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Five analysts and top management from four sector firms examine the human capital management sector in this special 54-page Human Capital Management issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info483.htm.

TWST: How do you see the industry evolving over the next three to five years? Do you see any of these companies getting into related businesses, corporate training for example?

Mr. Marcon: That’s a great question and I think the most progressive companies are already doing that, such as TMP Worldwide. They really use a bricks-and-clicks approach to the whole industry, and they’ve melded a host of different services to complement their e-cruiting portal, Monster.com. Right now, they provide traditional professional staffing and executive search services. They also provide what’s known as recruitment advertising agency services, things of that nature, to basically be able to fulfill all elements of recruiting, from interns to CEOs. Looking ahead, we believe that they’re exploring the value add they provide on the recruiting end through using technology to provide applicant tracking systems and other automated recruiting services. The other area that they’ve been getting into is things that they view as being related, such as training. So they have gotten into that area and, in fact, they’ve started Monster Learning within Monster.com, and they also have Monster Moving, which helps people to move because, frequently, when people change jobs, they also have to move. So they thought there would be some synergies there.

TWST: What’s your recommendation on TMP Worldwide (Nasdaq:TMPW)?

Mr. Marcon: I’ve got a strong buy rating on TMP Worldwide. From my perspective, it’s a company that’s got significant competitive advantages within an area that is enjoying very strong secular growth. There is no question that recruiting dollars are shifting from the help wanted section to the Internet. If you take a look at the amount of money that was spent on the newspapers, it was $8.7 billion for help wanted advertising in 2000 in the United States. Our projection is that 50% of that spend will end up moving to the Internet by 2005, and Monster.com currently has a 65% share of the e-cruiting revenues. We think that their share should stay at these levels or potentially even increase due to the network effect. But even if they didn’t, even if their share ended up shrinking to 50%, we would be looking at potentially 50% of a $4 billion marketplace, and the way their business scales, that could lead to about $2 billion in revenues and $1 billion in operating profits by 2005, just from Monster in the US alone. In addition, they are now the leading e-cruiting portal in Europe, and Europe is showing early signs of migrating to e-cruiting away from the newspaper. In the shorter term, the company has been very aggressive in reducing its costs. We don’t have high expectations for the fourth quarter because of the environment, but we do project that the economy and the labor markets will improve in 2002. We believe that TMP is the company that is best positioned to benefit from a cyclical rebound as well as the secular trend of recruiting dollars moving from the newspaper to the Net. So we’re very bullish on TMP.

This special issue includes:

1) Human Capital Management - In an in-depth (16,600 words) Analyst Roundtable, Mark W. Allen, Managing Director at SunTrust Robinson Humphrey Capital Markets, Randall A. Mehl, Director at Robert W. Baird & Co., Brandt Sakakeeny, Director at Deutsche Banc Alex. Brown, Inc. and Adam Waldo, Senior Vice President at Lehman Brothers, examine the outlook for the sector including the effect of Fed rate cuts, investment approach and share specific stock recommendations.

2) Human Capital Management - In an in-depth (4,900 words) Analyst Interview, Mark S. Marcon, Analyst at Wachovia Securities, examines the outlook for the sector and shares specific stock recommendations.

3) The TWST confidential Off-The-Record survey of management performance of seventeen sector firms asked market insiders about the ability of management teams to create shareholder value.

4) CEO interviews (average 2,500 words). Top management of four sector firms examine the outlook for their firm and the sector.