Monster Worldwide Inc. CEO SALVATORE IANNUZZI bought 72000 shares on 11-04-2008 at $13.94
Monster Worldwide's long-term business strategy is designed to capitalize on the opportunity we foresee in the global online recruitment marketplace and related markets, while focusing on improved operating efficiencies and controlling our expense growth rates. Our strategy calls for continued investment in product innovation, and enhanced technology and marketing to expand our global leadership position in an effort to achieve long-term profitability and build shareholder value.
Monster was built by focusing on the needs of employers and job seekers, and we are developing stronger customer relationships and improved products as a part of our growth strategy. Through innovative product offerings, we continue to offer greater value to all job seekers â€“ even those seekers who are not currently actively engaged in a job search. The improvements we have made to our product offerings and services are designed to drive quality traffic to our site and increase our visitors' job response rate. We believe that more active seeker engagement will translate directly into higher quality candidates for our employers.
We are focused not only on customer service and satisfaction, but also on building and maintaining customer loyalty. Our ongoing investments in our technology platforms are designed to create secure, scalable and redundant systems. We are drawing on our full global network for "best in class" product and service ideas, taking concepts that have been well-received in one market and adapting them for the entire organization as appropriate.
We have refocused our efforts across the entire organization to streamline and globalize our resources and control the growth rate of our operating expenses. At the same time, we are committed to funding critical investments through our cost savings initiatives.
To fuel continued growth in our business, we are striving to increase our local and regional presence, while providing more relevant products and services to our customers and job seekers, and at the same time expanding globally. We believe that our sharpened focus on engaging customers, a new marketing program, and continued efforts to increase sales force productivity will allow us to be substantially more competitive. We will continue to capitalize on the strong market position we have developed in larger international markets, particularly Europe. Our ongoing investments in infrastructure, brand building and operating efficiencies gained through our restructuring efforts continue to generate strong revenue growth and margin expansion in our international business. The Asia Pacific region represents a substantial growth opportunity for Monster, particularly China. As we develop plans for the greater China market, as well as Southeast Asia, we are equally excited about the opportunities that exist in neighboring markets.
During the past year, we increased our global footprint by expanding Monster's presence in smaller markets through low-cost launches. In 2008, we plan to continue to further develop these smaller markets, particularly in Eastern Europe.
We are also committed to entering adjacent markets. Our recent acquisition in January 2008 of Affinity Labs Inc. ("Affinity Labs") provides an opportunity to provide highly relevant content to our seekers through a portfolio of professional and vocational communities. It will also provide employers access to a large, "hard-to-reach" pool of job candidates and allow us to expand our core product more aggressively.
We have re-organized our marketing function and are gaining greater efficiencies in both purchasing and placing media through a more centralized media buying program. Our new marketing approach is designed to evolve the brand from job transaction focused to a life improvement company by enhancing our seekers' experience and making Monster a trusted partner in their career/life decisions. Our mission is to inspire people to improve their lives.
We operate in three business segments: Careers â€“ North America, Careers â€“ International and Internet Advertising & Fees. For the year ended December 31, 2007, these operating segments represented approximately 52%, 36% and 12% of our consolidated revenue, respectively. During the year ended December 31, 2006, we disposed of our global Advertising & Communications business to focus our resources on building the Monster franchise and expanding the content of our online businesses. See Note 16 to the consolidated financial statements for further discussion of our segment results.
Careers (North America and International)
Monster is the premier global online employment solution for more than a decade, striving to inspire people to improve their lives. Monster has a presence in approximately 40 countries around the world. With a local presence in key markets in North America, Europe and Asia, Monster works by connecting employers with quality job seekers at all levels and by providing personalized career advice to consumers globally. We have been able to build on Monster's brand and create worldwide awareness by offering online recruiting solutions that we believe are redefining the way employers and job seekers connect. For 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 improve their careers by providing work-related content, services and advice to enhance the consumer experience.
Our services and solutions include searchable job postings, a resume database, and other career related content. Job seekers can search our job postings and post their resumes free-of-charge on each of our websites. Monster also offers premium career services at a fee to job seekers, such as resume writing and priority resume listing. Employers and human resources professionals pay to post jobs, search our resume database, and utilize career site hosting and other ancillary services.
Monster targets the enterprise market, or those businesses that we consider to be among the 1,500 largest organizations globally. Additionally, we also concentrate our efforts on expanding our reach to include small-to-medium sized businesses ("SMBs"), those businesses with approximately 10 to 2,000 employees that operate primarily in local and regional markets. We currently have alliances with media and publishing companies that extend our presence with local and regional job seekers in various markets across the United States.
Internet Advertising & Fees
Our Internet Advertising & Fees segment provides consumers with content, services and useful offerings that help them manage the development and direction of their current and future careers, while providing employers, educators and marketers with innovative and targeted media-driven solutions to impact these consumers at critical moments in their lives. Our network of online properties appeals to advertisers and other third parties as these sites cost-effectively deliver certain discrete demographic groups in a relevant and engaging online environment. We believe that by strengthening our user engagement, driving additional traffic and increasing usage of our websites, we can increase the appeal to our customers and reward them with a higher return on their marketing investment. Our sites are constantly evolving to integrate new and innovative features, in order to provide the relevant content that connects with our users. The majority of our services are free to users and are currently offered in North America.
Revenue for the Internet Advertising & Fees segment is derived primarily from three types of services: lead generation, display advertising and products sold to consumers for a fee. Lead generation is a highly scalable direct response business in which marketers pay for connections to consumers whose demographics and interests match the requirements of specific business offerings. Our large database of users and ongoing collection of numerous points of data allows us to provide our clients with targeted and valuable leads. Display advertising opportunities have been integrated across the Monster Worldwide network of websites, allowing marketers to deliver targeted online advertising messages via numerous sizes and formats of creative units. Consumers come to Monster's websites for information and advice on how to manage critical life transitions, and this environment is typically seen by marketers as desirable for promotion of products and services as consumers are actively looking for new ideas and solutions. Premium content and services comprise the final source of revenue for the Internet Advertising & Fees segment, as consumers pay for access to information and tools that provide greater support in the development of their educational and career opportunities.
