United Online Reports Second-Quarter Results

-- Quarterly Net Growth of 288,000 Classmates Media Segment Pay
Accounts

-- Classmates Media Segment Revenues Increase 19% vs. Q2 2007

-- Operating Income and Adjusted OIBDA Near High End of Guidance
Despite Expensing $3.9 Million in Deferred Transaction-Related
Costs Relating to Proposed IPO of Classmates Media Corporation
WOODLAND HILLS, Calif.--(Business Wire)--
United Online, Inc. (Nasdaq: UNTD), a leading provider of consumer
Internet and media services, today reported financial results for its
second quarter ended June 30, 2008.

"United Online posted another strong quarter, highlighted by
revenues above our guidance range and adjusted OIBDA near the high end
of guidance despite expensing $3.9 million in deferred
transaction-related costs relating to the proposed IPO of our
wholly-owned subsidiary, Classmates Media Corporation," commented Mark
R. Goldston, chairman, president and chief executive officer.

Goldston continued, "Our strong quarter again reflects impressive
growth in the Classmates Media segment, where pay accounts at June 30,
2008 grew 41% versus June 30, 2007 and increased a net 288,000 during
the second quarter. We have launched several feature enhancements
during 2008 that are contributing to increased traffic and
user-generated content on our social networking Web sites, underscored
by growth in active accounts in the Classmates Media segment from 13.9
million in Q1 2008 to 15.1 million in Q2 2008. Our Communications
segment, meanwhile, achieved record adjusted OIBDA as a percentage of
segment revenues in the second quarter, exceeding 40% for the first
time."

"In addition to being well positioned to grow our Classmates Media
segment and operate our Communications segment for profitability and
cash flows, the proposed acquisition of FTD Group, Inc. (NYSE: FTD)
will significantly increase and diversify our revenues and
profitability," Goldston said. "We are pleased to announce that we
have executed definitive documentation for the $375 million term loan
and $50 million revolver led by Wells Fargo Bank, National
Association, and Wells Fargo Bank has informed us that they have
completed their syndication of these loans. The term loan and
revolver, along with our recently announced $60 million commitment
from Silicon Valley Bank, represent all of the debt needed to
consummate the acquisition of FTD. While the closing of these loan
facilities remains subject to various conditions, we are optimistic
that we will have all of the financing in place necessary to close the
FTD acquisition."

Q2 2008 GAAP and Non-GAAP Results Include Expensing of $3.9
Million in Deferred Transaction-Related Costs Relating to Proposed IPO
of Classmates Media Corporation

In 2007, United Online commenced the process for an initial public
offering ("IPO") of Classmates Media Corporation ("CMC"). While it
remains the company's strategy to complete an IPO of CMC, the company
believes the capital markets have not improved significantly since CMC
withdrew its Form S-1 registration statement in December 2007 and, as
previously disclosed, the company has concluded that it is unlikely
that the proposed IPO will be completed before 2009. As a result, in
the second quarter ended June 30, 2008 the company expensed $3.9
million in deferred transaction-related costs relating to the proposed
IPO. Accordingly, GAAP operating income, adjusted OIBDA(1), segment
income from operations, segment adjusted OIBDA(1), GAAP net income,
and adjusted net income(2) in the quarter ended June 30, 2008, as
presented in the following tables, include the $3.9 million ($2.5
million, or $0.03 per diluted share, net of tax) of expenses. The
expensing of the $3.9 million in deferred transaction-related costs is
included in the results of the Classmates Media segment and reflects
costs that had been paid by the company in previous quarters.

Summary Results for Second Quarter Ended June 30, 2008:

The following table summarizes key financial results for the
second quarter ended June 30, 2008:

-0-
*T
(in millions, except per share
and account figures)
Financial Highlights Q2 2008 Q2 2007 % Change
--------------------------------------- --------- --------- ----------
Classmates Media revenues $ 57.0 $ 47.7 19%
Communications revenues 65.3 83.7 (22%)
--------- ---------
Consolidated revenues $ 122.3 $ 131.4 (7%)
========= =========

GAAP operating income(a) $ 22.0 $ 24.7 (11%)
Adjusted OIBDA(1)(a) $ 37.6 $ 36.3 3%
Adjusted OIBDA as a % of
consolidated revenues(a) 30.7% 27.7%

GAAP net income(a) $ 13.7 $ 16.2 (15%)
GAAP diluted net income per share(a) $ 0.19 $ 0.23 (17%)

Adjusted net income(2)(a) $ 21.3 $ 19.4 9%
Adjusted diluted net income per
share(2)(a) $ 0.29 $ 0.27 7%

Net growth in total pay accounts(3) 161,000 134,000 20%
*T

-- Classmates Media segment revenues were a record $57.0 million,
an increase of 19% versus the year-ago quarter.

-- Communications segment revenues were $65.3 million, a decline
of 22% versus the year-ago quarter.

-- GAAP operating income was $22.0 million(a), a decrease of 11%
versus the year-ago quarter.

-- Adjusted OIBDA(1) was $37.6 million(a), an increase of 3%
versus the year-ago quarter.

-- Adjusted OIBDA(1) expanded to 30.7%(a) of consolidated
revenues from 27.7% of consolidated revenues in the year-ago
quarter.

