				1,523				3,409				2,886
Corporate expenses			102				118				203				236
Depreciation and amortization		$	16,945			$	13,605			$	33,265			$	25,793

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Restructuring and Other Special Charges		2009				2008				2009				2008
Careers — North America		$	1,487			$	926			$	3,758			$	3,956
Careers — International			3,278				1,400				10,368				4,516
Internet Advertising & Fees			171				338				616				1,119
Corporate expenses			161				68				1,363				68
Restructuring and other special charges		$	5,097			$	2,732			$	16,105			$	9,659

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Revenue by Geographic Region		2009				2008				2009				2008
United States		$	130,184			$	190,115			$	276,154			$	396,260
Germany			17,697				37,491				39,899				74,994
Other foreign			75,176				126,688				161,407				249,512
Revenue		$	223,057			$	354,294			$	477,460			$	720,766

The Company’s total assets by business segment are as follows:

Total Assets by Segment		June 30, 2009				December 31, 2008
Careers — North America		$	578,032			$	657,730
Careers — International			765,371				843,007
Internet Advertising & Fees			188,164				188,507
Corporate			112,311				83,217
Shared assets (a)			145,589				144,129
Total assets		$	1,789,467			$	1,916,590

The Company’s long-lived assets by geographic region are as follows:

Long-lived Assets by Geographic Region (a)

		June 30, 2009				December 31, 2008
United States		$	114,146			$	117,738
International			39,796				43,544
Total long-lived assets		$	153,942			$	161,282

15. STOCK OPTION INVESTIGATIONS AND LITIGATION

The Company is involved in various legal proceedings that are incidental to the conduct of its business. Aside from the matters discussed below, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition or results of operations.

Stock Option Investigations and Related Litigation

In connection with the investigations conducted by the United States Attorney for the Southern District of New York (“USAO”) and the SEC, on May 12, 2009, a former senior executive of the Company and member of the Company’s Board of Directors was convicted in the United States District Court for the Southern District of New York of securities fraud and conspiracy (a civil action commenced by the SEC against him and the Company’s former Controller remains pending).

On May 18, 2009, the Company announced that it had agreed, without admitting or denying wrongdoing, to pay a $2,500 penalty to the SEC to settle claims arising out of the Commission’s inquiry into the Company’s stock option granting practices. The final judgment approving the settlement was entered by the United States District Court for the Southern District of New York on May 21, 2009.

The Company is currently party to one civil action pending against it in connection with its historical stock option granting practices. That action, which names certain current and former officers and directors of the Company, was filed as a putative class action litigation in the United States District Court for the Southern District of New York in October 2006. The complaint, as amended in February 2007, was purportedly brought on behalf of all participants in the Company’s 401(k) Plan (the “Plan”). On December 14, 2007, the Court granted the defendants’ motions to dismiss. On February 15, 2008, plaintiffs filed a second amended complaint (“SAC”) alleging that the defendants breached their fiduciary obligations to Plan participants under Sections 404, 405, 409 and 502 of the Employee Retirement Income Security Act (“ERISA”) by allowing Plan participants to purchase and to hold and maintain Company stock in their Plan accounts without disclosing to those Plan participants the historical stock option practices. The SAC seeks, among other relief, equitable restitution, attorney’s fees and an order enjoining defendants from violations of ERISA. On July 8, 2008, the Court denied defendants’ motions to dismiss the SAC. Discovery has commenced.

Litigation Relating to the Company’s Discontinued Tickle Business

In July 2006, a putative class action entitled Ed Oshaben v. Tickle Inc., Emode.com, Inc. and Monster Worldwide, Inc. (Case No. CGC-06-454538) was filed against the Company and its Tickle Inc. subsidiary in California State Court. An amended complaint was subsequently filed. The amended complaint alleges that Tickle engaged in deceptive consumer practices and purports to be a class action representing all users who purchased a test report from Tickle and received “unauthorized charges.” The amended complaint alleges various violations of the California consumer and unfair business practice statutes and seeks, among other things, unspecified restitution for the class, disgorgement of revenues, compensatory damages, punitive damages, attorneys’ fees and equitable relief. On January 21, 2009, the parties executed a definitive written Settlement Agreement, which is subject to court approval and has been accrued for as of December 31, 2008. By Order dated February 27, 2009, the Court granted preliminary approval of the proposed settlement. On June 5, 2009, final approval of the proposed settlement was granted.

