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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008

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

FOR THE TRANSITION PERIOD FROM                      to                     

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 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 (Do not check if a smaller reporting company)		Smaller reporting company o

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 31, 2008
Common Stock			118,458,460
Class B Common Stock			4,762,000

 

 

MONSTER WORLDWIDE, INC.
INDEX

		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			25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			44
Item 4. Controls and Procedures			45
PART II—OTHER INFORMATION
Item 1. Legal Proceedings			46
Item 1A. Risk Factors			50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			51
Item 6. Exhibits			51
Signatures			52
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
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,
		2008				2007				2008				2007
Revenue		$	332,189			$	330,142			$	1,052,955			$	975,957
Salaries and related			136,506				126,940				412,833				393,259
Office and general			71,834				69,466				221,091				200,089
Marketing and promotion			57,684				71,584				238,514				217,661
Provision for legal settlements, net			—				—				40,100				—
Restructuring and other special charges			3,592				11,155				13,251				11,155
Total operating expenses			269,616				279,145				925,789				822,164
Operating income			62,573				50,997				127,166				153,793
Interest and other, net			5,283				6,507				15,723				18,823
Income from continuing operations before income taxes and equity interest			67,856				57,504				142,889				172,616
Income taxes			22,734				20,474				50,030				61,151
Loss in equity interests, net			(2,086	)			(3,074	)			(7,500	)			(7,460	)
Income from continuing operations			43,036				33,956				85,359				104,005
(Loss) income from discontinued operations, net of tax			(258	)			(655	)			10,840				(2,606	)
Net income		$	42,778			$	33,301			$	96,199			$	101,399
Basic earnings (loss) per share:
Income from continuing operations		$	0.36			$	0.26			$	0.70			$	0.80
(Loss) income from discontinued operations, net of tax			—				(0.01	)			0.09				(0.02	)
Basic earnings per share*		$	0.36			$	0.26			$	0.79			$	0.78
Diluted earnings (loss) per share:
Income from continuing operations		$	0.36			$	0.26			$	0.70			$	0.79
(Loss) income from discontinued operations, net of tax			—				(0.01	)			0.09				(0.02	)
Diluted earnings per share*		$	0.35			$	0.25			$	0.79			$	0.77
Weighted average shares outstanding:
Basic			120,057				129,499				121,213				129,893
Diluted			120,722				130,757				121,884				132,044

See accompanying notes.

MONSTER WORLDWIDE, INC.

		September 30,				December 31,
		2008				2007
ASSETS
Current assets:
Cash and cash equivalents		$	605,124			$	129,744
Available-for-sale securities			33,823				448,703
Accounts receivable, net of allowance for doubtful accounts of $15,754 and $15,613			358,214				499,854
Prepaid and other			111,754				106,664
Total current assets			1,108,915				1,184,965
Available-for-sale securities, non-current			93,728				—
Goodwill			707,164				615,334
Property and equipment, net			152,352				123,397
Intangibles, net			36,694				35,351
Investment in unconsolidated affiliates			42,360				50,871
Other assets			61,761				53,162
Non-current assets of discontinued operations			—				14,730
Total assets		$	2,202,974			$	2,077,810
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	44,088			$	57,334
Accrued expenses and other current liabilities			271,092				233,611
Borrowings under credit facility			247,000				—
Deferred revenue			411,764				524,331
Income taxes payable			13,392				13,384
Total current liabilities			987,336				828,660
Non-current income taxes payable			115,318				111,108
Deferred income taxes			22,308				14,878
Other long-term liabilities			1,391				2,387
Non-current liabilities of discontinued operations			—				4,276
Total liabilities			1,126,353				961,309
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: 128,540 and 128,280 shares, respectively; outstanding: 113,819 and 119,013 shares, respectively			129				128
Class B common stock, $.001 par value, authorized 39,000 shares; issued and outstanding: 4,762 shares			5				5
Additional paid-in capital			1,363,655				1,468,808
Accumulated other comprehensive income, net			87,460				118,387
Accumulated deficit			(374,628	)			(470,827	)
Total stockholders’ equity			1,076,621				1,116,501
Total liabilities and stockholders’ equity		$	2,202,974			$	2,077,810

See accompanying notes.

MONSTER WORLDWIDE, INC.

		Nine Months Ended September 30,
		2008				2007
Cash flows provided by operating activities:
Net income		$	96,199			$	101,399
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations, net of tax			(10,840	)			2,606
Depreciation and amortization			40,503				31,862
Provision for legal settlements, net			40,100				—
Receipts and (payments) for legal settlements, net			5,700				—
Provision for doubtful accounts			11,174				8,453
Non-cash compensation			22,630				24,453
Deferred income taxes			(7,142	)			(2,697	)
Loss in equity interests and other			10,509				6,886
Changes in assets and liabilities, net of purchase transactions:
Accounts receivable			131,891				34,065
Prepaid and other			21,620				(12,211	)
Deferred revenue			(112,567	)			(9,464	)
Accounts payable, accrued liabilities and other			(4,924	)			24,749
Net cash used for operating activities of discontinued operations			(4,091	)			(5,106	)
Total adjustments			144,563				103,596
Net cash provided by operating activities			240,762				204,995
Cash flows provided by (used for) investing activities:
Capital expenditures			(71,224	)			(47,560	)
Payments for acquisitions and intangible assets, net of cash acquired			(126,195	)			(1,939	)
Sales and maturities of marketable securities			502,305				1,035,983
Purchase of marketable securities			(182,147	)			(1,009,836	)
Cash funded to equity investee			(5,000	)			(10,000	)
Dividends received from unconsolidated investee			1,011				—
Net cash used for investing activities of discontinued operations			—				(255	)
Net cash provided by (used for) investing activities			118,750				(33,607	)
Cash flows provided by (used for) financing activities:
Proceeds from borrowings on credit facility short-term			247,000				—
Repurchase of common stock			(128,133	)			(164,734	)
Payments on debt obligations			(156	)			(58	)
Proceeds from exercise of employee stock options			1,156				54,052
Excess tax benefits from equity compensation plans			981				13,954
Payments on acquisition debt			—				(21,862	)
Net cash provided by (used for) financing activities			120,848				(118,648	)
Effects of exchange rates on cash			(4,980	)			5,795
Net increase in cash and cash equivalents			475,380				58,535
Cash and cash equivalents, beginning of period			129,744				58,680
Cash and cash equivalents, end of period		$	605,124			$	117,215
Supplemental disclosures of cash flow information:
Cash paid for income taxes		$	26,632			$	61,818
Cash paid for interest		$	1,303			$	1,489
Non-cash financing and investing activities:
Liabilities created in connection with business combinations		$	4,049			$	325

See accompanying notes.

MONSTER WORLDWIDE, INC.

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

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 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 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, 2007. The Company adheres to the same accounting policies in preparation of interim financial statements. As required under generally accepted accounting principles, 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.

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”) for financial assets and liabilities and any other assets and liabilities carried at fair value. This pronouncement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. On November 14, 2007, the Financial Accounting Standards Board (the “FASB”) agreed to a one-year deferral for the implementation of SFAS 157 for other non-financial assets and liabilities. The Company’s adoption of SFAS 157 did not have a material effect on the Company’s consolidated financial statements for financial assets and liabilities and any other assets and liabilities carried at fair value.

