Kent Plunkett, founder and chief executive officer stated, "Salary.com continues to expand its position as a leading provider of on-demand compensation and talent management solutions. In the fourth quarter we delivered our 28th consecutive quarter of revenue growth as we continued to deliver on our growth strategy. In fiscal 2008 we posted 50% revenue growth year over year and a 23% free cash flow margin, for an operating performance in the top group among on-demand software companies."

Today, Salary.com also announced the appointment of Bryce Chicoyne as chief financial officer replacing Chris Power. There are no known disagreements with Mr. Power on any matters relating to Salary.com’s operations, policies or practices.

"We are excited to have Bryce join our team. Bryce's skills in building strong finance teams at growing technology companies make him an ideal fit for Salary.com's culture and stage of growth. Bryce will be an asset to Salary.com as we continue our pace of rapid growth and expand our market leadership position. We look forward to officially welcoming Bryce during our fourth quarter 2008 earnings conference call today," said Plunkett.

Chicoyne is a seasoned financial executive and has extensive experience leading international financial operations, completing acquisitions and developing strong financial infrastructure for public companies. Mr. Chicoyne joins Salary.com from Harvard Bioscience (NASDAQ: HBIO), where he held the position of Chief Financial Officer from 2004 to 2008. In this role, he led the successful acquisition of an international company, implemented systems to comply with Section 404 of the Sarbanes-Oxley Act, and built a strong finance team. During his tenure at Harvard Bioscience, the company grew annual revenue nearly 30% to $83 million.

"This is a great time to join the Salary.com team. I believe that the company is well positioned to take advantage of significant growth opportunities. I look forward to leading the financial organization during this period of high growth," said Chicoyne.

Fourth Quarter Financial Highlights

-- Fourth quarter revenue of $9.3 million.

-- Record cash flow from operations of $3.0 million in the quarter and free cash flow, a non-GAAP measure, of $2.9 million. Cash flow from operations for the full year 2008 was $8.4 million, above Salary.com's prior outlook.

-- On a GAAP basis, Salary.com reported fourth quarter fiscal 2008 net loss attributable to common stockholders of $3.6 million, or ($0.26) per diluted share, compared to a net loss of $4.1 million, or ($0.44) per diluted share, in the fourth quarter of fiscal 2007.

-- On a non-GAAP basis, excluding the impact of stock-based compensation expense, amortization of intangibles and accretion of preferred stock, Salary.com reported a net loss attributable to common stockholders of $1.2 million, or ($0.09) per diluted share, in the fourth quarter of fiscal 2008, compared to a net loss of $1.1 million, or ($0.12) per diluted share, in the fourth quarter of fiscal 2007.

-- Cash and cash equivalents at the end of the fourth quarter of fiscal 2008 were $37.7 million, compared to $35.6 million at the end of the third quarter, with the increase primarily resulting from healthy cash flow from operations in the quarter.

-- Current deferred revenue grew to $20.5 million at the end of the fourth quarter, an increase from $19.4 million at the end of the third quarter. Total deferred revenue was $22.0 million at the end of the fourth quarter, which represented an increase from $20.9 million at the end of the third quarter.

Business Highlights

-- During the fourth quarter, Salary.com added nearly 240 new enterprise subscribers. Over the course of 2008, Salary.com grew its enterprise customer base from over 1,800 to nearly 2,800 in fiscal 2008.

-- New customer additions in the fourth quarter included marquee names such as Applied Materials, Bertelsmann, Inc., Greyhound Lines, Inc., Goya Foods, Martha Stewart Omnimedia, Scotts Miracle-Gro, Singapore Airlines, and Rolex Watch USA.

-- In March 2008, Salary.com released its first international dataset within the existing CompAnalyst market pricing suite in Canada and completed its first implementation. The Canadian version of CompAnalyst will allow employers to market jobs in Canada using a single, employer reported source of data and includes features such as comparison data represented in Canadian dollars and comprehensive data for over 600 benchmark job titles across 21 industries.

-- Also in March, Salary.com announced that it successfully earned the SAS 70 Type II Certification, an internationally recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA).