In May 2008, Fotomedia Technologies, LLC filed suit against the Company’s Tickle business for allegedly infringing three patents by operating photo sharing services on a website operated by Tickle. The lawsuit—entitled Fotomedia Technologies, LLC v. Fujifilm U.S.A., Inc., et al. (Civil Action No. 2:08-cv-203)—is pending in the United States District Court for the Eastern District of Texas and there are 23 other named defendants. The plaintiff seeks a permanent injunction and monetary relief. The Court has not yet entered a schedule in the case. The Company took down the website accused of infringement for reasons unrelated to the lawsuit and intends to vigorously defend this matter.

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
Monster Worldwide, Inc.
New York, New York

We have reviewed the consolidated balance sheet of Monster Worldwide, Inc. (the “Company”) as of June 30, 2009, and the related consolidated statements of operations for the three and six month periods ended June 30, 2009 and 2008 and cash flows for the six month periods ended June 30, 2009 and 2008 included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended June 30, 2009. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the accounting principles generally accepted in the United States.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of Monster Worldwide, Inc. as of December 31, 2008, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 10, 2009, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2008 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ BDO SEIDMAN, LLP

BDO Seidman, LLP
New York, NY
July 28, 2009

ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Monster Worldwide, Inc. (together with its consolidated subsidiaries, the “Company,” “Monster Worldwide,” “we,” “our” or “us”) makes forward-looking statements in this report and in other reports and proxy statements that we file with the United States Securities and Exchange Commission (the “SEC”). Except for historical information contained herein, the statements made in this report constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve certain risks and uncertainties, including statements regarding our 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. These factors include, among other things, the global economic crisis; our ability to maintain and enhance the value of our brands, particularly Monster; competition; fluctuations in our quarterly operating results; our ability to adapt to rapid developments in technology; our ability to continue to develop and enhance our information technology systems; concerns related to our privacy policies and our compliance with applicable data protection laws and regulations; intrusions on our systems; interruptions, delays or failures in the provision of our services; our vulnerability to intellectual property infringement claims brought against us by others; our ability to protect our proprietary rights and maintain our rights to use key technologies of third parties; our ability to identify future acquisition opportunities; our ability to manage future growth; the ability of our divested businesses to satisfy obligations related to their operations; risks related to our foreign operations; our ability to expand our operations in international markets; our ability to attract and retain talented employees; potential write-downs if our goodwill or amortizable intangible assets become impaired; adverse determinations by domestic and/or international taxation authorities related to our estimated tax liabilities; effects of anti-takeover provisions in our organizational documents; volatility in our stock price; risks associated with government regulation; risks related to the investigations and the litigation associated with our historical stock option grant practices; the outcome of pending litigation; and other risks and uncertainties set forth from time to time in our reports and other filings made with the SEC, including under Part I, “Item 1A. Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2008.

Overview

Monster Worldwide is the premier global online employment solution provider, inspiring people to improve their lives, with a presence in approximately 50 countries around the world. We have been able to build on Monster’s brand and create worldwide awareness by offering online recruiting solutions that we believe are redefining the way employers and job seekers connect. For employers, our goal is to provide the most effective solutions and easiest to use technology to simplify the hiring process and deliver access to our community of job seekers. For job seekers, our purpose is to help improve their careers by providing work-related content, services and advice.

Our services and solutions include searchable job postings, a resume database, recruitment media solutions throughout our network and other career related content. Users can search our job postings and post their resumes for free on each of our career websites. Employers pay to post jobs, search the resume database and access other career related services.

Our strategy has been to grow our business both organically and through strategic acquisitions and alliances where the perceived growth prospects fit our plan. Despite the continued weakness in the global economy, we believe the long term growth opportunities overseas are particularly large and believe that we are positioned to benefit from our expanded reach and increased brand recognition around the world. We are positioned to benefit from the continued secular shift towards online recruiting. In addition, through a balanced mix of investment, strategic acquisitions and disciplined operating focus and execution, we believe we can take advantage of this online migration to significantly grow our international business over the next several years.

We also operate a network of websites that connect companies to highly targeted audiences at critical stages in their life. Our goal is to offer compelling online services for the users through personalization, community features and enhanced content. We believe that there are significant opportunities to monetize this web traffic through lead generation, display advertising and other consumer related products. We believe that these properties appeal to advertisers and other third parties as they deliver certain discrete demographics entirely online.

Restructuring Program

We have recorded significant charges and accruals in connection with our 2007 restructuring initiatives and prior business reorganization programs. These accruals include estimates pertaining to future lease obligations, employee separation costs and the settlements of contractual obligations resulting from our actions. These initiatives were introduced to reduce the growth rate of operating expenses and provide funding for investments in new product development and innovation, enhanced technology, global advertising campaigns and selective sales force expansion. As of June 30, 2009, the Company has completed all of the initiatives relating to the 2007 restructuring program and no new charges will be incurred in the future relating to this program. Since the inception of the 2007 restructuring program through June 30, 2009, we have incurred $49.1 million of restructuring expenses.

