The weaker U.S. economy is impacting overall hiring demand.
- Customers are being more deliberate with their recruitment decision.
- Customer demand in the credit, financial services, and housing markets slowed during the quarter, reflecting the weakness in these industries.
- The company did experience growth, however, in its government and staffing verticals, as well as in its newspaper partnerships and Canadian business.
Tickle has negatively impacted operating income and margins.
- Monster will reclassify Tickle results as discontinued operations effective in the second quarter of 2008.
- The company expects to incur expenses in discontinued operations related to severance, fixed and intangible asset write-offs, and other costs associated with the wind-down, which will be $16 million in total.
- Tickle recorded an operating loss of $2 million on $3.9 million of revenue.
The new ""go to market"" approach will enable the firm to better align sales teams against the opportunity that offers the highest return on investment.
- This sales force redirection will allow for more productive and deeper customer relationships while broadening the sales coverage and market penetration.
- This action will help fuel the firm through the current economic downturn and position it well for an economic rebound.
Key questions and answers from the first quarter fiscal 2008 earnings call conducted by Monster Worldwide on May 1, 2008
Comment on the trends in the U.S. careers business?
In North America there has been a consistent pattern, for example in financial services where it’s been sluggish. We have seen a little bit of some holdback, some consternation regarding the economy.
We had not seen that in Europe for the most part, except in the sector where subsidiaries of U.S. companies are operating in Europe. Some of that sluggishness or slowdown or caution is being offset by an array of new products that have been introduced. The marketing campaign or the rebranding has had a degree of benefit.
What is the evidence to date that the branding campaign has been successful?
If you back out the incremental level of marketing, we would be flat to the operating expense excluding that level of incremental marketing, so that would imply an increase in operating margin.
Our operating margin in Europe is somewhere around 8%, roughly 8%. The rebranding cost us approximately $31 million. That is not a cost we intend to continue to have. What will be seen going forward,I is a more normalized marketing spend.
Rebranding has clarified for the first time on a global basis one real brand and it sent a global message that we are not just a job board but looking to work with seekers and employers to find the best candidates possible by going after the best candidates the market has to offer.
We do business with less than 25% of companies over 500 people. That means there is an awful lot of big companies out there that we have not tapped in the past 12-plus months. There are millions literally of companies that are in the small business area that we just have done very little with, with less than 1% of that market.
Looking at the technology and platform investments that you have been making, do you think that verticalization or social media will be critical elements going forward?
We absolutely think that verticals will be an important part of our portfolio. If you look at the acquisitions that we made recently with Affinity Labs and where we are going with that and integrating in our core experience, verticals will be an extremely important part of that.
All of our products, as we move forward with the development, our focus on being able to expand the new products across a wide range of verticals, whether it is here in North America or globally, and the important thing is that verticals will be not only important from acquiring the right seekers but also presenting the right opportunities to the employer so we can get the right matches between the employers and the seekers through those different verticals.
Monster is well diversified, both by vertical and even though we, using technology as an example, we don’t have a specific vertical aimed at the moment at technology, we do a lot of business in the technology space.
Last year we made a number of decisions to reduce different forms of advertising on our career site. Those decisions were made because what had been promoted is to push the creation of advertising revenues in what we felt was a short-sighted way. It was having a big negative impact on our business.
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