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United Online Reports Strong Profts, Acquires Classmates Online

United Online Inc. on Monday reported a 42 percent jump in profits and a 25 percent increase in revenues in the third quarter, but lowered its forecast for the number of paid subscribers it expects by the end of the year.

In addition, the operator of Internet service providers Juno and NetZero said it had agreed to acquire Classmates Online Inc. for $100 million in cash.

The Westlake Village, Calif., company said net income for the quarter ended Sept. 30 was $12.6 million, or 19 cents a share, compared with $8.9 million, or 13 cents a share, in the same period a year ago. Revenues rose to $110.7 million from $88.8 million a year ago.

"Our September quarter financial results were driven by continued telecom cost declines and further expansion of the company's billable services margin," Charles S. Hilliard, executive vice president and chief financial officer for United Online, said in a statement.

Hilliard, however, said the company Internet access business "continued to be impacted by competition and other factors."

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