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		October 26, 2009
Common Stock			125,702,245

 

 

MONSTER WORLDWIDE, INC.

TABLE OF CONTENTS

		Page
		No.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements			3
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			21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			43
Item 4. Controls and Procedures			44
PART II—OTHER INFORMATION
Item 1. Legal Proceedings			44
Item 1A. Risk Factors			45
Item 6. Exhibits			45
Signatures			46
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								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Revenue		$	214,533			$	332,189			$	691,993			$	1,052,955
Salaries and related			112,833				136,506				348,702				412,833
Office and general			59,841				71,834				181,816				221,091
Marketing and promotion			45,757				57,684				164,401				238,514
(Reversal of) Provision for legal settlements, net			(6,850	)			—				(6,850	)			40,100
Restructuring and other special charges			—				3,592				16,105				13,251
Total operating expenses			211,581				269,616				704,174				925,789
Operating income (loss)			2,952				62,573				(12,181	)			127,166
Interest and other, net			(48	)			5,283				1,231				15,723
Income (loss) from continuing operations before income taxes and equity interests			2,904				67,856				(10,950	)			142,889
(Benefit from) provision for income taxes			(30,891	)			22,734				(35,463	)			50,030
Loss in equity interests, net			(1,044	)			(2,086	)			(3,473	)			(7,500	)
Income from continuing operations			32,751				43,036				21,040				85,359
(Loss) income from discontinued operations, net of tax			—				(258	)			—				10,840
Net income		$	32,751			$	42,778			$	21,040			$	96,199
Basic earnings per share:
Income from continuing operations		$	0.27			$	0.36			$	0.18			$	0.70
Income from discontinued operations, net of tax			—				—				—				0.09
Basic earnings per share		$	0.27			$	0.36			$	0.18			$	0.79
Diluted earnings per share:
Income from continuing operations		$	0.27			$	0.36			$	0.17			$	0.70
Income from discontinued operations, net of tax			—				—				—				0.09
Diluted earnings per share *		$	0.27			$	0.35			$	0.17			$	0.79
Weighted average shares outstanding:
Basic			119,473				120,057				119,206				121,213
Diluted			121,676				120,722				120,853				121,884

See accompanying notes.

MONSTER WORLDWIDE, INC.

		September 30,				December 31,
		2009				2008
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	187,477			$	222,260
Marketable securities, current			20,482				1,425
Accounts receivable, net of allowance for doubtful accounts of $15,169 and $14,064			243,033				376,720
Prepaid and other			87,058				82,416
Total current assets			538,050				682,821
Marketable securities, non-current			75,953				90,347
Goodwill			930,231				894,546
Property and equipment, net			150,963				161,282
Intangibles, net			45,893				52,335
Other assets			33,142				35,259
Total assets		$	1,774,232			$	1,916,590
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	37,452			$	41,524
Accrued expenses and other current liabilities			146,666				205,005
Deferred revenue			265,573				414,312
Current portion of long-term debt and borrowings under credit facilities			5,017				54,971
Income taxes payable			20,284				7,896
Total current liabilities			474,992				723,708
Long-term income taxes payable			82,963				119,951
Deferred income taxes			33,234				24,658
Long-term debt, less current portion			45,000				—
Other long-term liabilities			3,160				1,000
Total liabilities			639,349				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: 134,287 and 133,335 shares, respectively; outstanding: 119,565 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			1,388,609				1,367,373
Accumulated deficit			(324,993	)			(346,034	)
Accumulated other comprehensive income			71,133				25,801
Total stockholders’ equity			1,134,883				1,047,273
Total liabilities and stockholders’ equity		$	1,774,232			$	1,916,590

See accompanying notes.

MONSTER WORLDWIDE, INC.