Our largest customer categories are employers, schools, financial services and consumer products and services. Employers use our media solutions to attract job seekers to job postings and to help job seekers better understand what it is like to work for a particular employer. Schools find our advertising and lead generation services to be effective tools in attracting new students to investigate enrollment in higher education programs. Numerous companies in the financial services sector continue to find success promoting their products to consumers who are looking for help in managing the cost of their education and in establishing a strong financial base for their careers. Marketers of a variety of consumer products and services, including automotive, telecommunications, apparel and entertainment have come to us to provide cost-effective and highly targeted solutions to connect with specific consumer segments.
Sales and Marketing
We maintain separate sales and marketing staffs for our Careers and Internet Advertising & Fees businesses. The sales force for our Careers business consists of Telesales and Field sales and is complemented by a self-service online sales channel which we refer to as "eCommerce." Within these groups are specialty units dedicated to serving our vertical markets, such as enterprise, small-to-medium sized businesses, government, healthcare and staffing. Our Telesales staff is primarily responsible for telemarketing and customer service for small-to-medium sized clients and is located in our offices around the world. Our Field sales staff focuses on both local and national clients and is also dispersed throughout our offices globally. Our eCommerce channel is available to all customer groups and is most heavily used by smaller employers today. Our Internet Advertising & Fees sales force is located throughout the United States and is focused on cross-selling the products of each property within its network.
We use sponsorships and broad-based media, such as broadcast television, the Internet, radio, and business, consumer and trade publications, to market and promote the Monster brand. The majority of our marketing and promotion expense is allocated to our Careers â€“ North America and Careers â€“ International segments.
Our customers are comprised of individuals, small and medium-sized organizations, enterprise organizations, federal, state and local government agencies and educational institutions. No one client accounts for more than 5% of our total annual revenue.
The markets for our services and products are highly competitive and are characterized by pressure to win new customers, expand the market for our services and to incorporate new capabilities and technologies. We face competition from a number of sources. These sources include other employment-related websites, traditional media companies (primarily newspaper publishers), Internet portals, search engines and social networking websites. Many traditional media companies and newspaper publishers offer new media capabilities such as online recruitment websites. The barriers to entry into Internet businesses like ours are relatively low such that new competitors continuously arise. For example, over the past several years many niche career websites have been launched targeted at specific industry verticals. Many of our competitors or potential competitors have long operating histories, and some have greater financial, management, technological, development, sales, marketing and other resources than we do. In addition, our ability to maintain our existing clients and generate new clients depends to a significant degree on the quality of our services, pricing and reputation among our clients and potential clients.
Our success and ability to compete are dependent in part on the protection of our domain names, trademarks, trade names, service marks, patent and other proprietary rights. We rely on copyright laws to protect the original website content that we develop. In addition, we rely on Federal and state trademark laws to provide additional protection for the identifying marks appearing on our Internet sites. A degree of uncertainty exists concerning the application and enforcement of copyright and trade dress laws to the Internet, and there can be no assurance that existing laws will provide adequate protection for our original content or the appearance of our Internet sites. In addition, because copyright laws do not prohibit independent development of similar content, there can be no assurance that copyright laws will provide any competitive advantage to us.
We also assert common law protection on certain names and marks that we have used in connection with our business activities.
We rely on trade secret and copyright laws to protect the proprietary technologies that we have developed to manage and improve our Internet sites and advertising services, but there can be no assurance that such laws will provide sufficient protection to us, that others will not develop technologies that are similar or superior to ours, or that third parties will not copy or otherwise obtain and use our technologies without authorization. We have obtained patents and applied for several other patents with respect to certain of our software systems, methods and related technologies, but there can be no assurance that any pending applications will be granted or that any patents will not in the future be challenged, invalidated or circumvented, or that the rights granted thereunder will provide us with a competitive advantage. In addition, we rely on certain technology licensed from third parties, and may be required to license additional technology in the future, for use in managing our Internet sites and providing related services to users and advertising customers. Our ability to generate fees from Internet commerce may also depend on data encryption and authentication technologies that we may be required to license from third parties. There can be no assurance that these third-party technology licenses will be available or will continue to be available to us on acceptable commercial terms or at all. The inability to enter into and maintain any of these technology licenses could significantly harm our business, financial condition and operating results.
Policing unauthorized use of our proprietary technology and other intellectual property rights could entail significant expense and could be difficult or impossible, particularly given the global nature of the Internet and the fact that the laws of other countries may afford us little or no effective protection of our intellectual property. In addition, there can be no assurance that third parties will not bring claims of patent, copyright or trademark infringement against us. We anticipate an increase in patent infringement claims involving Internet-related technologies as the number of products and competitors in this market grows and as related patents are issued. Further, there can be no assurance that third parties will not claim that we have misappropriated their trade secrets, creative ideas or formats or otherwise infringed their proprietary rights in connection with our Internet content or technology. Any claims of infringement, with or without merit, could be time consuming to defend, result in costly litigation, divert management attention, and require us to enter into costly royalty or licensing arrangements or prevent us from using important technologies or methods, any of which could significantly harm our business, financial condition and operating results.
At February 1, 2008, we employed approximately 5,210 people worldwide. Generally, our employees are not represented by a labor union or collective bargaining agreements except that our employees located in France, Italy and Spain are covered by collective bargaining agreements that are generally prescribed by local labor law. We regard the relationships with our employees as satisfactory.
