United Online said third quarter profit rose 7 percent, helped by a strong performance in its content and media business including Classmates.com. Net income was $13.4 million, or 20 cents per share, compared with $12.6 million, or 20 cents, a year earlier. Revenue fell 2 percent to $129.6 million. Content and Media revenue rose 53 percent to $37.5 million,while profit excluding some costs jumped 16 percent to $5 million. Pay accounts increased by 54,000 to 2.2 million.
The company will introduce new features to Classmates.com this quarter including Google Maps, a digital guest book called My Visitors 2 and message boards, CEO Mark Goldston told analysts during the company’s 3Q call (via transcript via SeekingAlpha.com). Users also will be able to gain points for posting their own content through United Online’s MyPoints business, which it bought for $56 million in April from UAL. The company also wants to improve advertising sales.
To that end, Goldston said the company has hired several new senior sales executives. Goldston: “We are increasing our focus on the top 100 internet advertisers and the top 50 advertising agencies, and we’ve started to see some real progress in this sales unit. Going forward, I hope that we see this increased focus that can prove our overall quality of the advertisers we present to our users and also help us to achieve bettermonetization through the addition of rich media and improved targeting capabilities, something we did not previously offer in any depth at United Online. We   also see opportunities in the search area, and presently we are exploring them with a number of different parties. We don’t have a formal search program at either Classmates or MyPoints, which is really amazing considering the huge size of those combined assets and the opportunity exists to integrate search as part of the overall product mix at both Classmates and MyPoints and to realize some meaningful incremental revenue.”
Earnings Release|Conference Call (replay)