Sweepstakes site latest acquisition for United Online.Is there life after dial up? United Online Inc. is making a bet on it. The Woodland Hills-based company is picking up the pace in its plan to shift its business away from the low-cost, dial-up Internet service that made it famous. The company recently acquired online sweepstakes company MyPoints.com for $56 million from United Airlines Corp., following the March purchase of social networking site A Web site that provides a virtual community for people interested in a particular subject or just to "hang out" together. Members create their own online "profile" with biographical data, pictures, likes, dislikes and any other information they choose to post. The Names Database The Names Database is a controversial social network, owned and operated by United Online, the parent company of Classmates.com, with headquarters in Orem, Utah. Unlike most social networks, it requires that new registrations include five email addresses. for $10 million. "The writing's on the wall in terms of dialup sort of coming to an end," said Jason Avilio, analyst with First Albany Corp. Low-cost high-speed broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). is the main challenger to the company's cheap dial-up offerings. Its NetZero and Juno Internet service brands are still cash cows Cash Cow 1. One of the four categories (quadrants) in the BCG growth-share matrix that represents the division within a company that has a large market share within a mature industry. 2. for the company, generating monthly fees from 6.4 million subscribers. But the firm hasn't been adding subscribers as it has in the past. "Net subscribers have decreased every quarter for the last four quarters," Avilio pointed out. "They realize that in order to have a business they have to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. into higher growth areas of the market." Those areas include social networking sites like Classmates.com, which the company acquired in 2004, the digital photo-sharing network PhotoSite, online sweepstakes programs and e-marketing sites. The company also launched its own voice over Internet protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (VOIP (Voice Over IP) A digital telephone service that uses the public Internet as well as private backbones instead of the traditional telephone network. Many companies, including Vonage, 8x8 and AT&T (CallVantage), typically offer calling within the country for a ) service last year. (Phone service over Internet fines instead of telephone lines.) The hodge-podge approach has its risks. "They're trying to figure out where to take the business," Avilio said. "VOIP could get pretty expensive trying to compete with eBay and Google or Yahoo and the telecom companies." "Our purchase of MyPoints.com represents another major step forward in United Online's strategy of expanding our growing content and commerce business," said Chief Executive Mark Goldston in a press release. United Online will release earnings on May 3 for the first quarter ended March 31. The company reported net income of $12.4 million on revenues of $120 million for the fourth quarter ended Dec. 31, down from $12.6 million in net income and revenues of $133 million for the prior quarter. |
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