		Nine Months Ended September 30,
		2009				2008
Cash flows provided by operating activities:
Net income		$	21,040			$	96,199
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations, net of tax			—				(10,840	)
Depreciation and amortization			50,684				40,503
(Reversal of) Provision for legal settlements, net			(6,850	)			40,100
Provision for doubtful accounts			8,566				11,174
Non-cash compensation			30,349				22,630
Deferred income taxes			5,739				(7,142	)
Non-cash restructuring write-offs, accelerated amortization and loss on disposal of assets			4,744				3,009
Loss in equity interests, net			3,473				7,500
Changes in assets and liabilities, net of purchase transactions:
Accounts receivable			127,523				131,891
Prepaid and other			856				21,620
Deferred revenue			(152,688	)			(112,567	)
Accounts payable, accrued liabilities and other			(81,468	)			(4,924	)
Receipts for legal settlement, net			—				5,700
Net cash used for operating activities of discontinued operations			—				(4,091	)
Total adjustments			(9,072	)			144,563
Net cash provided by operating activities			11,968				240,762
Cash flows (used for) provided by investing activities:
Capital expenditures			(38,664	)			(71,224	)
Cash funded to equity investees			(4,953	)			(5,000	)
Purchase of marketable securities			(7,476	)			(182,147	)
Sales and maturities of marketable securities			3,317				502,305
Payments for acquisitions and intangible assets, net of cash acquired			(300	)			(126,195	)
Dividends received from unconsolidated investee			763				1,011
Net cash (used for) provided by investing activities			(47,313	)			118,750
Cash flows (used for) provided by financing activities:
Proceeds from borrowings on credit facilities			199,203				247,000
Payments on borrowings on credit facilities			(256,196	)			(156	)
Proceeds from borrowings on term loan			50,000				—
Excess tax benefits from equity compensation plans			12				981
Repurchase of common stock			(4,304	)			(128,133	)
Proceeds from exercise of employee stock options			55				1,156
Net cash (used for) provided by financing activities			(11,230	)			120,848
Effects of exchange rates on cash			11,792				(4,980	)
Net (decrease) increase in cash and cash equivalents			(34,783	)			475,380
Cash and cash equivalents, beginning of period			222,260				129,744
Cash and cash equivalents, end of period		$	187,477			$	605,124
Supplemental disclosures of cash flow information:
Cash (refunded) paid for income taxes		$	(664	)		$	26,632
Cash paid for interest		$	4,722			$	1,303
Non-cash financing and investing activities:
Liabilities created in connection with business combinations		$	298			$	4,049

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, however 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.

Adoption of New Accounting Standards

Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (the “Codification”). 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 (“ASC”) will become the source of authoritative, nongovernmental GAAP, except for rules and interpretive releases of the 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 adoption of the Codification changed the Company’s references to GAAP accounting standards but did not impact the Company’s results of operations, financial position or liquidity.

Participating Securities Granted in Share-Based Transactions

Effective January 1, 2009, the Company adopted a new accounting standard included in ASC 260, Earnings Per Share (formerly FASB Staff Position (“FSP”) Emerging Issues Task Force (“EITF”) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities). The new guidance 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 the new accounting standard did not have a material effect on previously reported or current earnings per share.

Business Combinations and Noncontrolling Interests

Effective January 1, 2009, the Company adopted a new accounting standard included in ASC 805, Business Combinations (formerly SFAS No. 141(R), Business Combinations). The new standard applies to all transactions or other events in which an entity obtains control of one or more businesses. Additionally, the new standard 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 the new accounting standard did not have a material effect on the Company’s consolidated financial statements.

Effective January 1, 2009, the Company adopted a new accounting standard included in ASC 810, Consolidations (formerly SFAS 160, Noncontrolling Interests in Consolidated Financial Statements). The new accounting standard establishes 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, this guidance 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 this new accounting standard did not have a material effect on the Company’s consolidated financial statements.

Fair Value Measurement and Disclosure

Effective January 1, 2009, the Company adopted a new accounting standard included in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) (formerly FASB FSP No 157-2, Effective Date of FASB Statement No. 157), which delayed the effective date for disclosing all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value on a recurring basis (at least annually). This standard did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued new guidance for determining when a transaction is not orderly and for estimating fair value when there has been a significant decrease in the volume and level of activity for an asset or liability. The new guidance, which is now part of ASC 820 (formerly 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), requires disclosure of the inputs and valuation techniques used, as well as any changes in valuation techniques and inputs used during the period, to measure fair value in interim and annual periods. In addition, the presentation of the fair value hierarchy is required to be presented by major security type as described in ASC 320, Investments — Debt and Equity Securities. The provisions of the new standard were effective for interim periods ending after June 15, 2009. The adoption of the new standard on April 1, 2009 did not have a material on the Company’s consolidated financial statements.

In April 2009, the Company adopted a new accounting standard included in ASC 820, (formerly FSP 107-1 and Accounting Principles Board (“APB”) 28-1, Interim Disclosures about Fair Value of Financial Instruments). The new standard requires disclosures of the fair value of financial instruments for interim reporting periods of publicly traded companies in addition to the annual disclosure required at year-end. The provisions of the new standard were effective for the interim periods ending after June 15, 2009. The Company’s adoption of this new accounting standard did not have a material effect on the Company’s consolidated financial statements.

Derivative Instruments and Hedging Activities

Effective January 1, 2009, the Company adopted a new accounting standard included in ASC 815, Derivatives and Hedging (“ASC 815”) (SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133). The new accounting standard 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 the new accounting standard only required additional disclosure, the adoption did not impact the Company’s consolidated financial statements.

Other-Than-Temporary Impairments

In April 2009, the FASB issued new guidance for the accounting for other-than-temporary impairments. Under the new guidance, which is part of ASC 320, Investments — Debt and Equity Securities (“ASC 320”) (formerly FSP 115-2 and 124-2, Recognition and Presentation of Other-Than-Temporary Impairments), an other-than-temporary impairment is recognized when an entity has the intent to sell a debt security or when it is more likely than not that an entity will be required to sell the debt security before its anticipated recovery in value. The new guidance does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities and is effective for interim and annual reporting periods ending after June 15, 2009. The Company’s adoption of the new guidance did not have a material effect on the Company’s consolidated financial statements.