Salvatore Iannuzzi has been Chairman of the Board, President and Chief Executive Officer of the Company since April 2007. Prior to joining the Company, Mr. Iannuzzi served as President of Motorola, Inc.'s Enterprise Mobility business from January 2007 to April 2007. Prior to that, Mr. Iannuzzi served as President and Chief Executive Officer of Symbol Technologies, Inc., a publicly traded company engaged in the business of manufacturing and servicing products and systems used in end-to-end enterprise mobility solutions, from January 2006 to January 2007, when Symbol Technologies was sold to Motorola. He previously served as Symbol Technologies' Interim President and Chief Executive Officer and Chief Financial Officer from August 2005 to January 2006 and as Senior Vice President, Chief Administrative and Control Officer from April 2005 to August 2005. He also served as a director of Symbol Technologies from December 2003 to January 2007, serving as the Non-Executive Chairman of the Board from December 2003 to April 2005. From August 2004 to April 2005, Mr. Iannuzzi was a partner in Saguenay Capital, a boutique investment firm. Prior thereto, from April 2000 to August 2004, Mr. Iannuzzi served as Chief Administrative Officer of CIBC World Markets. From 1982 to 2000, he held several senior positions at Bankers Trust Company/Deutsche Bank, including Senior Control Officer and Head of Corporate Compliance.
Timothy T. Yates has been Executive Vice President and Chief Financial Officer of the Company since June 2007. Prior to joining the Company, Mr. Yates served as Senior Vice President, Chief Financial Officer and a director of Symbol Technologies, Inc. from February 2006 to January 2007. From January 2007 to June 2007, he was a Senior Vice President of Motorola, Inc.'s Enterprise Mobility business responsible for Motorola's integration of Symbol Technologies. From August 2005 to February 2006, Mr. Yates served as an independent consultant to Symbol Technologies. Prior to this, from October 2002 to November 2005, Mr. Yates served as a partner and Chief Financial Officer of Saguenay Capital, a boutique investment firm. Prior to that, he served as a founding partner of Cove Harbor Partners, a private investment and consulting firm, which he helped establish in 1996. From 1971 through 1995, Mr. Yates held a number of senior leadership roles at Bankers Trust New York Corporation, including serving as Chief Financial and Administrative Officer from 1990 through 1995.
Darko Dejanovic has been Executive Vice President, Global Chief Information Officer and Head of Product since November 2007. Previously, he had served as Executive Vice President and Global Chief Information Officer since July 2007, and as Senior Vice President and Global Chief information Officer since April 2007. Prior to joining the Company, Mr. Dejanovic served as Senior Vice President and Chief Technology Officer for Tribune Company, a publicly traded media company, from December 2004 until March 2007. During that same period, Mr. Dejanovic also served as Vice President and Chief Technology Officer of Tribune Publishing Company, a subsidiary of the Tribune Company, a position he held since 2002. Before joining the Tribune Company, Mr. Dejanovic had technology leadership roles for the Education Management Group, a provider of post-secondary education, and for the European Community Monitor Mission, an international public policy organization.
Mark Stoever has been Executive Vice President, Internet Advertising & Fees since July 2007. Previously, he had served as Senior Vice President, Internet Advertising & Fees since July 2005. Prior to joining the Company, Mr. Stoever served as Executive Vice President of Decision Matrix Group, an investment fund specializing in technology market research, from January 2005 to May 2005. Prior to that, beginning in 1996 he held various management roles at Lycos, Inc., a global Internet content and service provider, most recently as President and Chief Executive Officer from October 2002 to November 2004. Prior to Lycos, Mr. Stoever held management roles at ON Technology Corporation, a software company, from 1994 to 1996, and at Microcom, Inc., a modem technology company, from 1989 to 1994.
Jonathan Trumbull has been Global Controller and Chief Accounting Officer since March 2005. Previously, he had served as Vice President and Corporate Controller since October 2002. Prior to joining the Company, from 1989 to October 2002, Mr. Trumbull was associated with Ernst & Young, LLP, most recently as Senior Manager from 1997 to October 2002.
MANAGEMENT DISCUSSION FROM LATEST 10K
Monster Worldwide is the premier global online employment 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 we believe are redefining 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, 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, search the resume database and access other career related services.
Our strategy has been to grow our business both organically and through strategic acquisitions and alliances where the perceived growth prospects fit our plan. We believe the growth opportunities overseas are particularly large and believe that we are positioned to benefit from our expanded reach and increased brand recognition around the world. Our Careers â€“ International segment is now 36.1% of our consolidated revenue for the year ended December 31, 2007, and increased 59.3% over the comparable 2006 period. We are positioned to benefit from the continued secular shift towards online recruiting. In addition, through a balanced mix of investment, strategic acquisitions and disciplined operating focus and execution, we believe we can take advantage of this online migration to significantly grow our Careers â€“ International 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 web 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.
Monster Worldwide has three operating segments: Careers â€“ North America, Careers â€“ International and Internet Advertising & Fees. In 2007, we had strong revenue growth of 21% over the 2006 period, driven by a 59.3% increase in our Careers â€“ International revenue. Our income from continuing operations and diluted earnings per share from continuing operations decreased 4.2% and 3.4% respectively, over the 2006 period due primarily to expenses from our restructuring plan of $16.6 million, severance related to the departure of three former executive officers of $15.8 million and the expenses from the security breach that occurred in August 2007 of $9.0 million. These costs were offset by improved operating efficiencies and savings from our restructuring plan, as well as strong international revenue growth. Our cash and available for sale securities balance decreased to $578.4 million as of December 31, 2007, compared to $596.6 million as of December 31, 2006, as a result of $262.5 million of share repurchases, repayment of acquisition debt of $23.4 million and our commitments to strengthen our infrastructure, invest in key talent and fund projects intended to position us for long-term growth, offset by strong operating cash flows of $269.2 million and cash received from the exercise of employee stock options of $54.9 million.
