Are Next-Gen Social Networks Trumping Classmates?
Is Classmates.com a casualty of the Facebook revolution? In what seems to be a death knell to the first pure-play social networking IPO in U.S., United Online has canceled the proposed IPO of its Classmates.com social networking unit. The company originally announced its plan to hive off the company in August, and in late November it said it expected to raise $177.7 million via the sale. But, citing the standard “market conditions,” the company now says that such a move wouldn’t be in the interest of stockholders. In other words, the interest wasn’t there. While there had been some excitement over a social networking pure-play IPO, Classmates.com, with its subscription-driven business model and earth-bound growth rates, couldn’t fully capture the buzz. United Online said it will take a $4.5-$5.5 million charge in Q4 associated with the aborted process.