Subsequent Events

In May 2009, the FASB issued new guidance for subsequent events. The new guidance, which is part of ASC 855, Subsequent Events (formerly SFAS No. 165, Subsequent Events) 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 guidance 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. The new guidance is effective for fiscal years and interim periods ended after June 15, 2009 and will be applied prospectively. The Company’s adoption of the new guidance 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 October 30, 2009.

Accounting Standards Not Yet Effective

Accounting for the Transfers of Financial Assets

In June 2009, the FASB issued new guidance relating to the accounting for transfers of financial assets. The new guidance, which was issued as SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140, has not yet been adopted into Codification. 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. The new guidance is effective for fiscal years beginning after November 15, 2009. The Company will adopt the new guidance in 2010 and is evaluating the impact it will have to the Company’s consolidated financial statements.

Accounting for Variable Interest Entities

In June 2009, the FASB issued revised guidance on the accounting for variable interest entities. The revised guidance, which was issued as SFAS No. 167, Amending FASB Interpretation No. 46(R), has not yet been adopted into Codification. The revised guidance 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. The revised guidance 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 does not expect that the provisions of the new guidance will have a material effect on its consolidated financial statements.

Fair Value Measurement of Liabilities

In August 2009, the FASB issued new guidance relating to the accounting for the fair value measurement of liabilities. The new guidance, which is now part of ASC 820, provides clarification that in certain circumstances in which a quoted price in an active market for the identical liability is not available, a company is required to measure fair value using one or more of the following valuation techniques: the quoted price of the identical liability when traded as an asset, the quoted prices for similar liabilities or similar liabilities when traded as assets, or another valuation technique that is consistent with the principles of fair value measurements. The new guidance clarifies that a company is not required to include an adjustment for restrictions that prevent the transfer of the liability and if an adjustment is applied to the quoted price used in a valuation technique, the result is a Level 2 or 3 fair value measurement. The new guidance is effective for interim and annual periods beginning after August 27, 2009. The Company does not expect that the provisions of the new guidance will have a material effect on its 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								Nine Months Ended
		September 30,								September 30,
(thousands of shares)		2009				2008				2009				2008
Basic weighted average shares outstanding			119,473				120,057				119,206				121,213
Effect of common stock equivalents — stock options and non-vested stock under employee compensation plans			2,203				665				1,647				671
Diluted weighted average shares outstanding			121,676				120,722				120,853				121,884
Weighted average anti-dilutive common stock equivalents			7,614				8,864				8,701				7,982

3. STOCK-BASED COMPENSATION

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 service-based 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 September 30,								Nine Months Ended September 30,
		2009				2008				2009				2008
Non-vested stock, included in salaries and related		$	9,924			$	7,437			$	29,889			$	20,994
Non-vested stock, included in restructuring and other special charges			—				—				—				1,162
Stock options, included in salaries and related			157				165				460				474
Total		$	10,081			$	7,602			$	30,349			$	22,630

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 nine months of 2009, the Company granted RSA of 2,910,905 shares and RSU of 1,099,259 shares to approximately 3,000 employees, executive officers and directors that vest in various increments on the anniversaries of the individual grant dates through July 28, 2013, subject to the recipient’s continued employment or service through each applicable vesting date.

The Company’s non-vested stock activity for the nine months ended September 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			4,010				6.89
Forfeited			(650	)			21.02
Vested			(1,070	)			31.44
Non-vested at September 30, 2009			7,902			$	15.64

As of September 30, 2009, the unrecognized compensation expense related to non-vested stock was approximately $94,072 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 nine months ended September 30, 2009 is as follows:

										Weighted
						Weighted				Average				Aggregate
						Average Exercise				Contractual				Intrinsic
(thousands of shares)		Shares				Price				Term (in years)				Value
Outstanding at January 1, 2009			6,290			$	30.58
Exercised			(6	)			9.47
Forfeited/expired/cancelled			(1,391	)			30.77
Outstanding at September 30, 2009			4,893			$	30.96				2.32			$	4,942
Options exercisable at September 30, 2009			4,737			$	30.95				2.19			$	4,942

Aggregate intrinsic value is calculated as the difference between the closing market price of the Company’s common stock as of September 30, 2009 and the exercise price of the underlying options. During nine months ended September 30, 2009 and 2008, the aggregate intrinsic value of options exercised was $26 and $486, respectively. As of September 30, 2009, the unrecognized compensation expense for stock options was $1,108 and is expected to be recognized over a period of 2.3 years.

4. BUSINESS COMBINATIONS

The following table summarizes the Company’s business combinations completed from January 1, 2008 through September 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
Cinchouse LLC		July 28, 2009		Internet Advertising & Fees
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 July 28, 2009, the Company’s Internet Advertising & Fees segment purchased Cinchouse LLC, a business that provides a social networking site for women in the military and military spouses. Consideration for the acquisition was $600, of which $300 was paid in cash in the third quarter of 2009 with the remaining consideration to be paid in future periods.

