Classmates.com, the online community site for connecting with old classmates and friends (started before the phrase social network became trendy), is being hived off United Online (Nasdaq: UNTD), and has filed for a $125 million IPO. The company, founded in 195, was bought out by United in 2004 for $100 million.

SEE ALSO: United Online to Buy Classmates.com

The new hived off company will be called Classmates Media, and will include Classmates Online and it online loyalty marketing service MyPoints.com, both of which together have represented the majority of UOL’s Content & Media division. In its latest Q2 earnings, United reported revenues for this unit were up 29 percent to $49.7 million from $38.7 million. The rise was mainly due to consolidated ad revenues of $34.3 million, an increase of 32 percent versus the year-ago quarter.

Classmates reported revenue of $42.4 million for Q107 and revenue of $139.4 million for 2006.  It has had sustained operating losses of $11.5 million in 2005, $994K in 2006, and $442K in Q107. Its Class A shares will be listed on Nasdaq under the symbol “CLAS”. United Online will continue to maintain a majority ownership (all of Class B shares) stake in CMC following the offering. The company said it had more than 50 million registered accounts and 2.7 million paying accounts at the end of June.

The risk factors are, well, high: “Our social networking services compete with a wide variety of social networking Web sites, including broad social networking Web sites such as MySpace and Facebook; a number of specialty Web sites, including LinkedIn, Reunion.com and Monster.com’s Military.com service, that offer similar online social networking services based on school, work or military communities; and an increasing number of schools, employers and associations that maintain their own Internet-based alumni information services.” This pretty much says it all. Tough to compete against the free Classmates.com, aka Facebook.

The new company will use proceeds from the IPO to repay $50 million of notes payable to United plus interest, and for general corporate purposes. Full details in the S-1 filing.