Shares of United Online (NASDAQ:UNTD), formerly known as NetZero, fell 8.7% to $11.25 Wednesday after the company said it has cancelled the IPO of its Classmates Media property. The IPO was expected to raise over $120 million. The decision to withdraw, apparently due to lack of interest, will cost United $4.5-5.5 million in charges in Q4. "United Online has determined that proceeding with the initial public offering under current market conditions would not be in the best interests of its stockholders," the company said. Classmates Media includes Classmates.com, a social networking site that helps users find old college friends, and MyPoints.com, a shopping site.
Classmates.com predates MySpace and Facebook but has been eclipsed by both, primarily because of its insistence on charging for content. "[T]he Classmates IPO was starting to take on the stench of fraternity row after a night of blowout keggers," Motley Fool's Rick Aristotle Munarriz wrote. "I would have to say the interest [in networking sites] is there," said Sam Snyder of Renaissance Capital. "If this was Facebook and it couldn't get out the door, I'd say the market appetite for social networks was pretty poor. But Classmates.com certainly is not the crown beauty of the space."
Additional Reading: United Online Cancels Classmates IPO
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