-- GAAP diluted net income per share was $0.19(a), a decrease of
17% compared to the year-ago quarter, which reflects the $3.9
million ($2.5 million net of tax, or $0.03 per diluted share)
of expenses relating to the proposed IPO of CMC, and a higher
effective tax rate in the 2008 quarter than in the year-ago
period due to the re-measurement of certain deferred tax
assets in the quarter ended June 30, 2007 that reduced the
effective tax rate in that period.

-- Adjusted diluted net income per share(2) was $0.29(a), an
increase of 7% compared to the year-ago quarter.

-- Pay accounts(3) increased by a net 161,000, versus a net
increase of 134,000 pay accounts in the year-ago quarter.
Total pay accounts were 5.7 million at June 30, 2008.

(a) GAAP operating income, adjusted OIBDA(1), adjusted OIBDA as a
% of consolidated revenues, GAAP net income, GAAP diluted net income
per share, adjusted net income(2), and adjusted diluted net income per
share(2) in the quarter ended June 30, 2008 were impacted by the $3.9
million ($2.5 million net of tax, or $0.03 per diluted share) of
expenses relating to the proposed IPO of CMC.

Scott H. Ray, executive vice president and chief financial
officer, commented, "Our disciplined approach to financial management,
combined with solid execution of our marketing and product initiatives
during the quarter, were key drivers of our strong results and helped
the company deliver increased adjusted OIBDA both in absolute terms
and as a percentage of consolidated revenues in the second quarter
versus the year-ago period."

Cash Flows, Balance Sheet and Dividend Highlights For Second
Quarter Ended June 30, 2008:

-- Cash flows from operations were $36.1 million, an increase of
1% versus the year-ago quarter.

-- Free cash flow(4) was $31.9 million, an increase of 3% versus
the year-ago quarter.

-- Cash, cash equivalents and short-term investments at June 30,
2008 increased to a combined $240.0 million from $224.0
million at March 31, 2008, representing a net increase of
$16.0 million during the quarter ended June 30, 2008.

-- The company paid $14.9 million in cash dividends during the
quarter.

-- The company's board of directors recently declared a regular
quarterly cash dividend of $0.20 per share for the 14th
consecutive quarter. The dividend is payable on August 29,
2008 to shareholders of record on August 14, 2008. As
previously announced, following the closing of the proposed
acquisition of FTD Group, Inc. ("FTD"), the company expects to
decrease its regular quarterly cash dividend from $0.20 per
share to $0.10 per share.

Segment Results for Second Quarter Ended June 30, 2008:

Classmates Media:

-0-
*T
(in millions, except
percentages)
Financial Highlights Q2 2008 Q2 2007 % Change
--------------------------------------------- ------- -------
Billable services revenues $34.1 $25.6 33%
Advertising revenues 22.9 22.1 3%
------- -------
Segment revenues $57.0 $47.7 19%
======= =======
as a % of consolidated revenues 46.6% 36.3%

Segment income from operations(b) $ 7.9 $ 6.1 30%
Segment adjusted OIBDA(1)(b) $10.6 $ 7.0 52%
as a % of segment revenues(b) 18.7% 14.6%
*T

-- Segment revenues were a record $57.0 million, an increase of
19% versus the year-ago quarter, primarily due to continuing
strong growth in segment pay accounts.

-- The segment represented 46.6% of consolidated revenues in the
second quarter, versus 36.3% in the year-ago quarter.

-- Segment adjusted OIBDA(1) was $10.6 million(b), an increase of
52% versus the year-ago quarter.

-- Segment adjusted OIBDA(1) increased to 18.7%(b) as a
percentage of segment revenues versus 14.6% of segment
revenues in the year-ago quarter.

-- Pay accounts(3) increased by a net 288,000, up from net growth
of 277,000 pay accounts in the year-ago quarter. Pay accounts
as of June 30, 2008 were 3.8 million, a 41% increase from June
30, 2007 and a sequential quarter increase of 8% versus March
31, 2008.

-- The segment represented 66.5% of total pay accounts(3) at June
30, 2008, compared to 63.3% at March 31, 2008 and 53.0% at
June 30, 2007.

-- Segment active accounts(3) were 15.1 million, an increase of
29% versus 11.7 million in the year-ago quarter, and a
sequential increase of 9% versus 13.9 million in the quarter
ended March 31, 2008.

(b) Segment income from operations, segment adjusted OIBDA(1) and
segment adjusted OIBDA as a % of segment revenues in the quarter ended
June 30, 2008 were impacted by the $3.9 million of expenses relating
to the proposed IPO of CMC.

Communications:

-0-
*T
(in millions, except
percentages)
Financial Highlights Q2 2008 Q2 2007 % Change
------------------------------------------- ------- ------- ----------
Billable services revenues $56.1 $71.5 (21%)
Advertising revenues 9.1 12.2 (25%)
------- -------
Segment revenues $65.3 $83.7 (22%)
======= =======
as a % of consolidated revenues 53.4% 63.7%

Segment income from operations $21.1 $27.0 (22%)
Segment adjusted OIBDA(1) $26.9 $29.4 (8%)
as a % of segment revenues 41.3% 35.1%
*T

-- Segment revenues were $65.3 million, a decrease of 22% versus
the year-ago quarter, primarily driven by a decrease in
segment pay accounts.(3)

-- The segment represented 53.4% of consolidated revenues in the
second quarter, versus 63.7% in the year-ago quarter.