2. EARNINGS PER SHARE AND STOCK-BASED COMPENSATION

Earnings Per Share

Basic earnings per share does not include the effects of potentially dilutive stock options and non-vested stock and is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share reflects, in periods in which they have a dilutive effect, the effect of shares of non-vested stock and common stock issuable upon exercise of stock options for periods in which the options’ exercise price is lower than the Company’s average share price for the period.

A reconciliation of shares used in calculating basic and diluted earnings per share and certain common stock equivalents for options and shares of non-vested stock excluded from the computation of earnings per share due to their anti-dilutive effect is as follows:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(thousands of shares)		2008				2007				2008				2007
Basic weighted average shares outstanding			120,057				129,499				121,213				129,893
Effect of common stock equivalents — stock options and non- vested stock under employee compensation plans			665				1,258				671				2,151
Diluted weighted average shares outstanding			120,722				130,757				121,884				132,044
Weighted average anti-dilutive common stock equivalents			8,864				1,433				7,982				1,109

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 forfeitures. The Company uses the Black-Scholes option-pricing model to determine the fair-value of stock option awards. The Company measures non-vested stock awards using the fair-market value of the Company’s common stock on the date of the grant. The Company awards stock options and non-vested stock to employees, directors and executive officers. In accordance with SFAS 123R, the Company has presented 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. As of September 30, 2008, the unrecognized compensation expense for stock options was $1,973 and is expected to be recognized over 3.4 years and the unrecognized compensation expense for non-vested stock was $114,284 and is expected to be recognized over 3.8 years. These awards are being amortized over the vesting periods on a straight-line basis, net of forfeitures. The Company does not capitalize stock-based compensation costs.

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Non-vested stock, included in salaries and related		$	7,437			$	2,871			$	20,994			$	24,116
Non-vested stock, included in restructuring and other special charges			—				—				1,162				—
Stock options, included in salaries and related			165				104				474				337
Total		$	7,602			$	2,975			$	22,630			$	24,453

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2008:

										Weighted
						Weighted				Average
						Average Exercise				Contractual				Aggregate
(thousands of shares)		Shares				Price				Term (in years)				Intrinsic Value
Outstanding at January 1, 2008			6,876			$	29.13
Granted			138				27.77
Exercised			(63	)			18.26
Forfeited/expired/cancelled			(165	)			42.11
Outstanding at September 30, 2008			6,786			$	29.00				4.3			$	3,707
Options exercisable at September 30, 2008			5,952			$	28.57				4.0			$	3,707

During the nine months ended September 30, 2008 and 2007, the aggregate intrinsic value of options exercised was $486 and $48,376, respectively.

The following table summarizes the Company’s non-vested stock activity for the nine months ended September 30, 2008:

						Weighted Average Fair
(thousands of shares)		Shares				Value at Grant Date
Non-vested at January 1, 2008			1,671			$	39.67
Granted			3,753				26.79
Forfeited			(682	)			33.93
Vested			(253	)			40.78
Non-vested at September 30, 2008			4,489			$	29.74

3. 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 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.

During the year ended December 31, 2006, the Company disposed of businesses that collectively comprised its former Advertising & Communications operating segment, in order to focus more resources to support the growth of the Monster franchise on a global basis. The Company incurred losses net of tax related to these disposals of $299 and $544 in the three and nine month periods ended September 30, 2007, respectively, which are included in discontinued operations, but did not incur these costs in the comparable 2008 periods.

For the three and nine months ended September 30, 2008 and 2007, 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,
		2008				2007				2008				2007
Revenue		$	190			$	7,002			$	6,348			$	21,364
Loss before income taxes			(397	)			(1,099	)			(18,654	)			(4,264	)
Income tax benefit			139				444				29,494				1,658
Income (loss) from discontinued operations, net of tax		$	(258	)		$	(655	)		$	10,840			$	(2,606	)

4. BUSINESS COMBINATIONS

The following table summarizes the Company’s business combinations completed from January 1, 2007 through September 30, 2008. 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
Trovix Inc.		July 31, 2008		Careers - North America
Affinity Labs Inc.		January 3, 2008		Internet Advertising & Fees
Arbeidskamerater AS (Norway)		January 10, 2007		Careers - International

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 $56,675 of goodwill (on a preliminary basis), $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 $3,600 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.

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 $60,021 of goodwill, $1,251 of receivables, $500 of purchased technology, $183 of property and equipment, $61 of other assets and $449 of liabilities. The goodwill recorded in connection with the acquisition will not be deductible for tax purposes.

In January 2007, the Company’s Careers — International segment purchased Arbeidskamerater AS (“AAS”), a Norwegian online career sales company, founded in 2004 as a sales agent for Monster in Norway. The acquisition of AAS enabled Monster to expand within the growing Norwegian online career market. Consideration for the acquisition was $1,654, net of cash acquired, and the Company recorded $1,777 of goodwill. None of the goodwill recorded in connection with the acquisition is deductible for tax purposes.

On October 8, 2008, the Company completed its acquisition of the remaining 55.6% ownership interest in ChinaHR not already owned by it for $174,000 in cash and the conversion of a $25,000 credit facility provided by the Company into ChinaHR equity. See Note 6 for further discussion of the ChinaHR investment and acquisition.

Accrued Integration and Restructuring Costs

The Company has formulated integration and restructuring plans to eliminate redundant facilities, personnel and duplicate assets in connection with its business combinations. These costs were recognized as liabilities assumed in connection with the Company’s business combinations. Accordingly, these costs are considered part of the purchase price of the business combinations and have been recorded as additional goodwill.

Changes in the Company’s approved restructuring plans or costs related to new restructuring initiatives may be recorded in goodwill for an allocation period not to exceed one year following the acquisition date and must be recorded in the Company’s operating results thereafter. As of September 30, 2008 and December 31, 2007, the Company had accrued $4,053 and $5,193, respectively, for integration and restructuring obligations, mainly for future operating lease payments.

5. FAIR VALUE MEASUREMENT

On January 1, 2008, the Company adopted the methods of fair value as described in SFAS 157 to value its financial assets and liabilities. SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, 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. Financial assets (cash equivalents and available-for-sale securities) carried at fair value as of September 30, 2008 are classified in one of the three categories as follows (excluding cash of $91,638):

		Level 1				Level 2				Level 3				Total
U.S. treasury money market funds		$	376,794			$	—			$	—			$	376,794
Bank time deposits			—				30,291				—				30,291
Municipal bonds			—				5,679				—				5,679
Sovereign commercial paper			—				108,025				—				108,025
U.S. and foreign government obligations			—				26,520				—				26,520
Tax exempt auction rate bonds (Note 6)			—				—				93,728				93,728
Total		$	376,794			$	170,515			$	93,728			$	641,037

The Company’s evaluation of its liabilities determined that all liabilities recorded at book basis approximated fair value as of September 30, 2008.