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 $239,126 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, $23,814 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 $55,482 of goodwill, $3,902 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 $56,259 of goodwill, $2,563 of deferred tax assets, $1,251 of receivables, $2,500 of intangible assets, $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 ASC 820 (formerly SFAS 157). ASC 820 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 AG and affiliates (collectively, “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 September 30, 2009:

		Level 1				Level 2				Level 3				Total
Assets:
Money market funds		$	14,094			$	—			$	—			$	14,094
Bank time deposits			—				46,849				—				46,849
Commercial paper			—				93,157				—				93,157
Government bonds foreign			—				8,884				—				8,884
Tax exempt auction rate bonds (Note 6)			—				—				89,565				89,565
UBS put option (Note 6)			—				—				142				142
Total Assets		$	14,094			$	148,890			$	89,707			$	252,691
Liabilities:
Lease exit liability		$	—			$	—			$	25,085			$	25,085
Total Liabilities		$	—			$	—			$	25,085			$	25,085

The lease exit liabilities relate to vacated 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			306
Unrealized loss included in interest and other, net			(188	)
Balance, September 30, 2009		$	89,565

		UBS Put Option
Balance, December 31, 2008		$	—
Unrealized gain included in interest and other, net			142
Balance, September 30, 2009		$	142

		Lease Exit Liability
Balance, December 31, 2008 *		$	—
Transfers into Level 3			25,085
Balance, September 30, 2009		$	25,085

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 its credit facility (see Note 11), which approximates fair value due to market interest rates.

6. INVESTMENTS

Marketable Securities

As of September 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 auction rate securities 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 $5,500 auction rate securities redeemed at par value on October 9, 2009 by the issuer and the $8,300 par value auction rate securities marketed and sold by UBS as of September 30, 2009, see below) in the consolidated balance sheets as of December 31, 2008 and September 30, 2009. Typically, when auctions are successful, the fair value of auction rate securities approximates 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 September 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 comparable securities or a benchmark index 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 $89,565 as of September 30, 2009. The write-down of these securities resulted in an unrealized loss of $188, reported in interest and other, net in the consolidated statement of operations for the nine months ended September 30, 2009 (relating to the auction rate securities marketed and sold by UBS, see below), and an unrealized gain of $306 for the nine months ended September 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 securities 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, as described 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 75% of the market value, as determined by UBS, of the UBS-brokered auction rate securities 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 $188 as a charge to interest and other in the consolidated statement of operations for the nine months ended September 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 consolidated balance sheet as of September 30, 2009.

The ARS Rights represent a firm agreement in accordance with ASC 815 (formerly 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 1.86% to 2.05%, 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 September 30, 2009 at $142, which was recorded as a non-current asset in the consolidated balance sheet as of September 30, 2009 with the corresponding credit to interest and other in the consolidated statement of operations for the nine months ended September 30, 2009. The put option does not meet the definition of a derivative instrument under ASC 815 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 ASC 825, Financial Instruments (formerly SFAS 159, The Fair Value Option for Financial Assets and Liabilities), 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 September 30, 2009 are as follows:

						Gross unrealized				Gross unrealized				Estimated fair
		Cost				losses				gains				value
Current
Government bonds foreign		$	6,870			$	—			$	—			$	6,870
Tax-exempt auction rate bonds			13,800				188			$	—			$	13,612
Total		$	20,670			$	188			$	—			$	20,482
Non-current
Tax-exempt auction rate bonds		$	77,250			$	1,297			$	—			$	75,953
Total		$	77,250			$	1,297			$	—			$	75,953

The Company reviews impairments associated with the above to determine the classification of the impairment as “temporary” or “other-than-temporary” in accordance with ASC 320 (formerly 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 September 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 $77,250 and gross unrealized losses of $1,297.

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 $171 as of September 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 nine months ended September 30, 2009, the Company funded additional working capital requirements and incurred additional transaction costs of $4,953. The carrying value of the investment was $355 as of September 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								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
ChinaHR		$	—			$	(2,323	)		$	—			$	(8,324	)
Finland			41				237				142				824
Australia			(1,085	)			—				(3,615	)			—
Loss in equity interests, net		$	(1,044	)		$	(2,086	)		$	(3,473	)		$	(7,500	)

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 the 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, when all the initiatives relating to the 2007 restructuring program were complete, the Company had notified or terminated approximately 700 associates and approximately 140 associates had 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. Since the inception of the 2007 restructuring program through the completion of the program in the second quarter of 2009, the Company has incurred $49,109 of restructuring expenses. The Company will not incur any new charges in the future relating to this program.