-- Segment adjusted OIBDA(1) was $26.9 million, a decrease of 8%
versus the year-ago quarter and up slightly from $26.8 million
in the quarter ended March 31, 2008.

-- Segment adjusted OIBDA(1) increased to a record 41.3% of
segment revenues during the second quarter of 2008, reflecting
the company's continuing efforts in expense management and
driving profitability and cash flows.

-- Pay accounts(3) declined by a net 127,000 versus a net decline
of 143,000 pay accounts in the year-ago quarter. Segment pay
accounts at June 30, 2008 were 1.9 million.

-- The segment represented 33.5% of total pay accounts(3) at June
30, 2008, compared to 36.7% at March 31, 2008 and 47.0% at
June 30, 2007.

Business Outlook:

The following forward-looking information includes certain
projections made by management as of the date of this press release.
The company does not intend to revise or update this information and
may not provide this type of information in the future. Due to a
variety of factors, actual results may differ significantly from those
projected. Factors include, without limitation, the factors referenced
later in this announcement under the caption "Cautionary Information
Regarding Forward-Looking Statements." These and other factors are
discussed in more detail in the company's filings with the Securities
and Exchange Commission.

Below is the company's initial guidance for the quarter ending
September 30, 2008 and updated guidance for the year ending December
31, 2008, which excludes the impact of the proposed acquisition of
FTD. The company currently anticipates that the proposed FTD
acquisition will close during the third quarter of 2008.

Third-Quarter 2008 Guidance:

-0-
*T
Third-Quarter 2008 (in millions) Guidance
------------------------------------------------------ ---------------
Revenues $117.0 - $121.0
------------------------------------------------------ ---------------
Adjusted OIBDA(1) $34.0 - $38.0
------------------------------------------------------ ---------------
*T

Full-Year 2008 Guidance:

-0-
*T
Full-Year 2008 (in millions) Guidance Prior Guidance
-------------------------------------- --------------- ---------------
Adjusted OIBDA(1) $149.0 - $154.0 $147.0 - $152.0
-------------------------------------- --------------- ---------------
*T

United Online has increased its 2008 guidance for operating income
and adjusted OIBDA(1), despite expensing $3.9 million in deferred
transaction-related costs in the quarter ended June 30, 2008 relating
to the proposed IPO of CMC. The company continues to anticipate a
decline in total revenues in 2008 when compared to 2007, as continued
decreases in Communications segment revenues are expected to be
partially offset by continued increases in Classmates Media segment
revenues.

The table below reconciles the company's guidance for operating
income, a GAAP measure, to adjusted OIBDA(1).

-0-
*T
Third-Quarter and Full-
Year 2008 Q3 2008 FY 2008 Prior FY 2008
(in millions) Guidance Guidance Guidance
------------------------ ------------- --------------- ---------------
GAAP Operating Income $16.9 - $20.9 $82.3 - $87.3 $81.2 - $86.2
------------------------ ------------- --------------- ---------------
Depreciation 5.0 20.3 19.6
------------------------ ------------- --------------- ---------------
Amortization of
intangible assets 2.2 9.3 10.2
------------------------ ------------- --------------- ---------------
Stock-based
compensation 9.8 36.4 35.3
------------------------ ------------- --------------- ---------------
Restructuring charges 0.1 0.7 0.7
------------------------ ------------- --------------- ---------------
Adjusted OIBDA(1) $34.0 - $38.0 $149.0 - $154.0 $147.0 - $152.0
------------------------ ------------- --------------- ---------------
*T

(1) Adjusted operating income before depreciation and amortization
(adjusted OIBDA) is defined by the company as operating income before
depreciation; amortization; stock-based compensation; restructuring
and related charges; and impairment of goodwill, intangible assets and
long-lived assets. The company's definition of adjusted OIBDA has been
modified from time to time. Management believes that because adjusted
OIBDA excludes (1) certain non-cash expenses (such as depreciation,
amortization, stock-based compensation, and impairment of goodwill,
intangible assets and long-lived assets); and (2) expenses that are
not reflective of the company's core operating results over time (such
as restructuring and related charges), this measure provides investors
with additional useful information to measure the company's financial
performance, particularly with respect to changes in performance from
period to period. Management uses adjusted OIBDA to measure the
company's performance. The company's board of directors has used this
measure in determining certain compensation incentives for certain
members of the company's management. Adjusted OIBDA is not determined
in accordance with accounting principles generally accepted in the
United States of America ("GAAP") and should be considered in addition
to, not as a substitute for or superior to, financial measures
determined in accordance with GAAP. A limitation associated with the
use of adjusted OIBDA is that it does not reflect the periodic costs
of certain tangible and intangible assets used in generating revenues
in the company's business. Management evaluates the costs of such
tangible and intangible assets through other financial activities such
as evaluations of capital expenditures and purchase accounting. An
additional limitation associated with this measure is that it does not
include stock-based compensation expenses related to the company's
workforce. Management compensates for this limitation by providing a
summary of stock-based compensation expenses on the face of the
consolidated statements of operations. A further limitation associated
with the use of this measure is that it does not reflect the costs of
restructuring and related charges and impairment of goodwill,
intangible assets and long-lived assets. Management compensates for
this limitation by providing supplemental information about
restructuring and related charges and impairment charges within its
financial press releases and SEC filings, when applicable. An
additional limitation associated with the use of this measure is that
the term "adjusted OIBDA" does not have a standardized meaning.
Therefore, other companies may use the same or a similarly named
measure but exclude different items or use different computations,
which may not provide investors a comparable view of the company's
performance in relation to other companies. Management compensates for
this limitation by presenting the most comparable GAAP measure,
operating income, directly ahead of adjusted OIBDA within its
financial press releases and by providing a reconciliation that shows
and describes the adjustments made. A reconciliation to operating
income is provided in the accompanying tables.