Careers â€“ North America delivered a 31.8% operating margin on $707.4 million of revenue in 2007, as our Enterprise channel successfully grew the client base and leveraged our existing clients. We are particularly encouraged by the performance of our Careers â€“ International segment as the business generated a 10.7% operating margin, despite increased investments in sales and marketing, compared to 5.7% operating margin in 2006. Revenue in our Careers â€“ International business is now 36.1% of our consolidated revenue, compared to 27.4% in 2006. Our Internet Advertising & Fees segment grew revenue 2.3% over 2006, and experienced decelerating revenue trends throughout 2007, particularly in the second half of the year. This was primarily due to the decision to reduce the placement of certain interstitial advertisements on the Monster.com site and reevaluate our overall ad placement strategy.
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 is designed to reduce our current workforce by approximately 800 associates, or 15% of our full-time staff, through 2008. Through December 31, 2007, we have notified or terminated approximately 360 associates and approximately 100 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 current levels.
During the years ended December 31, 2006 and 2005, we disposed of the following businesses that collectively comprised the entire Advertising & Communications operating segment and the remaining businesses in our Directional Marketing operating segment. We executed these transactions in order to focus more resources to support the growth of the Monster franchise on a global basis. The results of operations of these businesses and the associated disposal costs are reflected as discontinued operations in the consolidated statements of operations for all periods presented:
On August 31, 2006, we sold our TMP Worldwide Advertising & Communications business in the United States and Canada. The Company received cash of $36.2 million (net of working capital and other adjustments). The Company recorded a pre-tax loss on the sale of the business of $125.0 million ($123.1 million after-tax loss, net of a $1.9 million tax benefit) in the third quarter of 2006. Included in the pre-tax loss is approximately $133.0 million of remaining goodwill and other intangible assets associated with the Advertising & Communications operating segment. This disposition was considered material and included a significant amount of assets, primarily due to the amount of goodwill on the balance sheet as of August 31, 2006.
On May 10, 2006, we sold our TMP Worldwide Advertising & Communications businesses in the United Kingdom and Ireland. In a separate transaction, the Company also sold its recruitment advertising agency in Spain. The Company received cash of $32.9 million (net of working capital and other adjustments) and approximately a $9.0 million interest bearing note receivable maturing on May 10, 2013. The Company recorded a pre-tax gain on the sale of these businesses of $543,000 ($812,000 after-tax loss, net of a $1.4 million tax expense) in the second quarter of 2006, included as a component of discontinued operations in the statements of operations. The disposition was not considered material and did not include a significant amount of assets.
On March 1, 2006, we sold our TMP Worldwide Advertising & Communications businesses in Australia/New Zealand and Singapore in two separate transactions. The Company recognized a pre-tax gain on the sale of these businesses of $2.5 million ($5.4 million including the tax benefit recognized upon disposition) in the first quarter of 2006. The disposition was not considered material and did not include a significant amount of assets.
On June 1, 2005, we sold substantially all of our Directional Marketing division for net cash consideration of $49.6 million ($80.0 million purchase price less working capital and other adjustments and $2.5 million of cash placed in escrow for an 18 month period following the disposition date) and a $7.0 million, 3% promissory note due to the Company after seven years. The sale included the Company's Yellow Pages business in North America and Japan along with its online relocation business. The Company recognized a pre-tax loss on sale of these businesses of $10.7 million ($1.8 million net of tax benefits) in the second quarter of 2005. In the third quarter of 2005, the Company returned cash consideration of $657,000 upon final determination of working capital sold in connection with the disposition. In the fourth quarter of 2006, the Company received the cash previously placed in escrow of approximately $2.7 million and approximately $7.3 million related to the promissory note as an early repayment in full. The sale of the Directional Marketing business did not include the Company's Directional Marketing operations in the United Kingdom. The Company's European Advertising & Communications management continued to operate that business, and accordingly, those results were reclassified to our Advertising & Communications operating segment.
On May 2, 2005, we sold our TMP Direct business unit, an order fulfillment business, formerly part of our Directional Marketing segment. The business was purchased by Gecko Inc., an entity owned 65% by George Eisele, a director of Monster Worldwide, for $2.5 million cash paid at closing plus an amount equal to 50% of TMP Direct's working capital as of the closing date payable on May 2, 2006. George Eisele and another individual shareholder of Gecko Inc. personally guaranteed the May 2, 2006 payment obligation of Gecko Inc. We received $500,000 in the second quarter of 2006 in connection with this obligation. The sale was not considered material and did not include a significant amount of assets. We recognized a pre-tax and after tax loss on sale of this business of $551,000 in the second quarter of 2005.
Included in the loss from discontinued operations, net of tax calculation in 2005 is the impact of the stock option adjustments discussed in Note 8 to the consolidated financial statements. We recorded $636,000 of non-cash stock based compensation costs in the year ended December 31, 2005 as a component of discontinued operations, which directly relate to stock options that were awarded to individuals who were employed by the businesses discussed above that were disposed. In addition, the income (loss) from discontinued operations, net of tax includes a loss of $323,000 and income of $906,000, related to dispositions that occurred in the year immediately preceding each of the years ended December 31, 2006 and 2005, respectively. The provision for income taxes reported in discontinued operations for the years ended December 31, 2006 and 2005 differs from the tax benefit computed at our Federal statutory income tax rate primarily as a result of non-deductible goodwill and other expenses, and change in valuation allowances on losses.
RESULTS OF OPERATIONS
The Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
Careers â€“ North America
Our Careers â€“ North America segment grew revenue 7.5% in 2007 representing 52.3% of our consolidated revenue, down from 58.9% of total revenue in 2006. Sluggish economic trends within the labor markets across the United States contributed to moderating revenue growth throughout 2007. We also experienced decreasing demand across our small-to-medium sized customer base whose pace of hiring slowed as a result of the overall macro-economic environment. Our global enterprise accounts continued to perform well in 2007, reflecting the global nature of our business and the breath of our product lines. We continue to benefit from a secular shift from print to online advertising, and we believe that we continue to maintain market share within the recruitment advertising industry.
