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School's Out at Classmates.com

By Rick Munarriz – Updated Apr 5, 2017 at 11:47PM

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United Online still can't make its Classmates.com site work.

I received an email from United Online's (NASDAQ:UNTD) Classmates.com the other day, informing me that a high school friend had signed up.

This news inspired me at first, because I tend to forget that I even registered for Classmates several years ago. Since this particular classmate wasn't on Facebook, News Corp.'s (NYSE:NWS) MySpace, or even LinkedIn, I figured I'd go see what Classmates is up to.

Why did I even bother?

My high school pal was registered on the site, but I couldn't send him a message, note, or email without becoming a "gold" paying member.

There was also someone who had written on my guestbook in March. It's intentionally blurred out, though I can find out who wrote me if, once again, I become a paying member.

I'm not a cheapskate, and the offer for a "golden" year of membership for $9.95 -- 75% off -- is tempting. However, why would I pay to join a cobweb-riddled community site when I can share notes, photos, videos, and more for free -- and to a much larger audience of friends I grew up with -- through Facebook?

I've been kind to United Online in the past, because it didn't create Classmates. The company behind Juno, NetZero, FTD, and MyPoints.com simply inherited the social-networking pioneer. A failed spinoff attempt later, it's still collecting dust.

In United Online's latest quarter, its Classmates Media subsidiary (which consists of Classmates.com and the MyPoints.com loyalty network) saw a 2% increase in revenue over the previous year. That may seem acceptable given the dot-com calamities elsewhere, but this is a baby step at a time when Facebook is adding millions of new users every month.

So my patience has worn thin here. United Online has had a few years now to mold Classmates into a social-networking site. It will never be Facebook or even MySpace, but if there's room for second-tier social-media players -- Google's (NASDAQ:GOOG) Orkut, Time Warner's (NYSE:TWX) Bebo, and whatever Yahoo! (NASDAQ:YHOO) will open and shutter next -- why not Classmates.com?

It arrived unfashionably early to the party, only to wear the wrong clothes.

There isn't a market for premium social-networking sites that want to reach the masses. If your target audience can be easily reached through free Facebook and its peers, installing tollbooths will only keep mainstream users away.

Tear down the wall, Classmates -- if you ever dream of going public as a standalone entity again.

Where do you think Classmates.com went wrong? Share your thoughts in the comment box below.

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Longtime Fool contributor Rick Munarriz wonders about a few of his former classmates, but not Classmates.com. He owns no shares in any of the companies in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it has some really funky hair in its high school yearbook picture.  

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