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

		December 31, 2008				Expense				Cash Payments				Non-Cash Utilization				September 30, 2009
Workforce reduction		$	2,749			$	7,731			$	(6,800	)		$	—			$	3,680
Fixed asset write-offs and accelerated amortization			—				4,721				—				(4,721	)			—
Consolidation of office facilities			869				2,876				(761	)			—				2,984
Other costs and professional fees			101				777				(340	)			—				538
Total		$	3,719			$	16,105			$	(7,901	)		$	(4,721	)		$	7,202

8. PROPERTY AND EQUIPMENT, NET

		September 30, 2009				December 31, 2008
Capitalized software costs		$	184,359			$	169,497
Furniture and equipment			31,463				30,500
Leasehold improvements			32,557				30,265
Computer and communications equipment			178,074				165,198
			426,453				395,460
Less: accumulated depreciation			275,490				234,178
Property and equipment, net		$	150,963			$	161,282

Depreciation expense was $43,479 and $36,253 for the nine months ended September 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 inter-company accounts receivable.

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

		September 30, 2009
		Notional Balance				Maturity Date				Accrued Expenses
Designated as Hedges under ASC 815
None			—				—				—
Not Designated as Hedges under ASC 815
Foreign currency exchange forwards		$29,778 consisting of 7 different currency pairs				October — December 2009				$	3
Total Derivative Instruments										$	3
		December 31, 2008
		Notional Balance				Maturity Date				Accrued Expenses
Designated as Hedges under ASC 815
None			—				—				—
Not Designated as Hedges under ASC 815
Foreign currency exchange forwards		$33,200 consisting of 3 different currency pairs				January 2009				$	(100	)
Total Derivative Instruments										$	(100	)

During the nine months ended September 30, 2009, net losses of $640, 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 product 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 nine months of 2008 included the write-down of $13,201 of long-lived assets, an income tax benefit of $29,494 and a net loss of $5,453 from its operations. The income tax benefit included $25,639 of current tax benefits for current period 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 nine months ended September 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								Nine Months Ended
		September 30,								September 30,
(dollars in thousands)		2009				2008				2009				2008
Revenue		$	—			$	190			$	—			$	6,348
Loss before income taxes			—				(397	)			—				(18,654	)
Income tax benefit			—				139				—				29,494
Income (loss) from discontinued operations, net of tax		$	—			$	(258	)		$	—			$	10,840

11. FINANCING AGREEMENTS

In December 2007, the Company entered into a senior unsecured revolving credit facility that provided for maximum borrowings of $250,000. On August 31, 2009 (the “Amendment Closing Date”), with the objective of availing itself of the benefits of an improved credit market in an ongoing unstable macroeconomic environment, the Company amended certain terms and increased its borrowing capability under its existing credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement maintains the Company’s existing $250,000 revolving credit facility and provides for a new $50,000 term loan facility, providing for a total of $300,000 in credit available to the Company. The revolving credit facility and the term loan facility each mature on December 21, 2012. The term loan is subject to annual amortization of principal with $5,000 payable on each anniversary of the Amendment Closing Date and the remaining $35,000 due at maturity.

The Amended Credit Agreement provides for increases in the interest rates applicable to borrowings and increases in certain fees. Borrowings under the Amended Credit Agreement will bear interest at a rate equal to (i) LIBOR plus a margin ranging from 300 basis points to 400 basis points depending on the Company’s ratio of consolidated funded debt to trailing four-quarter consolidated earnings before interest, taxes, depreciation and amortization (the “Consolidated Leverage Ratio”) as defined in Amended Credit Agreement or (ii) for Dollar-denominated loans only and upon the Company’s election, the sum of (A) the highest of (1) the credit facility’s administrative agent’s prime rate, (2) the sum of 0.50% plus the overnight federal funds rate on such day or (3) subject to certain exceptions, the sum of 1.00% plus the 1-month LIBOR rate, plus (B) a margin ranging from 200 basis points to 300 basis points depending on the Company’s Consolidated Leverage Ratio. In addition, the Company will be required to pay the following fees: (i) a fee on all outstanding amounts of letters of credit at a rate per annum ranging from 300 basis points to 400 basis points (which rate is based on the Consolidated Leverage Ratio); and (ii) a commitment fee on the unused portion of the revolving credit facility at a rate per annum ranging from 50 basis points to 75 basis points (which rate is based on the Consolidated Leverage Ratio). The Company is no longer required to pay a utilization fee on outstanding loans and letters of credit under any circumstances.

The Amended Credit Agreement also increases the maximum permitted Consolidated Leverage Ratio to: (a) 3.50:1.00 for the period beginning on August 31, 2009 and ending on September 29, 2010; (b) 3.00:1.00 for the period beginning on September 30, 2010 and ending on September 29, 2011; and (c) 2.75:1.00 beginning on September 30, 2011 and any time thereafter. 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 Amended Credit Agreement. As of September 30, 2009, the Company was in full compliance with its covenants.

Also on the Amendment Closing Date, the Company entered into the U.S. Pledge Agreement which along with subsequent separate pledge agreements shall cause the obligations under the Amended Credit Agreement to be secured by a pledge of: (a) all of the equity interests of the Company’s domestic subsidiaries (other than certain specified inactive subsidiaries) and (b) 65% of the equity interests of each first-tier material foreign subsidiary of the Company.