Adjusted OIBDA for each of the company's segments is defined by
the company as segment income from operations, as set forth in the
company's Forms 10-K and Forms 10-Q, before stock-based compensation,
restructuring and related charges and impairment of goodwill,
intangible assets and long-lived assets. The company's definition of
adjusted OIBDA for each of the company's segments has been modified
from time to time. Management believes that because segment adjusted
OIBDA and segment adjusted OIBDA as a percentage of segment revenues
exclude (1) certain non-cash expenses (such as stock-based
compensation, and impairment of goodwill, intangible assets and
long-lived assets); and (2) expenses that are not reflective of the
segment's core operating results over time (such as restructuring and
related charges), these measures provide investors with additional
useful information to evaluate the company's segment financial
performance, particularly with respect to changes in performance from
period to period. Segment adjusted OIBDA and segment adjusted OIBDA as
a percentage of segment revenues are not determined in accordance with
GAAP and should be considered in addition to, not as a substitute for
or superior to, financial measures determined in accordance with GAAP.
A limitation associated with this measure is that it does not include
stock-based compensation expenses related to the company's workforce.
Management compensates for this limitation by providing a summary of
stock-based compensation expenses on the face of the consolidated
statements of operations. A further limitation associated with the use
of these measures is that they do not reflect the costs of
restructuring and related charges and impairment charges related to an
operating segment. Management compensates for this limitation by
providing supplemental information about restructuring and related
charges and impairment charges by segment within its financial press
releases and SEC filings, when applicable. A reconciliation to segment
income from operations, its most comparable GAAP financial measure, is
provided in the accompanying tables.

(2) Adjusted net income is defined by the company as net income
before the after-tax effect of: stock-based compensation; amortization
of intangible assets; restructuring and related charges; impairment of
goodwill, intangible assets and long-lived assets; and the cumulative
effect of a change in accounting principle as a result of the adoption
of SFAS 123R, and the re-measurement of certain deferred tax assets.
Management believes that adjusted net income and adjusted diluted net
income per share provide investors with additional useful information
to measure the company's financial performance, particularly with
respect to changes in performance from period to period, because these
measures are exclusive of (1) certain non-cash expenses (such as
stock-based compensation, amortization, the cumulative effect of
change in accounting principle, and impairment of goodwill, intangible
assets and long-lived assets); and (2) expenses that are not
reflective of the company's core results over time (such as
restructuring and related charges). Management also uses adjusted net
income and adjusted diluted net income per share for this purpose.
Adjusted net income and adjusted diluted net income per share are not
determined in accordance with GAAP and should be considered in
addition to, not as a substitute for or superior to, financial
measures determined in accordance with GAAP. The limitations of
adjusted net income and adjusted diluted net income per share are
that, similar to adjusted OIBDA, they do not include certain costs,
and the terms "adjusted net income" and "adjusted diluted net income
per share" do not have standardized meanings. Therefore, other
companies may use the same or similarly named measures but exclude
different items or use different computations, which may not provide
investors a comparable view of the company's performance in relation
to other companies. Management compensates for this limitation by
presenting the most comparable GAAP measures, net income and diluted
net income per share, directly ahead of adjusted net income and
adjusted diluted net income per share within its financial press
releases and by providing a reconciliation that shows and describes
the adjustments made. Reconciliations to net income and diluted net
income per share are provided in the accompanying tables.

(3) A pay account represents a unique billing relationship with a
customer who subscribes to one or more of the company's services. A
pay account does not equate to a unique subscriber since one
subscriber could have several pay accounts. Classmates Media segment
active accounts are defined as: all social networking pay accounts as
of the date presented; the monthly average for the period of all free
social networking accounts who have visited the company's domestic or
international social networking Web sites, excluding The Names
Database, at least once during the period; and the monthly average for
the period of all loyalty marketing members who have earned or
redeemed points during such period. Communications segment active
accounts are defined as all Communications pay accounts as of the date
presented combined with the number of free Communications accounts
(access and email users), excluding free Web hosting accounts, that
logged on to the company's services at least once during the preceding
31 days.