The Careers â€“ North America segment generated an operating margin of 31.8% in 2007 down from 34.5% reported in 2006. Total operating expense grew 12.0% compared to revenue growth of 7.5%. Total operating expenses included $11.5 million related to the security breach and restructuring plan. We have made substantial progress to slow our expense growth rate through our restructuring efforts in the third and fourth quarters. We reduced our workforce by approximately 12% during 2007, primarily related to non-sales force employees and we continue to monitor our revenue per employee. The operating expense growth rate has slowed even as we have continued to make investments in marketing, technology and product innovation.
We plan to continue to invest in our infrastructure and new product innovation in 2008 in order to improve the customer experience and drive incremental revenue growth. We are also continuing our work to slow the growth rate of our operating expenses while increasing our spending in market facing initiatives and innovation. We believe that our primary opportunity for future growth in North America is at the regional and local market level and we therefore continue to monitor our pricing structure in the local and regional markets in order to achieve a competitive advantage. While we remain committed to investing for long-term growth, we will closely monitor the operating expense base in line with our revenue expectations.
Our Careers â€“ International segment demonstrated significant revenue growth of 59.3% in 2007, mainly driven by investments in key European and Asian countries, coupled with increased production from a growing sales force and a 10.1% favorable effect from foreign exchange rates. We continued to see strong revenue gains in our top European countries, particularly the United Kingdom, France, Germany and the Netherlands, which contributed approximately 66.3% of total Careers â€“ International revenue. Outside these four countries, our smaller markets also posted solid revenue growth. In Asia, we saw strong year-over-year increases in all countries where we operate, and we believe that our strategy to capture market share while aggressively investing in the business will position Monster firmly in the region for significant future revenue growth.
Our considerable investments in marketing and sales in the major countries across Continental Europe and Asia are paying off, evidenced by the segment's organic revenue growth rate of 48.5%, excluding the effects of currency exchange rates and the results of businesses acquired within the last year. We continue to benefit from the secular shift from print to online media.
We aggressively increased our investments overseas through a refined mix of marketing, sales and product enhancements. Marketing expenses increased approximately 32% over the 2006 period as we invested to increase our brand awareness, drive job seeker traffic to our websites and expand our reach, both to the job seeker and to the employer. Those investments, combined with the addition of sales and support staff during the first half of 2007, have helped us achieve a significant portion of our overall revenue growth and gain market share in key European and Asian countries. We are committed to growing our business overseas, while still mindful of profitability and the cost structure. In 2007, the segment increased total operating expenses by 50.9%, including a 9.5% impact from foreign exchange rates, while expanding its operating margin to 10.7%. Although our headcount increased by approximately 400 associates in 2007, the overall expense growth rate slowed in the second half of the year due to our restructuring initiatives.
Our Internet Advertising & Fees segment posted revenue growth of 2.3% in 2007 when compared to 2006. This was a significantly slower growth rate than throughout 2006 and resulted from decelerating revenue trends throughout 2007. The second half of 2007 was particularly impacted by our decision to reduce the placement of certain interstitial advertisements on the Monster.com website and a reevaluation of our relationship with certain clients engaged in student loan advertising. Although the decision to reduce placements had the effect of reducing revenue in the second half of 2007, and will continue into the first half of 2008, we believe it was the appropriate action to take to improve the quality of the job seeker experience on the Monster.com site. We continue to believe that online advertising represents a significant growth opportunity for us, as our audience is appealing to both brand and remnant advertisers. We posted an operating margin of 7.8% for 2007, a sharp decline from the 29.6% operating margin reported in the same period in 2006 as our expense base grew at a faster rate than our revenue. The expenses increased in 2007 for almost all expense categories, especially compensation and related expenses. We invested in our business model by adding sales capacity, increasing product and technology expenditures and initiating infrastructure build-outs during the first half of the year. Marketing expenses increased 15.9% over the 2006 period as we invested in our websites and expanded their recognition among users. We believe that the fourth quarter 2007 results represent a reasonable base from which to expand the business, subject to market conditions.
Consolidated Operating Expenses and Operating Income
Our consolidated operating expenses grew 28.2% in 2007 compared to 2006. In the second half of 2007, we incurred restructuring and other special charges of $16.6 million related to the strategic restructuring initiatives that we announced on July 30, 2007. We have increased our global headcount
by approximately 6% over the 2006 period, primarily for sales and support in our Careers segments. As a result, we incurred higher salary, benefits and commission costs. Included in salaries and related is approximately $15.8 million of severance related to the departure of three former executive officers in the second quarter of 2007. Of that amount, approximately $12.8 million is non-cash and relates to the accelerated vesting of equity awards. Office and general expenses increased 37.6% as a direct result of investments in our infrastructure, additional headcount and technology costs. Included within the office and general expenses is approximately $19.1 million of professional fees related to the ongoing stock option investigation and $9.0 million for the remediation of the August 2007 security breach of our resume database. We also increased marketing and promotion expenditures by $39.6 million as a result of increasing promotional activities particularly in the fourth quarter, in anticipation of the brand re-launch in January 2008.
MANAGEMENT DISCUSSION FOR LATEST QUARTER
Monster Worldwide is the premier global online â€ścareersâ€ť 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 Monsterâ€™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 â€” 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.
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.