The changes in the fair value of the Level 3 tax exempt auction rate bonds financial assets are as follows:

		Three Months Ended				Nine Months ended
		September 30, 2008				September 30, 2008
Balance beginning of period		$	99,330			$	—
Transfer in							357,228
Unrealized gain (loss) included in other comprehensive income			398				(1,022	)
Net settlements			(6,000	)			(262,478	)
Balance September 30, 2008		$	93,728			$	93,728

6. INVESTMENTS

Marketable Securities

As of September 30, 2008, the Company held $94,750 (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 35 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 are 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 substantially 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 or the issuers redeem their bonds. 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 a component of available for sale marketable securities, non-current in its unaudited consolidated balance sheet as of September 30, 2008. 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 3.69% at September 30, 2008) 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 analysis, and this valuation considered, among other factors, i) the credit quality of the underlying collateral (typically student loans); ii) the financial strength of the counterparties (typically state related higher education agencies) and the guarantors (including the U.S. Department of Education); iii) an estimate of when the next successful auction date will occur; and iv) 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 the original par value and cost of $94,750 were written down to an estimated fair value of $93,728, resulting in an unrealized loss of $1,022. This loss is deemed to be a temporary impairment and has been reflected in accumulated other comprehensive income, a component of stockholders’ equity.

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. 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.

The Company’s available-for-sale investments reported as current and non-current marketable securities as of September 30, 2008 are as follows:

						Gross unrealized				Gross unrealized				Estimated
		Cost				losses				gains				fair value
Current
Municipal bonds		$	5,675			$	—			$	4			$	5,679
Bank time deposits			2,590				—				—				2,590
U.S. and foreign government obligations			25,557				3				—				25,554
Total		$	33,822			$	3			$	4			$	33,823
Non-current
Tax-exempt auction rate bonds		$	94,750			$	1,022			$	—			$	93,728
Total		$	94,750			$	1,022			$	—			$	93,728

The estimated fair value of the Company’s marketable securities as of December 31, 2007 approximated the gross amortized cost value. The Company believes that it did not have any unrealized losses as of December 31, 2007, as the Company sold or rolled over at par more than 95% of the securities held at December 31, 2007.

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 Investments. A temporary impairment charge results in an unrealized loss being recorded in other comprehensive income, a 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, 2008, the Company believes that all of the impairment of its auction rate securities investments 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.

Equity Investments

The Company accounts for investments with non-controlling interests using the equity method of accounting, recording its owned percentage of the investment’s net results of operations in loss in equity interests, net, in the Company’s consolidated statement of operations. Such losses reduce the carrying value of the Company’s investment and gains increase the carrying value of the Company’s investment. Dividends paid by the equity investee reduce the carrying amount of the Company’s investment.

In February 2005, the Company acquired a 40% interest in ChinaHR.com Holdings Ltd. (“ChinaHR”) for consideration of $50,000 in cash. In March 2006, the Company increased its ownership interest in ChinaHR to 44.4% by acquiring an additional 4.4% interest from ChinaHR shareholders, for cash consideration of $19,936. ChinaHR is a leading recruitment website in China and provides online recruiting, campus recruiting and other human resource solutions. As a result of its investment, the Company had the right to occupy three of seven seats on ChinaHR’s Board of Directors. The carrying value of the investment was $41,575 as of September 30, 2008 and was recorded on the consolidated balance sheet as an investment in unconsolidated affiliates.

In March 2006, the Company entered into a loan agreement with ChinaHR, whereby the Company had agreed to advance ChinaHR up to an aggregate of $20,000. Interest on the loans was assessed at the average one-month U.S. Dollar LIBOR rate plus 1% and was payable quarterly, in arrears. The credit facility provided that any advances were due and payable in full on the maturity date, which was the earliest of March 2011 or the consummation of an initial public offering of securities by ChinaHR. At December 31, 2007, the total amount outstanding under the credit facility was $20,000 and was recorded in other assets on the consolidated balance sheet. On January 30, 2008, the Company entered into a separate loan agreement with ChinaHR, whereby the Company had agreed to advance ChinaHR up to an aggregate of $5,000 immediately and up to an additional $2,000 upon the receipt of consolidated financial statements as of and for the year ended December 31, 2007. During the nine months ended September 30, 2008, the Company advanced an additional $5,000 to ChinaHR bringing the total amount outstanding under the credit facilities to $25,000, which was recorded as a component of other assets on the consolidated balance sheet as of September 30, 2008.

On October 8, 2008, the Company completed its acquisition of the remaining 55.6% ownership interest in ChinaHR not already owned by it for $174,000 in cash and the conversion of the $25,000 credit facility noted above into ChinaHR equity. The Company has not yet determined the purchase accounting allocation for specific assets and liabilities, and expects to complete an initial allocation by the end of 2008. Any goodwill recorded in connection with the acquisition will not be deductible for tax purposes.

In September 2008, in connection with its anticipated acquisition of the remaining ownership interest in ChinaHR, the Company hedged certain cash balances denominated in foreign currencies that were to be used to fund a portion of the purchase price. As of September 30, 2008, these hedging instruments had an unrealized gain of $2,381, which was recorded as a component of interest and other, net in the consolidated statement of operations. As of September 30, 2008, the fair value of these hedges was $56,379. All of these hedges settled in October 2008 with a realized gain of $2,570, of which $189 will be recognized in the fourth quarter of 2008 in interest and other, net.

The Company has a 25% equity investment in a company located in Finland related to a business combination completed in 2001. The Company received a dividend of $1,011 in the second quarter of 2008 for this investment. The carrying value of the investment was $785 as of September 30, 2008 and was recorded on the consolidated balance sheet as a component of investment in unconsolidated affiliates.

Income and loss in equity interests, net for the three and nine month periods ended September 30, 2008 and 2007 are based upon unaudited financial information and are as follows by equity investment:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
ChinaHR		$	(2,323	)		$	(3,298	)		$	(8,324	)		$	(8,561	)
Finland			237				224				824				1,101
Loss in equity interests, net		$	(2,086	)		$	(3,074	)		$	(7,500	)		$	(7,460	)

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 made a strategic decision to in-source customer service and therefore the current reduction will be approximately 700 associates. Through September 30, 2008, the Company has notified or terminated approximately 480 associates and approximately 140 associates have voluntarily left the Company. Cumulative expense for the program since inception is $29,848. The Company anticipates that these initiatives will 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.

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

		December 31,								Cash				Non-Cash				September 30,
		2007				Expense				Payments				Utilization(1)				2008
Workforce reduction		$	6,226			$	9,858			$	(11,801	)		$	(1,162	)		$	3,121
Fixed asset write-offs			—				2,771				—				(2,771	)			—
Consolidation of office facilities			459				338				(422	)			—				375
Other costs and professional fees			505				284				(749	)			—				40
Total		$	7,190			$	13,251			$	(12,972	)		$	(3,933	)		$	3,536

8. PROPERTY AND EQUIPMENT, NET

		September 30, 2008				December 31, 2007
Capitalized software costs		$	171,119			$	135,935
Furniture and equipment			31,044				32,573
Leasehold improvements			30,020				27,272
Computer and communications equipment			159,061				137,633
			391,244				333,413
Less: accumulated depreciation			238,892				210,016
Property and equipment, net		$	152,352			$	123,397

Depreciation expense was $36,253 and $27,618 for the nine months ended September 30, 2008 and 2007, respectively.