(4) Free cash flow is defined by the company as net cash provided
by operating activities, less capital expenditures and including the
excess tax benefits from stock-based compensation and cash paid for
restructuring and related charges. Management believes that free cash
flow provides investors with additional useful information to measure
operating liquidity because it reflects the company's operating cash
flows after investing in capital assets and prior to cash paid for
restructuring and related charges. It also fully reflects the tax
benefits realized by the company from stock-based compensation. This
measure is used by management, and may also be useful for investors,
to assess the company's ability to pay its quarterly dividend, repay
debt obligations, generate cash flow for a variety of strategic
opportunities, including reinvestment in the business, and effect
potential acquisitions and share repurchases. Free cash flow is not
determined in accordance with GAAP and should be considered in
addition to, not as a substitute for or superior to, financial
measures determined in accordance with GAAP. A limitation of free cash
flow is that it does not represent the total increase or decrease in
cash during the period. An additional limitation associated with the
use of this measure is that the term "free cash flow" does not have a
standardized meaning. Therefore, other companies may use the same or a
similarly named measure but exclude different items or use different
computations, which may not provide investors a comparable view of the
company's performance in relation to other companies. Management
compensates for this limitation by presenting the most comparable GAAP
measure, net cash provided by operating activities, directly ahead of
free cash flow within its financial press releases and by providing a
reconciliation that shows and describes the adjustments made. A
reconciliation to net cash provided by operating activities is
provided in the accompanying tables.

Investor Conference Call Today at 4:30 p.m. ET (1:30 p.m. PT):

United Online will host a conference call today at 4:30 p.m. ET
(1:30 p.m. PT) to discuss its quarterly results. To participate,
please dial 888-632-5006 (or 913-312-1379 outside the U.S.), and
provide the confirmation code, 3234702. A live webcast of the call,
along with a presentation containing financial highlights for the
quarter ended June 30, 2008, can also be accessed through the
"investors" section of the company's Web site located at
www.unitedonline.com. The presentation and a replay of the broadcast
will be available on the site for seven days, or by dialing
888-203-1112 (or 719-457-0820 outside of the U.S.) and the
confirmation code, 3234702.

About United Online:

United Online, Inc. (Nasdaq: UNTD) is a leading provider of
consumer Internet and media services. The company's Classmates Media
services include online social networking (Classmates) and online
loyalty marketing (MyPoints). Its Communications services include
Internet access (NetZero, Juno) and email. United Online is
headquartered in Woodland Hills, CA, with offices in Renton, WA; San
Francisco, CA; Schaumburg, IL; Fort Lee, NJ; Erlangen, Germany; and
Hyderabad, India. For more information about United Online, please
visit www.unitedonline.com.

Cautionary Information Regarding Forward-Looking Statements:

This release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, as amended, based on current
expectations, estimates and projections about the company's
operations, industry, financial condition, performance and results of
operations. Statements containing words such as "guidance," "may,"
"believe," "anticipate," "expect," "intend," "plan," "project,"
"projections," "business outlook," and "estimate" or similar
expressions constitute forward-looking statements. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. These
statements include, without limitation, expectations regarding future:
financial performance; depreciation and amortization; stock-based
compensation; dividends; restructuring and related charges; business
strategies and product plans of the company; and statements regarding
the anticipated impact or benefits of pending acquisitions, including
the proposed acquisition of FTD Group, Inc. ("FTD"), and other
transactions described or referenced herein. Any such forward-looking
statements are not guarantees of future performance or results and
involve risks and uncertainties that may cause actual performance and
results to differ materially from those predicted. Reported results
should not be considered an indication of future performance.
Potential risks and uncertainties include, among others: the effect of
competition; the company's inability to retain its free and pay
accounts and the rate at which free and pay accounts sign up for or
use the company's services; changes in pay accounts and the mix of pay
accounts; the company's inability to increase or maintain its
advertising revenues; the effects of changes in marketing expenditures
or shifts in marketing expenditures; the effects of seasonality;
changes in stock-based compensation; changes in amortization or
depreciation due to a variety of factors; potential write down,
reserve against or impairment of assets including receivables,
goodwill, intangibles or other assets including capitalized
transaction-related costs associated with the proposed acquisition of
FTD; that the company will incur additional restructuring and related
charges or currently anticipated restructuring and related charges
will be greater than anticipated; risks associated with the
commercialization of new services; the company's ability to enforce or
defend its ownership and use of intellectual property; changes in tax
laws, the company's business or other factors that would impact
anticipated tax benefits; the company's ability to successfully
identify, consummate and integrate acquisitions, including the
proposed acquisition of FTD; the failure to satisfy any of the
conditions, including the financing condition, to complete the
proposed acquisition of FTD; the failure to obtain financing to
complete the proposed acquisition of FTD; the failure of the proposed
acquisition of FTD to be accretive when anticipated, if ever; the
outcome of any litigation or judicial actions that have been or may be
instituted against the company, FTD or others relating to the proposed
acquisition of FTD; upon consummation of the proposed acquisition of
FTD, the company's ability to develop successful marketing
initiatives, products and services, improve the overall performance of
the FTD business and apply the company's experience to maintain and
build upon the FTD brand; the inability to successfully integrate the
businesses and operations of the company and FTD; the failure to
achieve cost savings and other benefits from the proposed acquisition
of FTD; the impact of, and restrictions associated with, the debt
incurred in connection with the proposed acquisition of FTD, including
an adverse change in the ratings afforded to the company, FTD or their
credit facilities or debt securities, as applicable, by rating
agencies or a lower rating afforded to the combined company's debt
securities; the costs of the proposed acquisition of FTD being greater
than anticipated; unanticipated delays as a result of regulatory
issues or other factors; risks associated with the combined business
and other effects of, and the timing of, the proposed acquisition of
FTD; the company's ability to obtain additional financing; problems
associated with the company's operations, systems or technologies; the
company's ability to retain key customers and key personnel; risks
associated with litigation and governmental regulation; the effects of
discontinuing or discontinued business operations; changes in general
economic and marketing conditions and laws; as well as the risk
factors relating to each of the company and FTD as disclosed in the
company's and FTD's respective filings with the Securities and
Exchange Commission ("SEC"). In addition, the payment of future
dividends and any possible share repurchases are discretionary and
will be subject to determination by the company's Board of Directors
each quarter and from time to time following its review of the
company's financial performance and other factors. For example, a
change in the company's business needs including working capital and
funding for acquisitions, including the proposed acquisition of FTD,
or a change in tax laws relating to dividends, could cause the
company's Board of Directors to decide to cease the payment of or
reduce the dividend in the future. In addition, the company's ability
to pay dividends may be restricted as a result of the terms of the
indebtedness which the company anticipates incurring in connection
with the proposed acquisition of FTD. From time to time, the company
considers acquisitions or divestitures that, if consummated, could be
material. Forward-looking statements regarding financial metrics are
based upon the assumption that no such acquisition, including the
proposed acquisition of FTD, or divestiture is consummated during the
relevant periods. If an acquisition or divestiture were consummated,
actual results could differ materially from any forward-looking
statements. More information about potential factors that could affect
the company's business and financial results is included in the
company's annual and quarterly reports filed with the SEC
(http://www.sec.gov), including, without limitation, information under
the captions "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors."