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 Tickleâ€™s non-core offerings, which no longer fit our long-term strategic growth plans and Tickleâ€™s lack of profitability. Tickleâ€™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 Tickleâ€™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:
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 Companyâ€™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 Companyâ€™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:
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:
Thank you for joining us on Monster Worldwide's third quarter 2008 conference call. Our format calls for us to have formal remarks from Sal Ianuzzi, Chairman and Chief Executive Officer and Tim Yates, Executive Vice President and Chief Financial Officer. Joining us for the question and answer part of the call are the following members of our executive management team; Darko Dejanovic, Global CIO and Head of Product, Arnold Donald, Customer Service, Mark Stoever, Corporate Development and Strategic Alliances and James Langrock, Senior Vice President of Finance and Chief Accounting Officer.
Before we begin, the statements made during this conference call constitute forward-looking statements under applicable securities laws. Such forward-looking statement involve certain risks and uncertainties including statements made regarding the company's strategic direction, prospect and future results and do not include the effect of the events or outcome of the ongoing investigations or litigations related to the company's historical stock option grant practices or costs associated with the restructuring and the security breach.
Certain factor 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 acquisition and disposition, competition, seasonality and the other risks discussed in our Form 10-K and our filings made with the Securities and Exchange Commission.
With that I'd like to turn the call over to Sal for his comments.
Good afternoon everyone and welcome to our third quarter earnings conference call. On today's call I will briefly discuss the current macro conditions as well as the progress we've made this past quarter and our areas of focus in the coming months. Tim Yates, our CFO will then discuss the third quarter financial results in detail.
One note before we get started. As many of you know, we'll be holding an Investor and Analyst meeting on November 13 at the Kennedy Presidential Library Museum in Boston. You can follow up with Bob Jones to get the details.
I don't have to tell this audience what a terrible quarter this has been for the financial markets around the world. Suffice it to say there is no doubt that the whole economy has slowed down significantly and it's impacting all businesses. Monster is no exception. Nobody is certain how long and deep the slowdown will be and that holds true for us as well.
What also holds true is we are doing everything we can both tactically and strategically to maintain a reasonable return for our shareholders without sacrificing the future growth of the company. Put another way, we will not make fundamental shifts in our strategy based on one or two quarters of results. We will consider adjusting our strategy if it appears that the slow down will be more prolonged.
However, keep in mind that markets like these also present unprecedented opportunities and we will aggressively seek them out. As many of you are aware, we have embarked on aggressively structuring a reorganization of the company to make it more cost effective and responsive to employer and seeker needs.
Simply stated, the company was in need of fundamental improvement and we've made great progress to that end. You've heard me elaborate on this in the past so I won't go into great detail except to time line the most important changes.
We've realigned the company by global functions which has allowed us to save well over $100 million in operating expenses. We've embarked on the biggest product investment and rebranding initiative in the company's history, one that will be fully completed by the first half of 2009. We've expanded our sales coverage in the U.S. with the addition of 130 field sales personnel to date.
We've taken significant steps to enhance customer service by investing in new facilities in Florence, South Carolina, and Bruno, Czech Republic. We added depth and experience to the Board including the most recent appointment of Roberto Tunioli, and we settled a class action shareholder lawsuit regarding options back dating.
Nobody can predict the longevity and severity of the current economic slow down. We are focused on continuing to reduce costs, maximizing every dollar spent without jeopardizing the investment that we're making for future growth. We've demonstrated in the past that we know how to make our dollars work harder and smarter and we will continue to do so. In fact, our current spend level is comparable to that of 18 months ago and that's with the initiative that I mentioned earlier.
To further elaborate on this point, the first nine months of the year, the company has generated $241 million of cash flow from operations. This has allowed the company to enjoy a cash balance as of September 30 of $486 million net of debt. During this period, we've also made $331 million of investments including Trovix Affinity Labs, our stock repurchase and capital expenditures which improve the safety, security and efficiency of our technical infrastructure as well as improve and expand our products and services for both employers and seekers.
As you can see, we've made strategic investments to strengthen the company while preserving our strong cash position. As a result, in the third quarter the company delivered non-GAAP earnings per share of $0.40 and an operating margin of 21% and all the while, this occurred during a slow down of the economy with deep investments being made across the company.
What this means is that Monster continues to have a strong liquid balance sheet to support our growth plans, and our healthy cash flow has provided the capital to pursue these and future strategic initiatives.
At the end of the day, success for Monster is all about finding new employers and seekers and growing market share. With that goal in mind, we've put the majority of our resources doing just that, by improving our products and services, investing in new technology, identifying new markets, and strengthening our sales force.
I've said it before, but we'll say it again. We will leave no stone unturned when it comes to improving our offering and growing and winning market share from our competitors. This is absolutely our primary focus. We believe this growth will come in a myriad of ways including moving into high growth, vertical markets, developing new distribution channels, creating new product that satisfies customer needs and driving customer demand.
We're aggressively seeking out growth, opportunity in all these areas, and have some successes to report back on. This quarter we acquired the remaining 55% of ChinaHR giving us an unrivalled platform in the world's fastest growing economy. Being a global leader requires having a leading position in China and the favorable purchase price goes a long way in funding future investments in China over the next few years. We believe that our position in China gives us a significant advantage over the competition.
We're in the process of completely overhauling customer and seeker experience on Monster.com. Our new employer and seeker sites will represent the largest product and service re-launch in the company's history. We've already started the largest re-launch of employer products which will culminate in over 90% of the platform being changed.
These changes will provide employers with more tools and options to find the most qualified employee, and we are already incorporating key elements of the [torvecs] small search technology into the new platform which will give employers an unparallel level of search and match between employee job requirements and candidate skills. The search will change from a simple key word search to a contextual search that takes into consideration skill, years of experience, education and other relative career attributes.
Starting in the U.S. in January and continuing in Europe through Q1, we will re-launch an entirely new job seeker site experience including new functionality that will be unique and unrivalled in the industry. Almost 100% of Monster's seeker platform is being rebuilt. You will hear much more about the new seeker products in the weeks to come.
