Earnings: United Online Revs Fall 7 Percent; But People Keep Joining Pay Social Net Classmates

This story was written by Joseph Weisenthal.
Classmates, the subscription-based social net that United Online (NSDQ: UNTD) failed to take public continues to add subscribers Paying accounts at the unit were up 41 percent from last year. Company-wide revenue still fell by 7 percent to $122.3 million, dragged down by the ISP business, which saw a 22 percent decline in revenue. Still, analysts had been looking for about $120 million. Unlike EarthLink, which has managed to grow ISP income despite the revenue fall (by slashing costs), op income on the ISP side fell to $21.1 million from $27.0 million.

Back to Classmateswhich the company would still love to take public one dayrevenue grew by 19 percent to $57 million. The company added 288,000 paying subscribers in just this quarter. Op income grew by 29 percent in this unit to $6.1 million.

As for the acquisition of FTD, the company says it's still on track and that it recently nailed down $425 million in fresh funding towards the deal.

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By Joseph Weisenthal

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