Undue reliance should not be placed on these forward-looking
statements, which speak only as of the date of this release. The
company does not undertake any obligation to publicly update or
release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this release or to reflect
the occurrence of unanticipated events, except as required by law.

The company has filed with the SEC a Registration Statement on
Form S-4 and a related proxy statement of FTD and prospectus of the
company and other relevant materials in connection with the proposed
FTD acquisition. Investors and stockholders are urged to read the
proxy statement/prospectus and Registration Statement, and any and all
amendments or supplements thereto, because they contain important
information about the proposed FTD acquisition, including risk factors
relating to the proposed acquisition, the FTD business, and the
company's proposed financing of the acquisition. Investors and
stockholders may obtain a free copy of the proxy statement/prospectus
and Registration Statement, as well as other documents filed by the
company with the SEC, at the SEC's Web site at www.sec.gov. Investors
and stockholders may also obtain a free copy of the proxy
statement/prospectus and Registration Statement and the respective
filings with the SEC directly from the company by directing a request
to Erik Randerson at (818) 287-3350.

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*T
UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

Quarter Ended June 30,
----------------------
2008 2007
------------ ---------

Revenues $122,273 $131,417
Operating expenses:
Cost of revenues(a) 26,830 30,409
Sales and marketing(a) 35,809 42,712
Technology and development(a) 12,521 13,065
General and administrative(a) 22,774 16,900
Amortization of intangible assets 2,022 3,204
Restructuring charges 357 394
------------ ---------
Total operating expenses 100,313 106,684
------------ ---------

Operating income 21,960 24,733

Interest and other income, net 1,947 1,881
Interest expense (379) (372)
------------ ---------

Income before income taxes 23,528 26,242
Provision for income taxes 9,790 10,034
------------ ---------
Net income $ 13,738 $ 16,208
============ =========

Basic net income per share $ 0.20 $ 0.24
============ =========

Diluted net income per share $ 0.19 $ 0.23
============ =========

Shares used to calculate basic net income per
share 68,853 66,685
============ =========
Shares used to calculate diluted net income per
share 70,492 69,351
============ =========
Shares outstanding at end of period 69,037 67,462
============ =========

(a) Stock-based compensation was allocated as
follows:
Cost of revenues $ 174 $ 254
Sales and marketing 1,805 943
Technology and development 1,311 1,211
General and administrative 4,851 366
------------ ---------
Total stock-based compensation $ 8,141 $ 2,774
============ =========

*T

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UNITED ONLINE, INC.
Unaudited Reconciliations of Non-GAAP Financial Data
(in thousands)

Unaudited Reconciliation of Operating Income to
Adjusted OIBDA(1)

Quarter Ended June 30,
----------------------
2008 2007
----------- ----------
Operating income $21,960 $24,733
Depreciation 5,086 5,234
Amortization of intangible assets 2,022 3,204
----------- ----------
Operating income before depreciation and
amortization 29,068 33,171
Stock-based compensation 8,141 2,774
Restructuring charges 357 394
----------- ----------
Adjusted operating income before depreciation
and amortization $37,566 $36,339
=========== ==========

Unaudited Reconciliation of Segment Income from
Operations to Segment Adjusted OIBDA(1)

Quarter Ended June 30,
----------------------
2008 2007
----------- ----------
Classmates Media:
Segment income from operations $ 7,937 $ 6,122
Stock-based compensation 2,708 863
----------- ----------
Segment adjusted operating income before
depreciation and amortization $10,645 $ 6,985
=========== ==========