9. FINANCING AGREEMENT

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 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 and lend funds to affiliated companies, or enter into new lines of business and contains criteria on the maintenance of certain financial statement amounts and ratios, all as defined in the agreement. As of September 30, 2008, the Company was in compliance with its covenants.

At September 30, 2008, the utilized portion of this credit facility was $247,000 in borrowings and $1,925 for standby letters of credit and $1,075 was unused. At September 30, 2008, the one month US Dollar LIBOR rate, overnight federal funds rate, and Bank of America prime rate were 3.9%, 2.0% and 5.0%, respectively. As of September 30, 2008, the Company used option (i) to determine the interest rate applied on its outstanding balance, with the prevailing interest rate of 5.0%.

10. STOCKHOLDERS’ EQUITY

Common and Class B Common Stock

Each share of Class B common stock is entitled to ten votes on each matter that the holders of Common Stock are entitled to vote on and is convertible, at any time, at the option of the stockholder into one share of common stock. As of September 30, 2008, all Class B common stock was held by Andrew J. McKelvey, the Company’s former Chief Executive Officer.

On January 22, 2008, the Company, the Special Litigation Committee of the Board of Directors of the Company and Mr. McKelvey entered into a Memorandum of Understanding (“Memorandum of Understanding”). The Memorandum of Understanding provides that, pursuant to a Settlement Agreement, Mr. McKelvey will agree, among other things, to convert (the “Conversion”) all of the shares of Class B common stock of the Company held by him into shares of common stock of the Company (thereby terminating the supervoting rights of the shares of Class B common stock). Pursuant to the terms of the Memorandum of Understanding, Mr. McKelvey has agreed that, pending the completion of the Conversion, he shall be entitled to vote only one-tenth of the shares of Class B common stock beneficially owned by him on all matters submitted to the holders of common stock for their vote, approval, waiver or consent. With respect to the remaining nine-tenths of the shares of Class B common stock beneficially owned by Mr. McKelvey, he has, pursuant to the Memorandum of Understanding, given the Chief Executive Officer of the Company an irrevocable proxy to vote such shares on all matters submitted to the holders of common stock for their vote, approval, waiver or consent in the same percentages as the aggregate votes cast by the holders of shares of common stock (other than Mr. McKelvey) on such matters. A formal settlement agreement was later executed by the parties and granted preliminary approval by the courts. On October 2, 2008, the Supreme Court of the State of New York, New York County, granted final approval of the settlement agreement, including the settlement with Mr. McKelvey, see Note 14.

Share Repurchase Plan and Share Withholdings

In November 2005, the Board of Directors authorized the Company to purchase up to $100,000 of shares of its common stock. The November 2005 share repurchase plan was utilized fully during 2007. In September 2007, the Board of Directors authorized the Company to purchase up to an additional $250,000 of shares of its common stock. In October 2007, the Board of Directors authorized the Company to purchase an additional $100,000 of shares of its common stock under the share repurchase plan. In January 2008, the Board of Directors authorized the Company to purchase an additional $100,000 of shares of its common stock under the share repurchase plan. All current repurchase plan authorizations expire on January 30, 2009. For the nine months ended September 30, 2008, the Company purchased 5,454,316 shares of its common stock for an aggregate purchase price of $126,827. From inception through September 30, 2008, under the authorized repurchase plan, the Company repurchased 13,794,012 shares of its common stock for an aggregate purchase price of $423,577. As of September 30, 2008, the Company has authorization to purchase up to an additional $126,423 of shares of our common stock and all current repurchase plan authorizations expire on January 30, 2009. The Company also withheld 56,213 shares valued at $1,306 during the first nine months of 2008 to satisfy withholding obligations upon the vesting of employee stock awards.

11. COMPREHENSIVE INCOME

The Company’s comprehensive income is as follows:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Net income		$	42,778			$	33,301			$	96,199			$	101,399
Foreign currency translation adjustment and other			(56,153	)			22,599				(29,906	)			28,109
Net unrealized gain (loss) on available-for-sale securities			349				118				(1,021	)			72
Comprehensive (loss) income		$	(13,026	)		$	56,018			$	65,272			$	129,580

12. 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 following tables present the Company’s operations by business segment and by geographic region:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Revenue		2008				2007				2008				2007
Careers — North America		$	155,165			$	175,309			$	502,983			$	533,807
Careers — International			142,441				121,687				452,386				344,738
Internet Advertising & Fees			34,583				33,146				97,586				97,412
Revenue		$	332,189			$	330,142			$	1,052,955			$	975,957

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Operating Income		2008				2007				2008				2007
Careers — North America		$	43,120			$	51,455			$	141,230			$	171,912
Careers — International			30,231				7,344				71,790				27,360
Internet Advertising & Fees			4,726				3,487				7,951				15,228
Corporate expenses			(15,504	)			(11,289	)			(93,805	)			(60,707	)
Operating income		$	62,573			$	50,997			$	127,166			$	153,793

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Depreciation and Amortization		2008				2007				2008				2007
Careers — North America		$	6,372			$	5,403			$	17,322			$	14,230
Careers — International			6,560				4,785				18,281				12,988
Internet Advertising & Fees			1,661				1,511				4,547				3,960
Corporate expenses			117				146				353				684
Depreciation and amortization		$	14,710			$	11,845			$	40,503			$	31,862

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Restructuring and Other Special Charges		2008				2007				2008				2007
Careers — North America		$	651			$	4,948			$	4,607			$	4,948
Careers — International			2,236				4,291				6,752				4,291
Internet Advertising & Fees			251				1,244				1,370				1,244
Corporate expenses			454				672				522				672
Restructuring and other special charges		$	3,592			$	11,155			$	13,251			$	11,155

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Revenue by Geographic Region		2008				2007				2008				2007
United States		$	183,208			$	202,814			$	579,469			$	614,431
Germany			33,669				27,550				108,664				77,312
Other foreign			115,312				99,778				364,822				284,214
Revenue		$	332,189			$	330,142			$	1,052,955			$	975,957

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, 2008				December 31, 2007
Careers — North America		$	635,596			$	673,353
Careers — International			696,395				721,679
Internet Advertising & Fees			193,772				136,851
Corporate			535,849				424,057
Shared assets (a)			141,362				107,140
Discontinued operations			—				14,730
Total assets		$	2,202,974			$	2,077,810

The following table reconciles long-lived assets by geographic region to the Company’s consolidated balance sheets:

Long-lived Assets by Geographic Region (a)		September 30, 2008				December 31, 2007
United States		$	692,816			$	541,580
International			203,394				232,502
Total long-lived assets		$	896,210			$	774,082

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 accrued interest and penalties thereon), at September 30, 2008 and December 31, 2007 is recorded as non-current taxes payable of $115,318 and $111,108, 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. At this point, it is not possible to provide an estimate of the amount, if any, of significant changes in unrecorded tax benefits that are reasonably possible to occur within the next twelve months.

14. 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

The Company announced on June 12, 2006 that a committee of independent directors of the Board of Directors, assisted by outside counsel, was conducting an independent investigation to review the Company’s historical stock option grant practices and related accounting.

