• by Mark Walsh  @markfwal, August 31, 2007

Facebook may have all the hype, but it’s old school rival Classmates.com that’s prepping for a $125 million initial public offering. Owned by United Online, Classmates.com and its related social networks claimed 50 million registered members as of June 30, including 2.7 million paying accounts.

The newly formed Classmates Media will also include MyPoints.com, United Online’s loyalty marketing service. For the first quarter, Classmates Media reported a loss of $250,000 on revenues of $42.4 million, compared to a loss of $750,000 on sales of $25.1 million last year.

Ad revenue in the first quarter jumped to $20.2 million from $6 million a year ago, mainly due to United Online’s acquisition of MyPoints in April 2006. That increase was partly offset by lower ad revenues after Classmates.com cut back ad placements last year to help streamline the site.

Reducing ad clutter was part of a broader upgrade by Classmates.com that included adding personalization features to help compete with sites like MySpace and Facebook. Those sites are specifically mentioned as competitors in the prospectus’ listing of risk factors associated with the IPO.

Unlike Classmates.com, they rely on advertising rather than fee-paying members for the bulk of their revenues.