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United Online Inc. reports new broadband deal and declining revenues

Woodland Hills-based United Online Inc. announced Wednesday it is adding a new mobile 4G wireless broadband service as its communications revenue — largely derived from dial-up Internet access — continues to decline. United Online has signed a five-year wholesale agreement with Bellevue, Wash.-based broadband provider Clearwire to provide customers with 4G high-speed mobile broadband service under United’s NetZero brand, according to a news release announcing the deal. The service, available through Clearwire’s network, is expected to be available in early 2012. Financial details of the agreement were not disclosed. “We believe this deal with Clearwire will give us the ability for the first time to bring affordably-priced, 4G high-speed mobile broadband service with 6 mbps to 10 mbps speed to the masses,” Mark R. Goldston, chief executive of United Online, said in a statement. United Online also announced its third quarter results on Wednesday. The Valley firm reported revenue of $182.7 million, down 6 percent from the same period last year. The drop off was in large part due to a $10 million revenue decline in United’s communication segment to which NetZero belongs. In United’s second quarter filing, the company said most of its communications revenues come from an aging technology such as dial-up Internet. In the third quarter, United saw $20.2 million in operating income, down from $25.6 million during the same period last year. Net income attributable to common stockholders remained unchanged, standing at $11.4 million, the firm reported. While United currently offers broadband services, the high-speed Internet is purchased from third parties and resold under United’s brand, according to the company’s second quarter filing. “These services are primarily used as a means to retain users who are leaving our dial-up Internet access services and we have conducted very limited marketing of our broadband Internet access services to the general public,” United said in its second quarter filing. Internet users can gain access to the new 4G broadband service by purchasing either a NetZero USB modem or a NetZero personal hotspot and then gain access through their computers, tablets or smart phones, the news release said.

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