Investigations.

The United States Attorney’s Office for the Southern District of New York (“USAO”) and the SEC have informed the Company that each is conducting an investigation into its past stock option grants. In connection with these investigations, the Company has received a grand jury subpoena from the United States District Court for the Southern District of New York and requests for the voluntary production of documents from the SEC. The Company is fully cooperating with the USAO and the SEC. On February 15, 2007, the Company’s former General Counsel pleaded guilty to two felony counts relating to those historical stock option grants and the SEC instituted a civil action against him. On March 26, 2007, the SEC civil action was settled pursuant to a final judgment permanently enjoining the Company’s former General Counsel from violating the federal securities laws and from acting as an officer or director of a public company. On January 23, 2008, Andrew J. McKelvey, the former Chairman and Chief Executive Officer of the Company, entered into a deferred prosecution agreement with the USAO. Pursuant to the deferred prosecution agreement, the USAO has agreed to defer prosecution of Mr. McKelvey for conspiracy to commit securities fraud and securities fraud for one year and not proceed with any prosecution of Mr. McKelvey if, after one year, he has complied with his obligations under the agreement. On January 23, 2008, the SEC commenced an action against Mr. McKelvey and, at the same time, announced a settlement with Mr. McKelvey, pursuant to which he will be permanently enjoined from violating the federal securities laws, will pay the SEC approximately $276 in disgorgement and prejudgment interest, and will be barred from serving as an officer or director of a public company. On April 30, 2008, James J. Treacy, who served as a senior executive of the Company from 1994 to 2002 and as a member of the Company’s Board of Directors from 1998 to 2003, was indicted for securities fraud and conspiracy in the United States District Court for the Southern District of New York. In addition, on April 30, 2008, the SEC commenced a civil action in the United States District Court for the Southern District of New York against Mr. Treacy and Anthony Bonica, the Company’s former Controller, alleging multiple violations of the federal securities laws in connection with the Company’s historical stock option grants.

ERISA Action (Taylor v. McKelvey et al., 06 CV 8322 (S.D.N.Y.)).

In October 2006, a putative class action litigation was filed in the United States District Court for the Southern District of New York by a former Company employee against the Company and a number of its current and former officers and directors. On February 16, 2007, plaintiff served an amended class action complaint. The amended complaint 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, plaintiff (joined by three new proposed class representatives) filed a second amended complaint (“SAC”) against the Company, three of the individuals who had been defendants in the amended complaint, and three new defendants who are former employees of the Company. The SAC 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 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 is now pending.

Derivative Actions (In re Monster Worldwide, Inc. Stock Option Derivative Litigation, Master Docket 1:06:cv 04622 (S.D.N.Y.) and Louisiana Municipal Police Employees’ Retirement System, et al. v. Paul Camara, et al., Index. No. 06 108700 (Supreme, N.Y. County)).

Derivative actions in connection with historical stock option practices have been commenced by shareholders purportedly on behalf of the Company in both the United States District Court for the Southern District of New York and in the Supreme Court of the State of New York, New York County, against a number of current and former officers and directors of the Company, naming the Company as a nominal defendant (the “Derivative Actions”).

On October 20, 2006, the three federal court actions were consolidated by the Court and styled as In re Monster Worldwide, Inc. Stock Option Derivative Litigation, Master Docket 1:06:cv 04622 (S.D.N.Y.)(NRB-DCF) (Consolidated Action). On or about December 20, 2006, plaintiffs in the consolidated federal actions filed a consolidated amended complaint. The consolidated amended complaint asserts claims for breach of fiduciary duty, gross mismanagement, unjust enrichment, and violations of Sections 10(b) and 14(a) of the Exchange Act for the period between January 1, 1997 and October 2006. The federal court plaintiffs seek, among other relief, an indeterminate amount of damages from the individual defendants.

The three purported derivative actions that were filed in the Supreme Court of the State of New York, New York County were also consolidated. The consolidated actions have been styled as Louisiana Municipal Police Employees’ Retirement System, et al. v. Paul Camara, et al., Index. No. 06-108700 (Supreme, N.Y. County) (previously captioned as In re Monster Worldwide Inc. Derivative Litigation.) On or about December 1, 2006, the plaintiffs in the consolidated state court actions filed a consolidated amended complaint asserting claims for breach of fiduciary duty and related state law causes of action. The state court plaintiffs seek, among other relief, an indeterminate amount of damages from the individual defendants.

On November 21, 2006, the Board of Directors of the Company appointed a Special Litigation Committee of the Board (the “SLC”) composed of independent and disinterested directors to investigate and take whatever actions it deems appropriate with respect to the claims made in the Derivative Actions.

On January 22, 2008, Andrew J. McKelvey, the former Chairman and Chief Executive Officer of the Company, the SLC and the Company entered into a Memorandum of Understanding providing for the settlement of claims asserted on behalf of the Company against Mr. McKelvey in the Derivative Actions. The settlement provides that Mr. McKelvey will pay the Company $8,000 and convert the 4,762,000 shares of Class B common stock owned by him for a like number of ordinary shares of common stock. The Memorandum of Understanding calls for the execution of a Settlement Agreement to be subject to Court approval. Pursuant to the terms of the Memorandum of Understanding, Mr. McKelvey has agreed that, pending the completion of the conversion, he shall be entitled to vote only one-tenth of the shares of Class B common stock beneficially owned by him on all matters submitted to the holders of common stock for their vote, approval, waiver or consent. With respect to the remaining nine-tenths of the shares of Class B common stock beneficially owned by Mr. McKelvey, he has, pursuant to the Memorandum of Understanding, given the Chief Executive Officer of the Company an irrevocable proxy to vote such shares on all matters submitted to the holders of common stock for their vote, approval, waiver or consent in the same percentages as the aggregate votes cast by the holders of shares of common stock (other than Mr. McKelvey) on such matters.

Prior to the settlement with Mr. McKelvey, the Company, with the approval of the SLC, entered into additional memoranda of understanding providing for the settlement of claims on behalf of the Company asserted against certain other officers and directors (current and former) of the Company in the Derivative Actions. On June 2, 2008, the formal settlement agreement resolving Monster Worldwide’s claims, including those asserted in the Derivative Actions, against Mr. McKelvey and the others was presented for approval to both the Supreme Court of the State of New York, New York County, and the United States District Court for the Southern District of New York. On June 11, 2008, the United States District Court for the Southern District of New York preliminarily approved the settlement agreement and conditionally dismissed the federal derivative action, subject to further consideration thereof at a settlement hearing to be held by the Supreme Court of the State of New York, New York County. Pursuant to the settlement agreement, the Company will receive approximately $10,000 in cash from various individuals (inclusive of the $8,000 from Mr. McKelvey), the Class B common stock held by Mr. McKelvey will be converted into ordinary shares of common stock, certain outstanding stock options and restricted stock units will be cancelled and the exercise price of certain outstanding options will be increased. On October 2, 2008, the Supreme Court of the State of New York, New York County, granted final approval of the settlement.

Securities Class Action (In re Monster Worldwide Securities Litigation, 07 Civ. 2237 (S.D.N.Y.)).

