Time Machine

Showing again its ability to adapt to the ever-changing Internet market, United Online has taken a Web site that was essentially made obsolete by Facebook and transformed it into something very different and hopefully marketable. But the creation of Memory Lane hasn’t been easy. Both the trademark and domain name of Memory Lane was taken and United Online chief executive Mark Goldston and others thought it would be impossible to get. Other names were suggested. “Take a Trip” was one of the rejected names. So was “This is Your Life.” In the end the Woodland Hills-based online services and products company was able to get Memory Lane, just part of its investment in transforming and expanding the Classmates.com brand from one based on the personal past of its users ages 35 years old and up to one based on a collective past. United Online would pay out $8 million to $10 million to collect the 100 million pieces of content – photos, videos, music, digitized magazines from 1940 to 1999 – found at Memory Lane, the new name for the Classmates.com business unit. The past may be prologue, as Shakespeare once wrote, and it is also big business. Nostalgia-based films and television shows have proven to be hugely successful, whether it is “Back to the Future” or “Mad Men.” The appeal of youthful days and simpler times is what Memory Lane taps into and the collection at the site will only grow. In May, for instance, the site will make available 300 episodes of “The Tonight Show” when Johnny Carson was the host. “It’s not like nostalgia will be over,” Goldston said. Re-energizing site Memory Lane uses the past to put new life into a site that was in decline. If visitors take to the video and music clips, movie trailers, digitized yearbooks and other content it puts United Online further on the path of moving away from its roots as an Internet service provider. Technology has advanced since the company was founded out of the ashes of Web 1.0 with the merger of dial-up providers Net Zero and Juno. While those two brands are still the core of United Online it is the FTD division with its floral products and services that brings in the most revenue. That acquisition in 2008 could be seen as the first step in how United Online has redefined itself in a changing market. Now with the new website there is another adaptation to how the online world has changed when it comes to social media sites. “The way you want to look at United Online is they have great marketing expertise and they are applying that to different areas on the Internet and see what the value is,” said Yun Kim, an analyst with Gleacher & Co. in New York. The F word Any discussion about the direction of Classmates.com cannot take place without mention of Facebook. There has been much discussion by Goldston and other executives about how to keep Classmates relevant in a Facebook world. This despite that Classmates.com was one of the first social media sites, started in 1995 when Facebook founder Mark Zuckerberg was all of 11 years old. United Online acquired the site in 2004. Classmates would eventually attract 55 million registered users although only a fraction of those are paid subscribers. While successful in pairing up old high school friends, the site fell short with any other content that would keep visitors for an extended period or that could be monetized. Even Goldston admitted that one of the frequent criticisms of the site was there was not much to look at or do at the site. “I think we would all agree that is probably not the right model for social media sites,” said George Sutton, a senior research analyst for Craig-Hallum Capital Group. By incorporating Classmates.com into the larger site there is now more for visitors to do and a big part of that is in the 70,000 yearbooks that United Online has purchased and digitized for visitors to flip through. Additional yearbooks will bring that number to 100,000 and there will be a service to make copies of the yearbooks and other printed materials. Making the yearbooks and other content available has all but addressed the relevancy factor in a Facebook world as far as Goldston is concerned. “We don’t have that issue anymore with a unique, compelling business proposition that is the only website of its kind,” he said. Considering the size of the extensive collection available at Memory Lane what is all the more remarkable was that the new site came together in less than a year while Classmates.com continued to operate. Creating the memory A year ago, Classmates was taking it on the chin by losing its president, competition from other sites and difficulties in getting the paid subscribers in the numbers the company’s leaders wanted. So in April, the Classmates.com team, based in Seattle, began designing the new site with a target date of Feb. 23, 2011 when it would go live. The process included collecting the thousand upon thousands of content. Some of the magazines displayed at the site – Look, Saturday Evening Post, and Sport – had not been digitized. In weekly meetings, Goldston in the Valley and the Classmates team in Seattle reviewed color-coded status sheets on the material: green for signed agreements; yellow for pending agreements; and white for the items they still wanted. “They are starting well,” Sutton said. “Trying to predict the success of a site is challenging.” The new site allows the change to make corrections for what didn’t work with Classmates.com, namely the subscription plans. Recognizing that some visitors may not want to commit to a long-term plan, Memory Lane offers access for a one-time visit, a 24-hour period and a month in addition to three, 12 and 24 month subscriptions that are a holdover from Classmates. There is the e-commerce function by selling copies of the yearbooks, single pages or entire issues of the old magazines, and, through Amazon, DVDs of movies. The site is supported by advertising as well. Monetizing the site in multiple ways is pleasing to investors. “From our point of view there is a lot more to the business model than selling subscriptions,” Kim said. In searching for a new president for the division, Goldston wanted someone familiar with running a website combining advertising, e-commerce and subscriptions. While it was not easy, he found those skills in Howard Zeitz, who started a week before Memory Lane launched. Zeitz served as a senior vice president at International Game Technology, Chief Operating Officer of the Games Division of RealNetworks, and Chief Operating Officer and Chief Marketing Officer at online brokerage ShareBuilder Corporation.