Business Combinations

For the period January 1, 2008 through June 30, 2009, we completed three business combinations. Although the following acquired businesses were not considered to be significant subsidiaries, either individually or in the aggregate, they do affect the comparability of results from period to period.

Acquired Business		Acquisition Date		Business Segment
China HR.com Holdings Ltd. (“ChinaHR”)		October 8, 2008		Careers — International
Trovix Inc.		July 31, 2008		Careers — North America
Affinity Labs Inc.		January 3, 2008		Internet Advertising & Fees

Discontinued Operations

During the second quarter of 2008, we decided to wind-down the operations of Tickle, an online property within the Internet Advertising & Fees segment, and have classified the historical results of Tickle as a component of discontinued operations. Our decision was based upon Tickle’s product offerings, which no longer fit our long-term strategic growth plans, and Tickle’s lack of profitability. For the three and six months ended June 30, 2009 and 2008, the revenue and costs related to the Company’s discontinued and disposed businesses were segregated from continuing operations and reflected as discontinued operations in the consolidated statement of operations and are as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenue		$	—			$	2,264			$	—			$	6,158
Loss before income taxes			—				(16,323	)			—				(18,257	)
Income tax benefit			—				(28,592	)			—				(29,355	)
Income from discontinued operations, net of tax		$	—			$	12,269			$	—			$	11,098

Results of Operations

Consolidated operating results as a percentage of revenue for the three and six months ended June 30, 2009 and 2008 are as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenue			100.0	%			100.0	%			100.0	%			100.0	%
Salaries and related			50.9	%			38.4	%			49.4	%			38.3	%
Office and general			26.8	%			21.3	%			25.5	%			20.7	%
Marketing and promotion			20.2	%			19.5	%			24.8	%			25.1	%
Provision for legal settlements, net			0.0	%			11.3	%			0.0	%			5.6	%
Restructuring and other special charges			2.3	%			0.8	%			3.4	%			1.3	%
Total operating expenses			100.2	%			91.2	%			103.2	%			91.0	%
Operating (loss) income			(0.2	)%			8.8	%			(3.2	)%			9.0	%
Interest and other, net			0.0	%			0.9	%			0.3	%			1.4	%
(Loss) income from continuing operations before income taxes and loss in equity interests			(0.1	)%			9.7	%			(2.9	)%			10.4	%
(Benefit from) provision for income taxes			0.0	%			(3.4	)%			1.0	%			(3.8	)%
Loss in equity interests, net			(0.5	)%			(1.0	)%			(0.5	)%			(0.8	)%
(Loss) income from continuing operations			(0.6	)%			5.2	%			(2.5	)%			5.9	%
Income from discontinued operations, net of tax			0.0	%			3.5	%			0.0	%			1.5	%
Net (loss) income			(0.6	)%			8.7	%			(2.5	)%			7.4	%

The Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008

Consolidated Revenue, Operating Expenses and Operating (Loss) Income

Consolidated revenue, operating expenses and operating (loss) income for the three months ended June 30, 2009 and 2008 are as follows:

						% of								% of				Increase				% Increase
(dollars in thousands)		2009				Revenue				2008				Revenue				(Decrease)				(Decrease)
Revenue		$	223,057				100.0	%		$	354,294				100.0	%		$	(131,237	)			(37.0	)%
Salaries and related			113,484				50.9	%			135,879				38.4	%			(22,395	)			(16.5	)%
Office and general			59,862				26.8	%			75,358				21.3	%			(15,496	)			(20.6	)%
Marketing and promotion			44,953				20.2	%			68,976				19.5	%			(24,023	)			(34.8	)%
Provision for legal settlements, net			—				0.0	%			40,100				11.3	%			(40,100	)			(100.0	)%
Restructuring and other special charges			5,097				2.3	%			2,732				0.8	%			2,365				86.6	%
Operating expenses			223,396				100.2	%			323,045				91.2	%			(99,649	)			(30.8	)%
Operating (loss) income		$	(339	)			(0.2	)%		$	31,249				8.8	%		$	(31,588	)			(101.1	)%

Our consolidated revenue decreased $131.2 million, or 37%, in the second quarter of 2009 compared to the same period of 2008, which includes $15.9 million of negative impact relating to the effect of the strengthening U.S. dollar in 2009. Careers — International experienced a 43.5% decrease in revenue and Careers — North America experienced a 38.0% decrease in revenue with both segments negatively impacted by the ongoing global recession which has reduced overall hiring demand and forced our customers to reduce their job posting and resume database usage. Internet Advertising & Fees revenue decreased $0.7 million, or 2%.