Communications:
Segment income from operations $21,131 $27,049
Stock-based compensation 5,433 1,911
Restructuring charges 357 394
----------- ----------
Segment adjusted operating income before
depreciation and amortization $26,921 $29,354
=========== ==========

*T

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UNITED ONLINE, INC.
Unaudited Reconciliation of Net Income to Adjusted Net Income(2)
(in thousands, except per share amounts)

Quarter Ended June 30,
----------------------
2008 2007
----------- ----------

Net income $13,738 $16,208
Add (deduct):
Stock-based compensation 8,141 2,774
Amortization of intangible assets 2,022 3,204
Restructuring charges 357 394
----------- ----------
24,258 22,580

Income tax effect of adjusting entries (3,001) (2,483)
Re-measurement of certain deferred tax assets - (658)
----------- ----------
Adjusted net income $21,257 $19,439
=========== ==========

Basic net income per share $ 0.20 $ 0.24
=========== ==========
Diluted net income per share $ 0.19 $ 0.23
=========== ==========

Adjusted basic net income per share $ 0.31 $ 0.29
=========== ==========
Adjusted diluted net income per share $ 0.29 $ 0.27
=========== ==========

Shares used to calculate basic net income per
share 68,853 66,685
=========== ==========
Shares used to calculate diluted net income per
share 70,492 69,351
=========== ==========

Shares used to calculate adjusted basic net
income per share 68,853 66,685
=========== ==========
Shares used to calculate adjusted diluted net
income per share(a) 73,020 70,873
=========== ==========

----------------------------------------------------------------------
(a) Includes the adjustment of shares used to calculate diluted net
income per share resulting from the elimination of stock-based
compensation.

*T

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UNITED ONLINE, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)

June 30, December 31,
2008 2007
-------- ------------

ASSETS
Cash, cash equivalents and short-term
investments $239,990 $218,307
Accounts receivable, net 26,894 28,765
Deferred tax assets, net 64,674 64,609
Property and equipment, net 36,489 39,570
Goodwill and intangible assets, net 168,342 173,267
Other assets 26,875 27,875
-------- ------------
Total assets $563,264 $552,393
======== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 37,161 $ 38,095
Accrued liabilities 19,872 30,586
Member redemption liability 26,688 24,560
Deferred revenue 76,064 67,777
Capital leases 5 13
Other liabilities 10,904 10,734
-------- ------------
Total liabilities 170,694 171,765
-------- ------------

Stockholders' equity 392,570 380,628

-------- ------------
Total liabilities and stockholders' equity $563,264 $552,393
======== ============

*T

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UNITED ONLINE, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)

Quarter Ended June 30,
----------------------
2008 2007
------------ ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,738 $ 16,208
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and stock-based
compensation 15,249 11,212
Provision for doubtful accounts receivable 268 1,299
Deferred taxes and other 296 1,250
Tax benefits from stock-based compensation 148 2,541
Excess tax benefits from stock-based
compensation (38) (1,665)
Change in operating assets and liabilities:
Accounts receivable (1,933) (819)
Other assets 865 (3,264)
Accounts payable and accrued liabilities 1,326 3,412
Member redemption liability 2,932 1,636
Deferred revenue 3,250 4,046
Other liabilities (10) (16)
------------ ---------
Net cash provided by operating activities 36,091 35,840
------------ ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,457) (6,766)
Purchases of short-term investments (51,110) (85,014)
Proceeds from maturities of short-term
investments 25,315 22,275
Proceeds from sales of short-term investments 5,250 42,266
Cash paid for proposed acquisition (2,483) -
Proceeds from sales of assets, net 20 7
------------ ---------
Net cash used for investing activities (27,465) (27,232)
------------ ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital leases (4) (4)
Proceeds from exercises of stock options 349 4,954
Proceeds from employee stock purchase plan 2,576 3,485
Repurchases of common stock (962) (1,125)
Payments for dividends (14,900) (14,447)
Excess tax benefits from stock-based
compensation 38 1,665
------------ ---------
Net cash used for financing activities (12,903) (5,472)
------------ ---------

Effect of exchange rate changes on cash and
cash equivalents (153) (23)

Change in cash and cash equivalents (4,430) 3,113
Cash and cash equivalents, beginning of period 118,097 16,585
------------ ---------
Cash and cash equivalents, end of period $113,667 $ 19,698
============ =========

*T

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UNITED ONLINE, INC.
Unaudited Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow(4)
(in thousands)

Quarter Ended June 30,
----------------------
2008 2007
----------- ----------
Net cash provided by operating activities $36,091 $35,840
Add (deduct):
Capital expenditures (4,457) (6,766)
Excess tax benefits from stock-based
compensation 38 1,665
Cash paid for restructuring charges 276 394
----------- ----------
Free cash flow $31,948 $31,133
=========== ==========

*T

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UNITED ONLINE, INC.
Unaudited Segment Information(a)
(in thousands)

Quarter Ended June 30, 2008
----------------------------------------
Classmates Media Communications Total
---------------- -------------- --------

Billable services $34,134 $56,134 $ 90,268
Advertising 22,879 9,126 32,005
---------------- -------------- --------
Total revenues 57,013 65,260 122,273
---------------- -------------- --------