On or about March 15, 2007, a putative securities shareholder class action was filed by Middlesex County Retirement System against the Company and certain former employees in the United States District Court for the Southern District of New York designated as In re Monster Worldwide Securities Litigation, 07 Civ. 2237 (S.D.N.Y.) (JSR), seeking an indeterminate amount of damages on behalf of all persons or entities, other than defendants, who purchased or acquired the securities of the Company from May 6, 2005 until September 9, 2006. On July 9, 2007, plaintiffs filed an amended complaint in the securities class action asserting claims against the Company, Andrew McKelvey and Myron Olesnyckyj, the Company’s former General Counsel, based on an alleged violation of Section 10(b) the Exchange Act and against the individual defendants based on an alleged violation of Section 20(a) of the Exchange Act. On July 14, 2008, the Court certified a class consisting of all of those who purchased or acquired securities of the Company from May 5, 2005 to June 9, 2006 other than the defendants, the officers and directors of the Company, members of the immediate families of any excluded person, the legal representatives, heirs, successors or assigns of an excluded person, any entity in which defendants have or had a controlling interest and any current of former Company employee who acquired the Company’s securities through the exercise of options. On September 28, 2008, the lead plaintiff, the Company and the individual defendants entered into a Stipulation of Settlement (the “Stipulation of Settlement”) that memorializes the terms pursuant to which the parties have agreed, subject to Court approval, to settle the securities class action. The Stipulation of Settlement provides for a payment to the class by the defendants of $47,500 in full settlement of the claims asserted in the Securities Class Action. The Company’s cost is anticipated to be approximately $25,000 (net of insurance and contribution from another defendant). On October 3, 2008, the United States District Court for the Southern District of New York granted preliminary approval of the Stipulation of Settlement and scheduled a hearing with respect to final approval of the settlement of the federal shareholder class action for November 21, 2008.

Dispute with Option Holders.

From July 25, 2006 to December 26, 2006, the Company suspended its Registration Statement on Form S-8, resulting in a prohibition on the exercise of stock options. The Company received correspondence from, or on behalf of, certain former employees who are grantees of certain vested stock options that were scheduled to expire or be forfeited unless exercised during this suspension period. Due to the suspension of the Company’s S-8, these individuals were precluded from exercising such options prior to the expiration date of the options. The former employees informed the Company that they would seek to hold the Company liable for any financial damages suffered as a result of their inability to exercise the options during the suspension period. In December 2006, the Company’s Board of Directors approved the payment of approximately $5,000 to compensate certain former employees for the value of stock options that expired during the period that the Company’s equity compensation plans were suspended. In exchange for payment, the Company requested a release of any liability. The Company has made payments to, and has received releases from, substantially all of such former employees.

Consequences Under the Internal Revenue Code.

The Company has notified the Internal Revenue Service of the stock option review and results thereof. Under Internal Revenue Code section 162(m) (“IRC 162(m)”), stock options that are in-the-money at the time of grant do not qualify as performance-based compensation. The Company is not entitled to a deduction for the compensation expense related to the exercise of those options held by officers who are covered by IRC 162(m).

In addition, certain stock options which were granted on a discounted basis (exercise price is less than the fair market value of the stock on the date of grant) are subject to Internal Revenue Code section 409A (“409A”). The provisions of 409A impose adverse consequences upon the individuals who receive such options including excise tax, additional interest charges and accelerated inclusion in income. In January 2007, the Board approved a tender offer plan to amend certain stock options granted to approximately 60 individuals who received stock options that are subject to 409A in order to correct the options such that they are no longer subject to this provision. The correction was made by increasing the exercise price to the same value used in connection with the financial statement restatement. In April 2007, the tender offer was finalized and for individuals who agreed to the modification, the Company compensated them for the increase in the exercise price by paying an amount equal to the difference in the exercise price for each option. In January 2008, the Company paid approximately $300 to these individuals.

General.

The Company may become subject to additional private or government actions. The expense of defending such litigation may be significant. In addition, an unfavorable outcome in such litigation could have a material adverse effect on the Company’s business and results of operations. The Company may also be obligated under the terms of its by-laws to advance litigation costs for directors and officers named in litigation relating to their roles at the Company.

Security Breach

In August 2007, the Company announced that certain of its servers had been the subject of attacks by malicious software and that, as a result, information such as names, addresses, phone numbers, and email addresses for job seekers with resumes posted on websites operated by the Company had been illegally downloaded. The Company does not generally collect social security numbers or financial data about its job seekers, such as bank account information or credit card accounts. The Company responded by conducting a comprehensive review of internal processes and procedures, enhancing its processes and procedures and notifying job seekers and employers of the attack and alerting job seekers about potential efforts to use that information to improperly obtain sensitive data from the job seekers in so called “phishing” emails. In October 2007, in connection with the attack, the Company was requested to provide information to the staff of the Federal Trade Commission (the “FTC”) in connection with a non-public inquiry into certain information security practices of Monster. After the Company submitted such information to the FTC, the matter was resolved without further action required by the Company. The Company has also received inquiries from certain other governmental authorities (foreign and domestic) in connection with the attack. The Company has cooperated with these governmental authorities’ inquiries and, if necessary, intends to continue to cooperate with such requests.

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. Discovery in this action is underway.

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 Company took down the website accused of infringement for reasons unrelated to the lawsuit and intends to vigorously defend this matter.

Patent Claim

In April 2008, the Company was served with an action entitled Pitchware, Inc. v. Monster Worldwide, Inc.; CareerBuilder LLC; Gannett Co., Inc.; The McClatchy Company; Microsoft Corporation; and Career Marketplace, Inc. (Case No. C08-01848), filed in the United States District Court for the Northern District of California. The Complaint alleges that certain of the features that the respective Defendants offer their users violates plaintiff’s patent. The Complaint seeks permanent injunctive and/or monetary relief. Based on the Company’s initial review of the Complaint, the Company believes the claims against the Company set forth in the Complaint are without merit. On September 2, 2008, the plaintiff voluntarily dismissed the action with prejudice.

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, 2008, and the related consolidated statements of operations for the three and nine month periods ended September 30, 2008 and 2007 and cash flows for the nine month periods ended September 30, 2008 and 2007 included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended September 30, 2008. 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 reviews, 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, 2007, 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 11, 2008, we expressed an unqualified opinion on those consolidated financial statements. As discussed in Note 3, the Company has classified the results of operations of Tickle Inc. as discontinued operations and accordingly the accompanying December 31, 2007 balance sheet reflects adjustments relating to this change. We have not audited the accompanying balance sheet.

/s/ BDO SEIDMAN, LLP

BDO Seidman, LLP
New York, New York
October 30, 2008

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”, “Monster,” “we,” “our” or “us”) makes forward-looking statements in this report and in other reports and proxy statements that we file with the Securities and Exchange Commission (the “SEC”). In addition, we make forward-looking statements in this report and in other reports and proxy statements that we file with 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 and Section 21E of the Exchange Act. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the Company’s strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, risks associated with acquisitions or dispositions, competition, ongoing costs associated with the Company’s historical stock option practices and related litigation, costs associated with our restructuring plan and security breach, and the other risks discussed in this report and our other filings made with the SEC.

