United Online CEO to Step Down

United Online Chief Executive Francis Lobo announced on Tuesday he was resigning from his position with the Woodland Hills company. Lobo was appointed chief executive of the Internet service provider and e-commerce and loyalty program operator just two years ago with the mission of turning around the struggling company. His last day will be Nov. 18. Chairman Howard Phanstiel has been named as principal executive officer in the interim. “I certainly look forward to following the progress of United Online from the sidelines,” Lobo said Tuesday during a conference call with analysts. “I remain this team’s biggest fan.” Lobo made the announcement the same day as United Online reported its third quarter financial results in which it beat Wall Street estimates on earnings but fell short on expectations for revenue in the third quarter, even as it plans to sell another website. The company reported net income of $26 million ($1.69 a share) for the quarter ending Sept. 30, compared with net income of $206,000 (1 cent) in the same period a year earlier. Revenue dropped 9 percent to $36.3 million. One analyst who follows the company expected net income of 15 cents a share on revenue of $36.5 million, according to Thomson Financial Network. During the quarter, United Online sold off its social media business Classmates.com to Intelius Holdings Inc. in a deal valued at $30 million. Intelius, in Bellevue, Wash., offers search, reverse people lookup, background checks and identity theft protection. On Tuesday, the company said it was now in the process of looking for a buyer for StayFriends, a social media site that operates in Europe. Lobo said the sale of those businesses narrows the focus of United Online to the high-growth commerce and loyalty space. United Online operates a loyalty marketing service MyPoints where consumers earn points that can be redeemed for gift cards or other rewards from retailers, restaurants and travel partners. “This vertical continues to grow at an impressive clip and we believe United Online is well positioned to capture this growth given our large and engaged user base and mobile focus,” Lobo said in a prepared statement. Shares closed up 3 cents, or a fraction of a percent, to $11.51 on the Nasdaq.