Operating expenses:
Cost of revenue 11,539 15,291 26,830
Sales and marketing 20,985 14,824 35,809
Technology and development 5,496 7,025 12,521
General and administrative 13,144 9,630 22,774
Amortization of intangible
assets 1,760 262 2,022
Restructuring charges - 357 357
---------------- -------------- --------
Total operating expenses 52,924 47,389 100,313
---------------- -------------- --------

Operating income 4,089 17,871 21,960
---------------- -------------- --------

Depreciation 2,088 2,998 5,086
Amortization of intangible
assets 1,760 262 2,022
---------------- -------------- --------
Operating income before
depreciation and
amortization 7,937 21,131 29,068
Stock-based compensation 2,708 5,433 8,141
Restructuring charges - 357 357
---------------- -------------- --------
Adjusted operating income
before depreciation and
amortization $10,645 $26,921 $ 37,566
================ ============== ========

Quarter Ended June 30, 2007
----------------------------------------
Classmates Media Communications Total
---------------- -------------- --------

Billable services $25,632 $71,493 $ 97,125
Advertising 22,108 12,184 34,292
---------------- -------------- --------
Total revenues 47,740 83,677 131,417
---------------- -------------- --------

Operating expenses:
Cost of revenue 10,312 20,097 30,409
Sales and marketing 20,874 21,838 42,712
Technology and development 4,124 8,941 13,065
General and administrative 8,233 8,667 16,900
Amortization of intangible
assets 2,743 461 3,204
Restructuring charges - 394 394
---------------- -------------- --------
Total operating expenses 46,286 60,398 106,684
---------------- -------------- --------

Operating income 1,454 23,279 24,733
---------------- -------------- --------

Depreciation 1,925 3,309 5,234
Amortization of intangible
assets 2,743 461 3,204
---------------- -------------- --------
Operating income before
depreciation and
amortization 6,122 27,049 33,171
Stock-based compensation 863 1,911 2,774
Restructuring charges - 394 394
---------------- -------------- --------
Adjusted operating income
before depreciation and
amortization $ 6,985 $29,354 $ 36,339
================ ============== ========

(a) Segment results for the quarter ended June 30, 2007 have been
adjusted to conform with the current segment reporting structure,
which was modified in Q4 2007.

*T

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UNITED ONLINE, INC.
Unaudited Selected Quarterly Historical Key Metrics (a)

June 30, March 31, Dec. 31, Sept. 30, June 30,
2008 2008 2007 2007 2007
-------- --------- --------- --------- --------

Consolidated:
Total pay accounts(b)
(in thousands) 5,725 5,564 5,349 5,239 5,118
Number of employees at
end of period 893 908 928 999 985

Classmates Media:
Segment revenues(d)
(in thousands) $57,013 $51,884 $53,273 $49,972 $47,740
% of Total revenues 46.6% 42.6% 42.5% 39.4% 36.3%

Pay accounts (in
thousands) 3,809 3,521 3,199 2,983 2,710
% of Total pay
accounts 66.5% 63.3% 59.8% 56.9% 53.0%

Segment active
accounts(c) (in
millions) 15.1 13.9 12.6 12.8 11.7

Communications:
Segment revenues(d)
(in thousands) $65,260 $69,927 $72,137 $76,853 $83,677
% of Total revenues 53.4% 57.4% 57.5% 60.6% 63.7%

Pay accounts(b) (in
thousands):
Access 1,560 1,682 1,786 1,886 2,016
Other 356 361 364 370 392
-------- --------- --------- --------- --------
Total
Communications
pay accounts(b) 1,916 2,043 2,150 2,256 2,408
======== ========= ========= ========= ========
% of Total pay
accounts 33.5% 36.7% 40.2% 43.1% 47.0%

Segment active
accounts(e) (in
millions) 2.9 3.1 3.3 3.5 3.7

----------------------------------------------------------------------
(a) More information on the financial results for these quarters can
be found in the company's filings with the Securities and Exchange
Commission.

(b) Growth in pay accounts during the quarter ended September 30, 2007
includes a loss of 18,000 pay accounts resulting from the company's
decision to exit the photo sharing business. Growth in pay accounts
during the quarter ended December 31, 2007 includes a loss of 6,000
pay accounts resulting from the company's decision to exit the VoIP
business.

(c) Classmates Media active accounts represent: all social networking
pay accounts as of the date presented; the monthly average for the
period of all free social networking accounts who have visited the
company's domestic or international social networking Web sites,
excluding The Names Database, at least once during the period; and
the monthly average for the period of all loyalty marketing members
who have earned or redeemed points during such period.

(d) Historical segment results for all periods have been adjusted to
conform with the current segment reporting structure, which was
modified in Q4 2007.

(e) Communications segment active accounts are defined as all
Communications pay accounts as of the date presented combined with
the number of free Communications accounts (access and email users),
excluding free Web hosting accounts, that logged on to the company's
services at least once during the preceding 31 days.
*T

United Online, Inc.
Investors:
Erik Randerson, CFA, 818-287-3350
investor@untd.com
or
Press:
Scott Matulis, 818-287-3388
pr@untd.com

Copyright Business Wire 2008