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Classmates.com Fails to Score IPO

Posted Dec 13, 07 1:07 AM CST in Business,  Technology 

(Newser) – Classmates.com received an early dismissal today after its owners withdrew a planned IPO for the social networking site. United Online cited turbulent market conditions, but analysts say the real reason is waning popularity of the site and its overpriced offering. The interest in IPOs is there, one analyst explained, “but Classmates.com certainly is not the crown beauty of the space.”

The number of IPOs priced this year jumped 26% from last year, Wired reports. United said pulling the IPO will cost $4.5-$5.5M in Q4, and things aren’t looking much better for Classmates.com, which is in a catfight with Facebook. Another analyst predicted its subscriber base would peak next year and then deteriorate in “a steady decline to zero by 2012.”

Sources: Wired, Barron's, New York Times

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