-- As announced April 16, 2008, Salary.com released the Hybrid Job Valuation Report Tool, an enhancement to the Job Valuation Report, to enable HR professionals and employers to accurately value blended or hybrid jobs within their organizations to ensure competitive pay packages for non-traditional positions.

-- Also in April, Salary.com announced the expansion of its talent management offering with the launch of TalentManager® Professional Edition for small and medium sized businesses. The professional edition is specifically designed for the needs of small and medium sized businesses with fewer than 500 full-time employees and aims to make pay and performance processes easy and hassle free.

-- Salary.com announced key strategic alliances with Convergys Customer Management Group Inc., InfoBasis Ltd. and Compensation Resources Inc. to offer enhanced solutions and consulting services. Salary.com will leverage partners to offer a full-suite of content-rich compensation and talent management software and advisory services to help customers deploy strategic talent management initiatives and increase return on human capital investment.

Business Outlook

Kent Plunkett, founder and chief executive officer commented, "In fiscal 2009 we plan to significantly increase our investment in sales and marketing to pursue the large market opportunity we see for our expanded product line in an underpenetrated market. While these investments will have a near-term impact on operating cash flow and net income, we believe they will accelerate the pace at which we will be able to realize our longer-term growth objectives. We expect these investments to allow Salary.com to grow our annual revenue to between $65 and $72 million and increase our annual operating cash flow to between $10 and $12 million by the end of fiscal 2010. Additionally, we anticipate that these investments will position us to achieve non-GAAP profitability in fiscal 2011."

For the first quarter of fiscal 2009, Salary.com expects total revenue in the range of $9.3 to $9.7 million. Non-GAAP net loss, which excludes non-cash stock-based compensation expenses of approximately $2.2 million and amortization of intangibles of approximately $0.8 million, is expected to be in the range of $3.5 to $3.9 million. GAAP loss for the first quarter of fiscal 2009 is expected to be in the range of $6.5 to $6.9 million. Weighted average shares for the quarter are estimated to be approximately 14.6 million shares.

Salary.com expects total revenue in fiscal 2009 to be in the range of $45.0 to $49.0 million. Due to the increased investment in sales and marketing mentioned above, cash flow from operations is expected to be in the range of $0 to $1.0 million for the full fiscal year. Non-GAAP net loss, which excludes non-cash impact of stock-based compensation expense of approximately $9.0 million and amortization of intangibles of approximately $3.0 million, is expected to be in the range of $10.0 to $13.0 million. On a GAAP basis, net loss for fiscal 2009 is expected to be in the range of $22.0 to $25.0 million. Weighted average basic shares for the year are estimated to be approximately 15.1 million shares.

About Salary.com, Inc.
Salary.com is a leading provider of on-demand compensation and talent management solutions helping businesses and individuals manage pay and performance. Salary.com’s highly configurable software applications, proprietary data and consulting services help HR and compensation professionals automate, streamline and optimize critical talent management processes including: market pricing, compensation planning, performance management, competency management and succession planning. Built with compensation and competency data at the core, Salary.com solutions provide businesses of all sizes with the most productive and cost-effective way to manage and inspire their most important asset – their people.

For more information, visit www.salary.com.

For additional investor information, please visit http://investor.salary.com.

Safe Harbor Statement

This release contains "forward-looking" statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These are statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "expects," "projects," "anticipates," "estimates," "believes," "intends," "plans," "should," "seeks," and similar expressions. This press release contains forward-looking statements relating to, among other things, Salary.com's expectations and assumptions concerning future performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. The risks and uncertainties referred to above include, but are not limited to, our ability to continue to release and gain customer acceptance of new and improved versions of our service, successful customer deployment and utilization of our services, our ability to expand our customer base and product and service offerings, interruptions or delays in our service or our Web hosting, our business model, breach of our security measures, the emerging market in which we operate, our ability to hire, retain and motivate our employees and manage our growth, and competition, as well as those risks and uncertainties described in Salary.com's filings with the Securities and Exchange Commission. Salary.com expressly disclaims any obligation to update any forward-looking statements.

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