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Will Facebook Kill Classmates.com?
By Mark Evans | August 16, 2007
Classmates.com’s plan to raise $125-million through an IPO is curious for a variety of reasons. The biggest question is why now at a time when the capital markets are increasingly volatile.
Other than Classmates’ parent, United Online, wanting to get $50-million of debt repaid, the biggest motivation for the IPO may be the growing threat that Facebook is going to eat Classmates.com’s lunch. After all, why pay for Classmates if you can get many of the same benefits and services (connecting with friends, high school and university alumni, etc.) when you can use Facebook for free?
With 50 million registered users, 2.7-million subscribers, $152.1-million of revenue last year and a solid brand name, Classmates appears to be a solid business. But if I was betting on the next hot social networking tool for high school and university graduates to keep touch with friends, I’d put my money on Facebook. Of course, you’ll have to wait for Facebook’s IPO to put money on it. Classmates’ filing with the SEC can be found here.
For more thoughts, check out ZDNet. As well, allfacebook talks about how the impact of Classmates’ IPO on a possible Facebook IPO, although his math is wrong. Paul La Monica suggests Classmates’ IPO will be a litmus test for other social networking such as Reunion.com and LinkedIn.com, which may have aspirations to doing a public offering as well.
Technorati Tags: Classmates.com, Facebook
Topics: Web-based Services |