We also announce a unique partnership with Comcast, the nation's largest cable provider to be exclusive job partner for their signature on demand service. Beginning on November 1, Comcast's 14 million digital cable customers will have access to customer's employment resources through the touch of a remote control. We believe there is significant potential to expand our market share through this deal and we continue to look for these types of exclusive partnerships that allow us to reach job seekers in new and creative ways.
Our renewed stock flows has begun to get traction in the market. We have and continue to introduce new methodologies in our income model both to our product post and other enhanced offerings. This will make it even easier for mid and small sized companies which are responsible for 70% of new job creation to do the business with us.
We are aggressively pursuing all channels that can bring us revenue in the short term including further leveraging of our agency and newspaper relationships. As you can see, we've not taken a bunker mentality when it comes to this slowing economy. Quite the opposite.
We're making choices that will allow us to grow market share and aggressively pursue short term revenue even in this tough environment while positioning the company for robust, long term growth when the economy eventually picks up again. We believe this is the correct approach and one that will yield both short term and long term benefits.
The senior management team of the company fully believes in our strategy and the current share price does not fairly reflect the value of the company. To demonstrate our belief, we are announcing today three programs that will increase senior management commitment and alignment to our shareholders.
First, I will be purchasing $1 million of Monster shares and Tim Yates; our CFO will be purchasing $500,000 of Monster shares in the coming days. Second, the executive management team will take a 2008 short term incentive compensation in shares instead of cash. And third, the compensation committee of the Board of Directors has approved a special incentive equity program for senior executives which is 100% performance based.
Lastly, today we announced that Monster Worldwide has filed an application to list its common stock on the New York Stock Exchange. We expect to begin trading on this exchange on November 10 under the symbol MWW. We believe the New York Stock Exchange is a prestigious platform for Monster, a platform that is committed to integrity in governance, innovation and global growth.
These are exciting times for Monster and our move to the New York Stock Exchange is consistent with the goals and strategies and values of the new Monster. I will now turn it over to Tim who will provide a more detailed look at our operating and financial performance in the third quarter.
First I will review our income statement, highlighting our non-GAAP results while providing the GAAP reconciliations. I'll then review the results within our operating segments, summarize the recently completed acquisition of ChinaHR and finish with a discussion of our balance sheet, cash flow and liquidity.
Consolidated revenue was $332 million in the third quarter, up slightly when compared with the prior year and was positively impacted by approximately $6 million of currency benefit. In last year's third quarter, currency contributed approximately $8 million.
On a non-GAAP basis operating expenses were $262 million in the third quarter, essentially flat with the prior year. On a sequential basis, operating expenses were down 5% or 3.5% before currency. During the quarter we took a number of actions.
First we continued to tighten our focus on all expenses, especially in the areas of consulting, T&E and temporary staff. Second, we allocated a greater percentage of our marketing dollars on-line in the third quarter, realizing increased traffic levels on a more efficient and lower spend. And lastly, we incurred lower commission and incentive compensation costs.
At the same time, we continued to invest and add resources in critical revenue generating areas. On a year over year basis, the currency impact on operating expenses was approximately $5 million. As a result, the non-GAAP operating margin was 21% in the third quarter, flat compared with last year's third quarter and down slightly sequentially.
Interest on other income was $5 million for the quarter, a 19% reduction over the prior year, mainly reflecting lower yields on a lower average quarterly cash balance, partially offset by currency transaction gains.
Our effective tax rate was 34% and the loss in equity interest was $2.1 million. Beginning in the fourth quarter, ChinaHR will be consolidated in Monster's results.
The diluted share count was $121 million, an 8% year over year decrease, reflecting repurchases of our common stock and a lower quarterly stock price.
Excluding the items we have highlighted, income from continuing operations was $48 million or $0.40 per diluted share compared with $46 million and $0.36 per diluted share in last year's third quarter.
Before discussing the segment results, I want to review the impact of certain adjustments recorded in the third quarter that reconcile our GAAP and non-GAAP results. They are, $3.9 million relating to the defense of a former officer's criminal prosecution which we were obliged to pay, and other associated costs related to the resolution of these matters, and, $3.6 million of restructuring and other special charges primarily related to severance costs.
Including these costs, the GAAP operating margin was 19% and income from continuing operations was $43 million or $0.36 per diluted share, a 38% increase over the prior year.
Our relatively strong earnings result with non-GAAP earnings up 11% and GAAP earnings up 38% in a difficult environment reflect the geographic diversity of our revenue base and our ability to control operating costs.
Turning to the results of operating segments, revenue from the combined careers segments was $298 million, flat when compared to the prior year. Consolidated non-GAAP careers operating margin for the third quarter was 26%, up 100 basis points over the prior year period, but down sequentially.
Our international business generated revenue of $142 million and grew 17% in the third quarter. This slower growth rate is a direct result of the global economic slow down across Europe and Asia. Excluding currency benefits, the business grew 13%. The non-GAAP international operating margin expanded to 22.8% in the third quarter of 2008 mainly due to lower expense levels.
Revenue declined 12% to $155 million in the third quarter as the weaker U.S. economy continued to reduce overall hiring demands. As a result, the non-GAAP operating margin was 28.3% in the third quarter, down sequentially and year over year. Our IAF business generated revenue of $35 million in the third quarter, a 4% increase over the prior year. We remain committed to and encouraged by the performance in our community sites and our global advertising business which are reported with IAF.
The non-GAAP operating margin was 14.4% in the third quarter, essentially flat with the second quarter and down from the 16.3% reported in the prior year.
We were very pleased to complete the acquisition of ChinaHR earlier this month, and believe that it represents a significant long term opportunity for Monster. We acquired the remaining 55% interest for $174 million, significantly below the consideration we originally anticipated. Monster's total investment in ChinaHR is $269 million and we now are 100% owner of the fastest growing on-line recruitment company in the world's largest population center, which boasts the largest internet user base.