Our consolidated operating expenses declined $99.6 million, or 30.8%, in the second quarter of 2009 compared to the same period of 2008. This reduction in operating expenses primarily relates to our continued focus on cost reductions and operating efficiencies to partially offset the effects of the lower revenue as well as $40.1 million of legal settlement provisions recorded in the second quarter of 2008. The strengthening U.S. dollar favorably impacted our consolidated operating expenses by approximately $14.8 million in the second quarter of 2009.

Salary and related expenses decreased $22.4 million, or 16.5%, in the second quarter of 2009 compared to the same period of 2008. This reduction in salaries and related expenses resulted primarily from lower variable compensation due to reduced sales volume, targeted global headcount reduction as well as the benefit of certain cost reduction initiatives implemented in the first quarter of 2009 that resulted in modifications to employee incentive compensation programs, partially offset by an increase in stock-based compensation resulting from our broader equity and incentive programs initiated in the first quarter of 2008. The strengthening U.S. dollar favorably impacted consolidated salary and related expenses by approximately $8.4 million in the second quarter of 2009.

Office and general expenses decreased $15.5 million, or 20.6%, in the second quarter of 2009 compared to the same period of 2008. This reduction in office and general expenses resulted primarily from lower travel and entertainment expenses, a reduction in consulting fees and reduced fees associated with outsourcing certain customer service functions. These reductions were partially offset by additional depreciation expense primarily associated with increased capitalized costs related to our newly designed website and our continued commitment to funding investment in our product, new technology and other assets in order to sustain long-term growth and increased amortization of intangibles related to the 2008 acquisitions. Included in office and general expenses in 2009 and 2008 are $2.2 million and $4.3 million, respectively, of professional fees and expenses related to the ongoing investigation of our historical stock option grant practices.

Marketing and promotion expenses decreased $24.0 million, or 34.8%, in the second quarter of 2009 compared to the same period of 2008. This reduction in marketing and promotion expenses resulted primarily from a more focused and efficient spending program in the second quarter of 2009 which included significant reductions in offline media and concentration on effective and productive online media investments. The Company also continues to refine its alliance partnership arrangements to expand the level of performance-based partnerships. Additionally, the Company continues to promote the Monster brand globally through creative marketing platforms such as the “Keep America Working” tour and the launch of similar initiatives in Europe. The Company believes that these marketing initiatives have resulted in a build up of relevant traffic to Monster.com and our affiliate sites.

In the second quarter of 2008, the Company recorded a provision for legal settlements (net of insurance reimbursements) of $40.1 million related to the proposed and anticipated settlement of the class action and related lawsuits. The Company recorded no provisions for legal settlements (net of insurance reimbursements) in the second quarter of 2009.

Restructuring and other special charges increased $2.4 million in the second quarter of 2009 compared to the second quarter of 2008, primarily resulting from increased costs in 2009 for accelerated amortization associated with certain capitalized software costs which were abandoned in the second quarter of 2009 and facilities consolidations. As a result of our restructuring and reinvestment programs, we believe we have made solid progress in improving our operating platform to facilitate future growth while remaining committed to further investment in critical areas such as sales, product innovation, brand support and infrastructure.

Our consolidated operating loss was $0.3 million in the second quarter of 2009, compared to operating income of $31.2 million in the second quarter of 2008.

Careers — North America

The operating results of our Careers — North America segment for the three months ended June 30, 2009 and 2008 are as follows:

						% of								% of				Increase				% Increase
(dollars in thousands)		2009				Revenue				2008				Revenue				(Decrease)				(Decrease)
Revenue		$	101,799				100.0	%		$	164,280				100.0	%		$	(62,481	)			(38.0	)%
Salaries and related			47,330				46.5	%			50,272				30.6	%			(2,942	)			(5.9	)%
Office and general			22,364				22.0	%			27,236				16.6	%			(4,872	)			(17.9	)%
Marketing and promotion			19,700				19.4	%			27,437				16.7	%			(7,737	)			(28.2	)%
Restructuring and other special charges			1,487				1.5	%			926				0.6	%			561				60.6	%
Operating expenses			90,881				89.3	%			105,871				64.4	%			(14,990	)			(14.2	)%
Operating income		$	10,918				10.7	%		$	58,409				35.6	%		$	(47,491	)			(81.3	)%