Full Description

United Online, Inc. (United Online) is a provider of consumer products and services over the Internet through a number of brands including FTD Group, Inc. (FTD), Interflora, Classmates, MyPoints, NetZero and Juno. The Company operates in three segments: FTD, Classmates Media and Communications. In August 2008, the Company acquired FTD Group, Inc., a provider of floral and related products and services to consumers and retail florists, as well as to other retail locations offering floral and related products and services.

FTD

The Company’s FTD segment includes floral and related products, and services for consumers, retail florists and other retail locations. During the year ended December 31, 2008, the FTD segment accounted for 52.2% of its revenues. FTD and Interflora get floral orders from consumers via the Internet and telephone.

Classmates Media

The Company’s Classmates Media services include online social networking under the Classmates brand and online loyalty marketing under the MyPoints brand. Its Classmates Media services also include international social networking under the Trombi and StayFriends brands. On its social networking Websites, the Company enables users to locate and interact with acquaintances from their past, with school affiliations as the primary focus. Led by its principal Classmates Website (www.classmates.com) that serves the United States and Canada, its social networking properties consists of a diverse population of users, with over 50 million registered accounts during the year ended December 31, 2008.

Using United Online’s interactive tools and features, members have contributed to its social networking Websites a number of pieces of content, such as names, school affiliations, profiles, biographies, interests and photos. Its social networking members can choose between free membership and a paid subscription offering additional features. Free accounts constitute the majority of its social networking accounts. Revenues from the Company’s social networking services are derived from subscription fees and advertising fees. United Online had approximately 4.3 million social networking pay accounts at December 31, 2008.

Basic membership on its Classmates Website is free and provides members with access to a number of interactive features. Visitors to Classmates can become free members by completing the registration process and providing their name, year of birth, graduation year, and an e-mail address. Free members are required to affiliate with at least one high school, college, work or military community. In addition, free members can elect to provide information about their personal interests and post photos.

Free members can use the search feature to locate individuals within communities of interest and to browse the member database, which is differentiated by high school, college, workplace or military unit. Free members can post information about themselves, including personal profiles, biography information, photos, affiliations, timelines, bulletin board messages and answers to the multiple choice questions about life, love, family and hobbies. Free members have access to messages posted on, the Company’s interest group message boards encompassing a range of topics, including college life, fraternities and sororities, sports, politics, travel, hobbies, current events and family life. Free members have the ability to send double-blind e-mails (where e-mail addresses are not visible to the e-mail sender or recipient) through the Company’s Website to other Classmates members and respond to e-mail messages received from its paying subscribers.

Gold membership on the Company’s Classmates Website is a paid subscription service that provides members with access to all of the features of a free membership, as well as several additional features. The Company’s digital guestbook alerts a Classmates member when another member visits his or her profile, if the visiting member chooses to leave his or her name. Paying members have the ability to send double-blind e-mails through its Website to other Classmates members and respond to e-mail messages from any other Classmates member, whether a free member or a paying subscriber.

In addition to the Company’s Classmates Website, the Company operates five international social networking services. It operates StayFriends (www.stayfriends.se) in Sweden, Trombi (www.trombi.com) in France, StayFriends (www.stayfriends.de) in Germany, StayFriends in Austria (www.stayfriends.at) and Klassenfreunde (www.klassenfreunde.ch) in Switzerland. Each service is similar to its Classmates service, although their affiliations are focused only on schools.

MyPoints connects advertisers with the Company’s members by allowing members to earn rewards points for engaging in online activities. MyPoints is a free service and users need only provide their name, zip code, gender, date of birth and an e-mail address to register. Members register to receive direct e-mail marketing and other online loyalty promotions, and earn points for responding to e-mail offers, taking market research surveys, shopping online and engaging in other online activities. Rewards points are redeemable primarily in the form of third-party gift cards from over 70 merchants, including retailers, theaters, restaurants, airlines and hotels. Participating merchants include, among others, Amazon.com, iTunes, Marriott, Macy's and Target.

Communications

The Company’s Communications pay services are dial-up Internet access and e-mail primarily under the NetZero and Juno brands. It also offers broadband services, Internet security services, Web hosting services and e-mail. In total, the Company had 1.7 million Communications pay accounts at December 31, 2008.

Internet access services consist of dial-up and, to a much lesser extent, broadline services. The dial-up Internet access services are provided on both a free and pay basis, with the free services subject to hourly and other limitations. Basic pay dial-up Internet access services include Internet access and an e-mail account, although it also offers an enhanced e-mail service as a standalone pay service. In addition, the Company offers dial-up Internet access services. Its dial-up Internet access services are also bundled with additional benefits, including pop-up blocking, antivirus software and enhanced e-mail storage. Its dial-up Internet access services are available in more than 11,000 cities across the United States and Canada.

The Company competes with 1-800-FLOWERS.COM, Inc., Proflowers.com, Marks & Spencer, NEXT, John Lewis, Teleflorist, Flowers Direct, Facebook, MySpace, LinkedIn, Reunion.com, Yahoo!, MSN, AOL, White Pages, US Search, EarthLink, Comcast and AT&T.