There are many factors—many beyond our control—that could cause results to differ significantly from our expectations. Some of these factors are described in “Item 1A. Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2007.

Overview

Monster Worldwide is the premier global online “careers” solution, bringing people together to improve their lives. With a presence in approximately 40 countries around the world, we have been able to build on Monster’s brand and create worldwide awareness by offering online recruiting solutions that continually redefine the way employers and job seekers connect. For the employer, 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 to enhance the consumer experience.

Our services and solutions include searchable job postings, media placement, a resume database and other career-related content. Users can search our job postings and post their resumes for free on each of our websites. Employers pay to post jobs, create recruitment organizer for searching 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. We believe the growth opportunities internationally are particularly large and believe that we are positioned to benefit from our expanded reach and increased brand recognition around the world. Our Careers — International segment accounted for 43.0% of our consolidated revenue for the nine months ended September 30, 2008, an increase of 7.7% over the comparable 2007 period. We are also positioned to benefit from the continued secular shift towards online recruiting. 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 Careers business over the next several years.

We also operate a network of websites within our Internet Advertising & Fees segment 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 website traffic through lead generation, display advertising and other consumer related products. We believe that these properties are appealing to advertisers and other third parties as they deliver certain discrete demographics entirely online.

Business Combinations

For the period January 1, 2007 through September 30, 2008, we completed the following 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
Trovix Inc.		July 31, 2008		Careers — North America
Affinity Labs Inc.		January 3, 2008		Internet Advertising & Fees
Arbeidskamerater AS (Norway)		January 10, 2007		Careers — International

Subsequent to the end of the third quarter, on October 8, 2008, the Company completed its acquisition of the remaining 55.6% ownership interest in ChinaHR not already owned by it for $174.0 million in cash and the conversion of a $25.0 million Company provided credit facility into ChinaHR equity.

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 results of Tickle as a discontinued operation. Our decision was based upon Tickle’s non-core 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.

Also during the year ended December 31, 2006, we disposed of businesses that collectively comprised our former Advertising & Communications operating segment. These transactions were executed in order to focus more resources to support the growth of the Monster franchise on a global basis. For the three and nine months ended September 30, 2008 and 2007, the revenue and costs related to our discontinued and disposed of 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)		2008				2007				2008				2007
Revenue		$	190			$	7,002			$	6,348			$	21,364
Loss before income taxes			(397	)			(1,099	)			(18,654	)			(4,264	)
Income tax benefit			139				444				29,494				1,658
Income (loss) from discontinued operations, net of tax		$	(258	)		$	(655	)		$	10,840			$	(2,606	)

Restructuring Plan

In July 2007, we announced a strategic restructuring plan intended to position us 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 while simultaneously re-investing in areas of strategic importance, such as innovation, product and technology. Subsequent to the announcement of this plan, the Company made a strategic decision to in-source customer service and therefore the current reduction will be approximately 700 associates. Through September 30, 2008, we have notified or terminated approximately 480 associates and approximately 140 associates have voluntarily left the Company. The restructuring plan arose out of a review of our organizational and cost structure by our executive management team. The restructuring is intended to realign the Company’s cost structure to permit investment in key areas that will improve the customer experience, foster revenue growth and margin expansion and reduce operating expense growth rates from prior levels. We have recorded charges and accruals in connection with these restructuring initiatives and prior business reorganization plans. These accruals include estimates pertaining to future lease obligations, employee separation costs and the settlements of contractual obligations resulting from our initiatives. Although we do not anticipate significant changes, actual costs may differ from these estimates.

Results of Operations

Consolidated operating results as a percentage of revenue for the three and nine months ended September 30, 2008 and 2007 are as follows:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Revenue			100.0	%			100.0	%			100.0	%			100.0	%
Salaries and related			41.1	%			38.5	%			39.2	%			40.3	%
Office and general			21.6	%			21.0	%			21.0	%			20.5	%
Marketing and promotion			17.4	%			21.7	%			22.7	%			22.3	%
Provision for legal settlements, net			0.0	%			0.0	%			3.8	%			0.0	%
Restructuring and other special charges			1.1	%			3.4	%			1.3	%			1.1	%
Total operating expenses			81.2	%			84.6	%			87.9	%			84.2	%
Operating income			18.8	%			15.4	%			12.1	%			15.8	%
Interest and other, net			1.6	%			2.0	%			1.5	%			1.9	%
Income from continuing operations before income taxes and loss in equity interests			20.4	%			17.4	%			13.6	%			17.7	%
Income taxes			6.8	%			6.2	%			4.8	%			6.3	%
Loss in equity interest, net			(0.6	)%			(0.9	)%			(0.7	)%			(0.8	)%
Income from continuing operations			13.0	%			10.3	%			8.1	%			10.7	%
Income (loss) from discontinued operations, net of tax			-0.1	%			-0.2	%			1.0	%			-0.3	%
Net income			12.9	%			10.1	%			9.1	%			10.4	%

Consolidated Revenue, Operating Expenses and Operating Income

Our consolidated revenue, operating expenses and operating income for the three months ended September 30, 2008 and 2007 are as follows:

						% of								% of				Increase				Increase
(dollars in thousands)		2008				Revenue				2007				Revenue				(Decrease)				(Decrease)
Revenue		$	332,189				100.0	%		$	330,142				100.0	%		$	2,047				0.6	%
Salaries and related			136,506				41.1	%			126,940				38.5	%			9,566				7.5	%
Office and general			71,834				21.6	%			69,466				21.0	%			2,368				3.4	%
Marketing and promotion			57,684				17.4	%			71,584				21.7	%			(13,900	)			(19.4	)%
Restructuring and other special charges			3,592				1.1	%			11,155				3.4	%			(7,563	)			(67.8	)%
Operating expenses			269,616				81.2	%			279,145				84.6	%			(9,529	)			(3.4	)%
Operating income		$	62,573				18.8	%		$	50,997				15.4	%		$	11,576				22.7	%

Our consolidated revenue grew 0.6% in the third quarter of 2008 compared to 2007. Careers — International experienced strong revenue growth of 17.1% from increases throughout continental Europe and in the Asia Pacific region and accounting for 42.9% of consolidated revenue in 2008 compared to 36.9% in 2007. Careers — North America revenue decreased 11.5%. The effect of the weakening U.S. dollar contributed approximately $5.5 million to reported revenue, or approximately 1.7% of the overall growth.

Our consolidated operating expenses declined 3.4% in the third quarter of 2008, reflecting our continued commitment to contain expense growth while we reinvest in critical areas such as sales, technology, product innovation, customer service and infrastructure. Salary and related expenses in third quarter of 2008 were higher by 7.5% from the third quarter of 2007, primarily from increases in stock based compensation from $3.0 million in 2007 to $7.6 million in 2008, as we are providing equity and incentive compensation opportunities to a broader set of associates and higher salaries and benefits on an 11% increase in headcount. Increases in office and general expenses were driven primarily by increased expense from depreciation and amortization of $2.9 million, incremental facilities’ costs of $2.3 million partially offset by a reduction in professional fees of $4.0 million primarily from lower consulting expenses related to the security breach. Marketing and promotion expenses decreased $13.9 million, or 19.4%, in 2008 compared to 2007, as a result of our efforts to centralize the purchase of certain key services, such as media buying and production, and also as a result of a more targeted market approach. The effects of the weakening U.S. dollar increased our consolidated operating expenses by approximately $4.3 million, or 1.5%, in the third quarter of 2008 compared to the 2007 period.