At September 30, 2009, the utilized portion of this credit facility was $50,000 in borrowings on the term loan facility, no borrowings on the revolving credit facility and $1,772 for standby letters of credit. As of September 30, 2009, $248,228 was unused on the Company’s revolving credit facility. At September 30, 2009, the one month US Dollar LIBOR rate, the credit facility’s administrative agent’s prime rate, and the overnight federal funds rate were 0.25%, 3.25% and 0.07%, respectively. As of September 30, 2009, the Company used the one month US Dollar LIBOR rate for the interest rate on these term loan borrowings with an interest rate of 3.26%.

12. COMPREHENSIVE INCOME (LOSS)

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

		Three Months ended								Nine Months ended
		September 30,								September 30,
		2009				2008				2009				2008
Net income		$	32,751			$	42,778			$	21,040			$	96,199
Foreign currency translation adjustment			42,592				(56,153	)			45,026				(29,906	)
Net unrealized gain (loss) on available-for-sale securities			181				349				306				(1,021	)
Comprehensive income (loss)		$	75,524			$	(13,026	)		$	66,372			$	65,272

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 (inclusive of estimated interest and penalties thereon) at September 30, 2009 and December 31, 2008 is recorded as long-term taxes payable of $82,963 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.

Due to the expiration of the statute of limitations in the third quarter of 2009, the Company reversed $30,599 of accrued tax attributable to uncertain tax positions of which $26,571 impacts the effective tax rate. The Company also reversed accrued interest and penalties related to uncertain tax positions of $8,979, which on a net tax basis impacts the effective rate by $5,687. The total benefit reflected in the third quarter income tax provision due to the reversal of tax and interest is $32,258.

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 $20,000 in the next twelve months due to the expiration of the 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								Nine Months Ended
		September 30,								September 30,
Revenue		2009				2008				2009				2008
Careers — North America		$	95,204			$	155,165			$	316,187			$	502,983
Careers — International			84,737				142,441				277,000				452,386
Internet Advertising & Fees			34,592				34,583				98,806				97,586
Revenue		$	214,533			$	332,189			$	691,993			$	1,052,955

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Operating Income (Loss)		2009				2008				2009				2008
Careers — North America		$	6,057			$	43,120			$	17,804			$	141,230
Careers — International			(2,181	)			30,231				(4,871	)			71,790
Internet Advertising & Fees			5,091				4,726				13,574				7,951
Corporate expenses			(6,015	)			(15,504	)			(38,688	)			(93,805	)
Operating income (loss)		$	2,952			$	62,573			$	(12,181	)		$	127,166

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Depreciation and Amortization		2009				2008				2009				2008
Careers — North America		$	7,997			$	6,372			$	22,959			$	17,322
Careers — International			7,391				6,560				22,082				18,281
Internet Advertising & Fees			1,929				1,661				5,338				4,547
Corporate expenses			102				117				305				353
Depreciation and amortization		$	17,419			$	14,710			$	50,684			$	40,503

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Restructuring and Other Special Charges		2009				2008				2009				2008
Careers — North America		$	—			$	651			$	3,758			$	4,607
Careers — International			—				2,236				10,368				6,752
Internet Advertising & Fees			—				251				616				1,370
Corporate expenses			—				454				1,363				522
Restructuring and other special charges		$	—			$	3,592			$	16,105			$	13,251

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Revenue by Geographic Region		2009				2008				2009				2008
United States		$	125,322			$	183,208			$	401,476			$	579,469
Germany			16,423				33,669				56,322				108,664
Other foreign			72,788				115,312				234,195				364,822
Revenue		$	214,533			$	332,189			$	691,993			$	1,052,955

The following table reconciles each reportable segment’s assets to total assets reported on the Company’s consolidated balance sheets:

Total Assets by Segment		September 30, 2009				December 31, 2008
Careers — North America		$	574,698			$	657,730
Careers — International			717,150				843,007
Internet Advertising & Fees			186,697				188,507
Corporate			152,577				83,217
Shared assets (a)			143,110				144,129
Total assets		$	1,774,232			$	1,916,590

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

Long-lived Assets by Geographic Region (a)		September 30, 2009				December 31, 2008
United States		$	111,089			$	117,738
International			39,874				43,544
Total long-lived assets		$	150,963			$	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.

Remaining Litigation Arising from the Company’s Historical Stock Option Granting Practices

The Company is currently party to one civil action (captioned as Taylor v. McKelvey, et al., 06 CV 8322 (S.D.N.Y)(AKH) (the “ERISA Class Action”)) pending against it (as well as certain former officers and directors of the Company) in connection with the Company’s historical stock option granting practices. The ERISA Class Action was filed in the United States District Court for the Southern District of New York in October 2006 as a putative class action litigation, purportedly brought on behalf of all participants in the Company’s 401(k) Plan (the “Plan”). The complaint, as amended in February 2007 and February 2008, alleges 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 Company’s historical stock option grant practices. On September 14, 2009, the plaintiffs and the Company entered into a Memorandum of Understanding (the “Memorandum of Understanding”) that memorializes the terms pursuant to which the parties intend, subject to Court approval and certification of the proposed class described in the second amended complaint, to settle the ERISA Class Action. The Memorandum of Understanding provides for a payment of $4,250 in full settlement of the claims asserted in the ERISA Class Action, a substantial majority of which will be paid by insurance and contribution from another defendant. The parties to the ERISA Class Action expect to enter into a formal settlement agreement in the near future and to thereafter seek Court approval.

