• August 6, 2008

Paying subscribers at Classmates.com increased 41% to 15.1 million in the second quarter of 2008 compared to the year-earlier period, helping United Online post companywide revenue of $122.3 million, beating analyst estimates.

Even so, quarterly revenue fell 7% from a year ago, pulled down by the company's shrinking ISP business.

Classmates.com, the flagship Web property of United Online, increased revenue 19% over last year to $57 million with 288,000 subscribers added in just the last quarter. Some Internet analysts have predicted that Classmates.com would wither in the face of competition from newer social networking powerhouses like Facebook and MySpace. But the site, started in 1995, has lately proven to be more resilient than expected.

United Online said Tuesday it still plans to take Classmates Media public after withdrawing an IPO for the unit in December 2007. But because market conditions haven't improved significantly since then, the company does not expect to complete a Classmates IPO before 2009.

The $3.9 million of expenses related to the proposed offering pushed down United Online's quarterly net income 17% to 19 cents per diluted share.--Mark Walsh