Our consolidated operating margin was 18.8% in the third quarter of 2008, compared to 15.4% in the third quarter of 2007. Operating income increased $11.6 million or 22.7% in the third quarter of 2008 compared to 2007, primarily as a result of cost containment efforts. As a result of our restructuring and reinvestment programs, we believe we have made solid progress in improving the Company’s operating platform to facilitate future growth. Increased revenue from our Careers - International segment also added to higher operating income.

The following presentation of our segment results is prepared based on the criteria we use when evaluating the performance of our business units. For these purposes, management views certain non-cash expenses, such as depreciation expense, amortization of intangibles, amortization of stock-based compensation and non-cash restructuring and other special charges, as a separate component of operating profit. We believe that this presentation provides important indicators of our operating strength and is useful to investors when evaluating our operating performance.

Careers — North America

The operating results of our Careers — North America segment for the three months ended September 30, 2008 and 2007 are as follows:

						% of								% of				$ Increase				% Increase
(dollars in thousands)		2008				Revenue				2007				Revenue				(Decrease)				(Decrease)
Revenue		$	155,165				100.0	%		$	175,309				100.0	%		$	(20,144	)			(11.5	)%
Selling, general and administrative (a)			102,649				66.2	%			117,720				67.2	%			(15,071	)			(12.8	)%
Depreciation and amortization (b)			9,396				6.1	%			6,134				3.5	%			3,262				53.2	%
Operating income		$	43,120				27.8	%		$	51,455				29.4	%		$	(8,335	)			(16.2	)%

Revenue in our Careers — North America segment decreased $20.1 million or 11.5% in the third quarter of 2008, compared to the prior year period. The weaker U.S. economy impacted overall hiring demand as customers became more deliberate with their recruiting decisions. Our business was negatively impacted in the financial services and housing sectors, reflecting the overall weakness in these industries, as well as associated industries, such as construction and manufacturing. Partially offsetting this was growth in our government, newspaper partnership and Canadian business.

Operating costs in our Careers — North America segment decreased 9.5%, primarily as the result of a 24% decrease in marketing and promotion expenditures as a result of our efforts to centralize the purchase of certain key services, such as media buying and production, and also as a result of a more targeted market approach. In addition, salary and related expenses decreased by 5%, primarily the result of lower costs per employee resulting from restructuring, partially offset by the staffing of our new customer service center. Stock-based compensation increased $1.4 million in 2008 compared to 2007, as a result of a broader level of associates participating in our stock-based compensation plan. Restructuring expenses decreased $4.3 million in the third quarter of 2008 compared to 2007 primarily on lower severance expense. The portion of Careers — North America’s costs for technology infrastructure increased in the third quarter by 20%, as we remain committed to investing in our product, new technology, customer service and other assets in order to sustain long-term profitability. We expect to continue our cost containment efforts in order to mitigate some of the effects of the weaker U.S. economy on revenue, while still investing in efforts to improve customer service and our technology infrastructure.

Our Careers — North America segment generated an operating margin of 27.8% in the third quarter of 2008, compared to 29.4% reported in the comparable 2007 period. Operating income in our Careers - North America segment decreased $8.3 million or 16.2% in the third quarter of 2008 compared to the 2007 period. The decrease was primarily the result of the 11.5% reduction in revenue, increased costs for technology infrastructure and stock-based compensation, partially offset by the decrease in marketing and other operating costs and restructuring expenses, as noted above.

Careers — International

The operating results of our Careers — International segment for the three months ended September 30, 2008 and 2007 are as follows:

						% of								% of				$ Increase				% Increase
(dollars in thousands)		2008				Revenue				2007				Revenue				(Decrease)				(Decrease)
Revenue		$	142,441				100.0	%		$	121,687				100.0	%		$	20,754				17.1	%
Selling, general and administrative (a)			103,381				72.6	%			108,791				89.4	%			(5,410	)			(5.0	)%
Depreciation and amortization (b)			8,829				6.2	%			5,552				4.6	%			3,277				59.0	%
Operating income		$	30,231				21.2	%		$	7,344				6.0	%		$	22,887				311.6	%

Our Careers — International segment delivered revenue growth of 17.1% in the third quarter of 2008 compared to the third quarter of 2007. We experienced strong revenue growth throughout continental Europe with our Careers — International revenue accounting for 42.9% of consolidated revenue in 2008, compared to 36.9% in 2007. Our leading position in large geographic markets across Europe and the ongoing secular shift from print to online continued to drive revenue growth; however, we did experience a slowdown in customer activity, particularly from U.S. based multi-national customers reflecting the uncertain economic environment. In the Asia/Pacific region we continued to experience strong revenue growth. We are seeing signs of economic slowdown in a majority of the regions where we operate. The effect of the weakening U.S. dollar in the third quarter of 2008 increased reported revenue by approximately $5.5 million, or approximately 4.5% of an increase in the growth rate.

Our Careers — International segment operating expenses decreased $2.1 million or 1.9% in 2008 compared to 2007, primarily as a result of a 32% reduction in marketing and promotion expenditures as a result of our efforts to centralize the purchase of certain key services, such as media buying and production, and also as a result of a more targeted market approach, as well as lower costs for the security breach remediation. This decrease was partially offset by a 14% increase in technology infrastructure costs in the third quarter of 2008, as we remain committed to investing in our product, new technology and other technology assets in order to sustain long-term profitability. In addition, we incurred higher salary and related costs of 12% on a 2% increase in employee headcount and a broader level of associates participating in our stock-based compensation plan. The effect of the weakening U.S. dollar contributed approximately $4.2 million or 3.7% to expense growth in 2008.

Our Careers — International segment generated an operating margin of 21.2% in the third quarter of 2008, an increase from a 6.0% reported operating margin in the comparable 2007 period. Operating income in our Careers — International segment increased $22.9 million in the third quarter of 2008 compared to the 2007 period. The increase was primarily the result of an increase in revenues of $20.8 million and a slight decrease in expenses. The effect of the weakening of the U.S. dollar had a $1.3 million positive effect on reported operating income.

Internet Advertising & Fees

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 results of Tickle as a discontinued operation. The operating results of our Internet Advertising & Fees segment for the three months ended September 30, 2008 and 2007 are as follows:

						% of								% of				$ Increase				% Increase
(dollars in thousands)		2008				Revenue				2007				Revenue				(Decrease)				(Decrease)
Revenue		$	34,583				100.0	%		$	33,146				100.0	%		$	1,437				4.3	%
Selling, general and administrative (a)			27,158				78.5	%			27,830				84.0	%			(672	)			(2.4	)%
Depreciation and amortization (b)			2,699				7.8	%			1,829				5.5	%			870				47.6	%
Operating income		$	4,726				13.7	%		$	3,487				10.5	%		$	1,239				35.5	%