Upon the conclusion of the settlement of the ERISA Class Action, all of the actions seeking recoveries from the Company as an outgrowth of the Company’s historical stock option grant practices will have been settled. As a result, in the quarterly period ended September 30, 2009, the Company has reversed a previously recorded accrual of $6,850 relating to these matters.

Litigation Relating to the Company’s Discontinued Tickle Business

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 September 30, 2009, and the related consolidated statements of operations for the three and nine month periods ended September 30, 2009 and 2008 and cash flows for the nine month periods ended September 30, 2009 and 2008 included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended September 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
October 30, 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 built on Monster’s brand and created 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. Job seekers can search our job postings and post their resumes for free on each of our career websites. Employers pay to post jobs, search our resume database and access other career related services.

Our strategy has been to grow our business both organically and through strategic acquisitions and alliances in which the perceived growth prospects fit our long-term strategic growth 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. The Company completed all of the initiatives relating to the 2007 restructuring program in the second quarter of 2009 and no new charges will be incurred in the future relating to this program. Since the inception of the 2007 restructuring program, we have incurred $49.1 million of restructuring expenses.

Business Combinations

For the period from January 1, 2008 through September 30, 2009, we completed four 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
Cinchouse LLC		July 28, 2009		Internet Advertising & Fees
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. Tickle’s discontinued operations for the first nine months of 2008 included the write-down of $13.2 million of long-lived assets, an income tax benefit of $29.5 million and a net loss of $5.5 million from its operations. The income tax benefit included $25.6 million of current tax benefits for current period operating losses and tax losses incurred upon Tickle’s discontinuance and $3.9 million of deferred tax benefits for the reversal of deferred tax liabilities on long-term assets.

For the three and nine months ended September 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								Nine Months Ended
		September 30,								September 30,
(dollars in thousands)		2009				2008				2009				2008
Revenue		$	—			$	190			$	—			$	6,348
Loss before income taxes			—				(397	)			—				(18,654	)
Income tax benefit			—				139				—				29,494
Income (loss) from discontinued operations, net of tax		$	—			$	(258	)		$	—			$	10,840

Results of Operations

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Revenue			100.0	%			100.0	%			100.0	%			100.0	%
Salaries and related			52.6	%			41.1	%			50.4	%			39.2	%
Office and general			27.9	%			21.6	%			26.3	%			21.0	%
Marketing and promotion			21.3	%			17.4	%			23.8	%			22.7	%
(Reversal of) provision for legal settlements, net			(3.2	)%			0.0	%			(1.0	)%			3.8	%
Restructuring and other special charges			0.0	%			1.1	%			2.3	%			1.3	%
Total operating expenses			98.6	%			81.2	%			101.8	%			87.9	%
Operating income (loss)			1.4	%			18.8	%			(1.8	)%			12.1	%
Interest and other, net			(0.0	)%			1.6	%			0.2	%			1.5	%
Income (loss) from continuing operations before income taxes and loss in equity interests			1.4	%			20.4	%			(1.6	)%			13.6	%
(Benefit from) provision for income taxes			(14.4	)%			6.8	%			(5.1	)%			4.8	%
Loss in equity interests, net			(0.5	)%			(0.6	)%			(0.5	)%			(0.7	)%
Income from continuing operations			15.3	%			13.0	%			3.0	%			8.1	%
Income from discontinued operations, net of tax			0.0	%			(0.1	)%			0.0	%			1.0	%
Net income			15.3	%			12.9	%			3.0	%			9.1	%

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

Consolidated Revenue, Operating Expenses and Operating Income

Consolidated revenue, operating expenses and operating income for the three months ended September 30, 2009 and 2008 are as follows:

						% of								% of				Increase				% Increase
(dollars in thousands)		2009				Revenue				2008				Revenue				(Decrease)				(Decrease)
Revenue		$	214,533				100.0	%		$	332,189				100.0	%		$	(117,656	)			(35.4	)%
Salaries and related			112,833				52.6	%			136,506				41.1	%			(23,673	)			(17.3	)%
Office and general			59,841				27.9	%			71,834				21.6	%			(11,993	)			(16.7	)%
Marketing and promotion			45,757				21.3	%			57,684				17.4	%			(11,927	)			(20.7	)%
(Reversal of) provision for legal settlements, net			(6,850	)			(3.2	)%			—				0.0	%			(6,850	)			(100.0	)%
Restructuring and other special charges			—				0.0	%			3,592				1.1	%			(3,592	)			(100.0	)%
Operating expenses			211,581				98.6	%			269,616				81.2	%			(58,035	)			(21.5	)%
Operating income		$	2,952				1.4	%		$	62,573				18.8	%		$	(59,621	)			(95.3	)%

Our consolidated revenue decreased $117.7 million, or 35.4%, in the third quarter of 2009 compared to the same period of 2008, which includes $7.4 million of negative foreign translation impact relating to the effect of the strengthening U.S. dollar in 2009 as compared to 2008. Careers — International experienced a 40.5% decrease in revenue and Careers — North America experienced a 38.6% 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 remained relatively flat.

