Classmates.com 2004 Annual Report Download - page 5

ITEM 1. BUSINESS
OVERVIEW
We are a leading provider of consumer Internet subscription services through a number of brands, including NetZero, Juno, and Classmates
Online. Our pay services include dial-up Internet access, community-based networking, personal Web-hosting, and premium email services,
among others. We also offer, at no charge, advertising-
supported versions of certain of our services. In addition, we offer marketers a broad array
of Internet advertising products, including online market research and measurement services.
At December 31, 2004, we had approximately 4.8 million pay accounts representing approximately 6.0 million total subscriptions, and
approximately 15.2 million active accounts. A pay account represents a unique billing relationship with a customer who subscribes to one or
more of our pay services. "Active" accounts include total pay accounts as well as free users who have logged onto our access, community-based
networking or email services during the preceding 31 days. Active accounts also include those free hosted Web sites that have received at least
one visit during the preceding 90 days.
United Online is a Delaware corporation that commenced operations in 2001 following the merger of Internet access providers
NetZero, Inc. and Juno Online Services, Inc. (the "Merger"). During 2004, we completed the acquisitions of Classmates Online, Inc.
("Classmates"), a leading provider of community-based networking services, and the Web-hosting and domain name registration business of
About Web Services, Inc. Our corporate headquarters are located in Woodland Hills, California.
Consumer Brands and Services
We offer a variety of consumer Internet services under a number of brands, both free of charge and subscription-based, which include the
following:
Internet Access: NetZero, Juno and BlueLight Internet;
Community-Based Networking: Classmates, StayFriends and Klasstraffen;
Web Hosting: FreeServers, 50megs, Bizhosting and Global Servers; and
Premium Email: NetZero MegaMail, Juno MegaMail and EmailMyName.
Internet Access
Our standard pay access services include Internet access and an email account and are offered through various pricing plans, generally
$9.95 per month. We also offer "accelerated" access services, generally for an additional $5.00 per month, or a total monthly charge of $14.95.
Our accelerated access services utilize compression, caching and other technologies that reduce the time for certain Web pages to download to
users' computers when compared to our standard access services. The price for our accelerated access services also includes certain additional
benefits such as pop-up blocking capabilities and enhanced email storage when compared to our standard services. Internet access comprised
approximately 3.1 million of our pay accounts at December 31, 2004, of which approximately 36% also subscribed to our accelerator services.
We count a subscriber to our accelerator services as one pay account and two subscriptions, one for the Internet access and another for the
accelerator. The NetZero and Juno pay access services differ from their respective free access services in that the hourly and certain other
limitations set for the free services do not apply. In addition, the free access services incorporate certain advertising initiatives, including a
persistent advertising banner, not present on the pay services. We do not offer free access services under the BlueLight brand. Our access
services are available in more than 8,200 cities across the United States and Canada.
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