Over the years, ChinaHR has been aggressively growing the business. Last year revenue grew significantly as internet penetration and work force formation continued to expand. We are very optimistic and excited about the long term potential of the China market. While we are confident in the long term prospects of this opportunity, the Chinese market and our business are now feeling the effects of the global slow down.
For the nine months ended 2008, ChinaHR lost $18.5 million, of which Monster recorded $8.3 million as a component of equity interests. As we have said in the past, we will be making investments in people, product, marketing and technology to fully capitalize on the potential of this market.
We believe that our strong cash generating capability even in this difficult environment, along with our liquid balance sheet provides the company with the flexibility to accomplish key internal objectives and pursue strategic opportunities. In the third quarter, Monster generated $92 million of cash flow from operating activities and spent $21 million on capital expenditures.
As a result, free cash flow was $71 million which allowed us to spend $42 million on stock repurchases acquiring 2.2 million in shares at an average price of $19.17. In addition, as you know, during the quarter we acquired Trovix for $72.5 million in cash. We ended the quarter with a deferred revenue balance of $412 million, reflecting the weakness in the market.
On a pro forma basis, EBITDA was $92 million in the quarter, resulting in a 28% EBITDA margin compared to 26% in the prior year.
During the quarter we made the decision to draw against our existing unsecured credit facility to provide us with financial flexibility. We have always viewed our revolving credit as an insurance policy and given the events in the market, we felt that it was appropriate to access that insurance during the quarter.
We ended the quarter therefore, with $733 in cash and securities and $486 million after subtracting the $247 million borrowed under the revolving credit agreement. Of course, those figures do not reflect the $174 million payment to acquire the remaining stake of ChinaHR which occurred in early October.
Our financial assets were deployed conservatively in the following areas; 51% in U.S. Treasury only money market funds, 18% in top sovereign debt obligations, 16% in bank deposits at Prime Money Center banks, 13% into auction rate bonds as we had previously discussed, and 2% in Municipal bonds.
Now let's talk about how we are managing through the fourth quarter in this very difficult global environment. It's no secret Monster is most closely associated with the global job market. Our primary source of revenue is recruitment and advertising. We are well aware of the weakness in the global job market and none of us knows the depth and length of this recession.
Also, as many of you know, the fourth quarter is historically a seasonally important one for the company as a large number of global clients, and particular the larger enterprise customers, renew their contracts during this quarter. So many of the key industry verticals which we serve, for example financial services, retail, manufacturing and construction, we are going against severe headwinds as we enter this important renewal season.
As Sal mentioned, we are doing everything we can to work with our clients to maintain our business and win an increasing share. Our global account base is extremely diverse. Monster serves customers in a wide variety of industries in over 50 countries around the world. Our customers range from small businesses to large multi-national enterprise customers.
Many of these clients are struggling and looking to cut their budgets. There are a number of important number of fundamental reasons why Monster is maintaining business and can increase market share. A couple of things to keep in mind. First, even if a client is cutting head count, they may still be hiring. They may be hiring in different geographic areas or different functional areas.
As a direct example, while Monster was reducing our staff by more than 700 associates over the past 18 months, we were also hiring around 1,000 new associates. Naturally, we were using Monster's recruiting resources. Many of our clients are doing the same thing.
Second, as our clients face pressure on their budget, it is important to remember that our model is still the most cost effective way to recruit. Placing more advertising and making full use of Monster's capability can be an effective budgetary trade off for our clients.
Finally, we have been steadily improving the quality of our product and we have been introducing new capabilities. While still early, we are finding that our Career Ad Network product or CAN is gaining traction during this renewal season. CAN is a product designed to proactively find and engage the path for seekers on behalf of our clients across a network of web sites.
Perhaps a quick example will help to illustrate the points we're making here. One of our global clients is a diversified financial services company. The company offers a broad array of credit, savings and loans products including mortgages and is directly impacted by the turbulence in the financial markets.
Through active engagement with the client, we were able to renew their annual contract at 95% of last year's level in September right in the midst of this crisis even though the client was reducing its recruiting needs, we were able to add CAN, increase the client's ROI and increase our share of their business.
So we're working hard with our clients to satisfy their ongoing recruitment needs while improving their productivity. We believe we will be strongly position when the markets begin to improve. But in the short run, revenue and sales will remain challenged.
On the cost side of the equation, Sal has noted that we are constantly managing our expenses in light of what we see on the revenue side. The results of our restructuring plan and our decisive action in the face of the currently weak economic environment, we have been able to flatten out and then reduce our operating expenses which were $14 million lower in Q3 than in Q2.
Since we took preemptive action early, and benefited from Q3 from those actions on the expense line, based on what we currently see on the revenue line, we do not believe that it would be advisable to extrapolate off the reduction in operating expenses which we produced in Q3. Based on current visibility we believe that operating expenses will be down during the fourth quarter, but not at the same rate as Q3 versus Q2. This is before we factor in the consolidation of ChinaHR.
Rest assured that we will continue to monitor revenue and as Sal has mentioned, we do have the ability to further reduce operating expense if events warrant. I will now hand the call back to Sal for his closing remarks.
My comments have been very brief today, but I want to be sure I'm clear. We are very confident in the company's long term potential. We are seeking out every opportunity to increase revenue and market share. We weight carefully every dollar we spend. We are making sure that every dollar spent brings us the best return possible.
We will continue to invest for the future. We will continue to modify our short and long term strategy as the severe economic instability the world faces continues to evolve. Our goal is simply to deliver the best value to our customers bar none, which in turn will allow to significantly increase shareholder value.
I want to take this opportunity to thank our customers and partners for their continued support. I would also like to thank our associates for their enthusiasm and absolute dedication to moving Monster forward. They have our promise that we will do everything in our power to navigate through this difficult economy and I would like to thank our shareholders for their ongoing support and interest in Monster. Thank you very much.