Our consolidated operating expenses declined $58 million, or 21.5%, in the third 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 lower revenue as well as the 2009 results including a $6.9 million reversal of a previously recorded provision for legal settlements. The strengthening U.S. dollar favorably impacted our consolidated operating expenses by approximately $6.9 million in the third quarter of 2009, compared to the third quarter of 2008.

Salary and related expenses decreased $23.7 million, or 17.3%, in the third 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 reductions, a benefit in 2009 resulting from a change in actuarial assumptions related to a statutory pension plan 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. These reductions in salary and related expenses were partially offset by increased severance costs associated with our targeted global headcount reductions and an increase in stock-based compensation resulting from our broader equity and incentive programs. The strengthening U.S. dollar favorably impacted consolidated salary and related expenses by approximately $3.9 million in the third quarter of 2009, compared to the third quarter of 2008.

Office and general expenses decreased $12.0 million, or 16.7%, in the third quarter of 2009 compared to the same period of 2008. This reduction in office and general expenses resulted primarily from a reduction in consulting fees and lower travel and entertainment expenses. These reductions were partially offset by increased costs associated with exiting certain facilities in the third quarter of 2009 and additional depreciation expense primarily associated with increased capitalized costs related to our newly designed website and our continued commitment to funding investments in our product, new technology and other assets in order to sustain long-term growth. The strengthening U.S. dollar favorably impacted consolidated office and general expenses by approximately $1.9 million in the third quarter of 2009, compared to the third quarter of 2008. Included in office and general expenses in each of the three months ended September 30, 2009 and 2008, respectively, are a net benefit of $0.5 million and a charge of $3.9 million of professional fees and expenses related to the ongoing investigation of our historical stock option grant practices.

Marketing and promotion expenses decreased $11.9 million, or 20.7%, in the third 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 third quarter of 2009 which included significant reductions in all categories of marketing and promotion and concentration on effective and productive investments. The Company also continues to refine its alliance partnership arrangements to expand the level of performance-based partnerships. Partially offsetting these decreases are additional costs incurred in 2009 relating to the Company’s continuation of the “Keep America Working” tour and the launch of similar initiatives in Europe as well as increased investment in ChinaHR, which the Company acquired 100% ownership of in the fourth quarter of 2008. The Company believes that these marketing initiatives have resulted in a build up of relevant traffic to Monster.com and our affiliate sites. The strengthening U.S. dollar favorably impacted consolidated marketing and promotion expenses by approximately $1.1 million in the third quarter of 2009, compared to the third quarter of 2008.

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 relating to the Company’s historical stock option grant practices. Upon the conclusion of the settlement of the ERISA class action described in Part II, Item 1, “Legal Proceedings,” of this Quarterly Report, all of the actions seeking recoveries from the Company as an outgrowth of the Company’s historical stock option grant practices will have been settled. As a result, in the quarterly period ended September 30, 2009, the Company has reversed a previously recorded accrual of $6.9 million relating to these matters. As a consequence of the Company’s settlement of the ERISA class action and the settlement of the Company’s claims against a former member of senior management, we do not expect to continue to incur significant professional fees or legal fees paid on behalf of former employees and former members of senior management related to or in connection with matters relating to our historical stock option grant practices.

The 2007 restructuring program was complete in the second quarter of 2009 and, accordingly, there are no restructuring charges recorded in the third quarter of 2009.

Our consolidated operating income was $3.0 million in the third quarter of 2009, compared to operating income of $62.6 million in the third quarter of 2008.

Careers — North America

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

						% of								% of				Increase				% Increase
(dollars in thousands)		2009				Revenue				2008				Revenue				(Decrease)				(Decrease)
Revenue		$	95,204				100.0	%		$	155,165				100.0	%		$	(59,961	)			(38.6	)%
Salaries and related			47,470				49.9	%			53,714				34.6	%			(6,244	)			(11.6	)%
Office and general			23,599				24.8	%			30,469				19.6	%			(6,870	)			(22.5	)%
Marketing and promotion			18,078				19.0	%			27,211				17.5	%			(9,133	)			(33.6	)%
Restructuring and other special charges			—				0.0	%			651				0.4	%			(651	)			(100.0	)%
Operating expenses			89,147				93.6	%			112,045				72.2	%			(22,898	)			(20.4	)%
Operating income		$	6,057				6.4	%		$	43,120				27.8	%		$	(37,063	)			(86.0	)%