Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Jenny Wu with Morgan Stanley.
Jenny Wu - Morgan Stanley
My first question is regarding your margins and the way your margin is steadily improving in the past three quarters. You mentioned it is mainly due to the strengthening in operations and results and location, plus the cost to control. I'm just wondering, anything new on this front in 3Q? Meanwhile, how sustainable this matter could be, especially for the cost control because I remember, your cut-off like 5% of employee in the first half of '09, so how many employees you are having now? And when the economy recovers, are you going to add back more? And so related to this, what kind of margin trend should we expect? Sorry for such a long question.
Rick Yan
Thank you for your question. In terms of the cost control, I think the way we should look at that is this is happening in two ways -- one is the business slow down at the fourth quarter of 2008 and also at the beginning of 2009, at the same time there was also an accelerated transition from our print business to the online business. So we were -- at the beginning of the year, we were facing two challenges -- one is the slowdown in the market demand and also an accelerated shift from print to online. So a lot of the costs realignment measures that we took not only relate to the slowing of market demand but also related to realigning our cost structure to the business mix that we have.
In other words, we -- the online revenues are still growing but the print revenue in the first quarter of 2009 was dropping more than 40% compared to the first quarter of 2008, so a lot of the cost alignment measures were also taken on the print cost structure, put it this way. So the efficiency measure, so those measures has two impacts -- one is because we are more efficient now, our margin improved but also because we now have a higher product mix in '09, we are also having a higher gross margin. So that's the background in terms of why our margin improved -- again, two reasons, one is the '04 efficiency improvement that we took and also a product mix shift into more online business for our total revenue.
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