United Online Reports First-Quarter 2005 Results and Initiates Quarterly Cash Dividend




                  Record Revenues of $130.5 Million
               Record Operating Income of $21.0 Million
                Record Adjusted OIBDA of $31.5 Million
              Quarterly Cash Dividend of $0.20 per Share

WOODLAND HILLS, Calif., May 3, 2005 (PRIMEZONE) -- United Online, Inc. (Nasdaq:UNTD), a leading provider of consumer Internet subscription services, today reported results for its first quarter ended March 31, 2005. The company also announced that its Board of Directors has approved the initiation of a quarterly cash dividend of $0.20 per share of common stock.

The first quarterly cash dividend is payable on May 31, 2005 to shareholders of record as of the close of business on May 13, 2005. While the company intends to pay regular quarterly dividends for the foreseeable future, the declaration and payment of future dividends are discretionary and will be subject to determination by the Board of Directors each quarter following its review of the company's financial performance.



 Summary of March 2005 Quarter Results:
 --------------------------------------

 -- Total revenues for the quarter were a record $130.5 million,
    up 21% versus $107.7 million for the year-ago quarter.

 -- Operating income for the quarter was a record $21.0 million,
    or 16.1% of revenues, up 5% versus operating income of
    $19.9 million, or 18.5% of revenues, in the year-ago quarter.

 -- Adjusted operating income before depreciation and amortization
    ("OIBDA")(1) for the quarter was a record $31.5 million, or
    24.1% of revenues, an increase of 21% versus adjusted OIBDA of
    $26.0 million, or 24.1% of revenues, in the year-ago quarter.

 -- Pay accounts(2) increased by 126,000 during the quarter to
    4.95 million; subscriptions(3) increased by 214,000 to
    6.2 million; active accounts(2) totaled 17.0 million at
    March 31, 2005.

 -- Net income for the quarter was $11.5 million, or $0.18 per
    share, versus $12.4 million, or $0.18 per share, for the
    year-ago quarter.

 -- Adjusted net income(4) for the quarter was $16.2 million,
    an increase of 7% versus adjusted net income of $15.2 million
    for the year-ago quarter.  On a per share basis, adjusted net
    income for the quarter was $0.25 per share, an increase of
    9% versus adjusted net income of $0.23 per share, for the
    year-ago quarter.  Adjusted net income is calculated in a
    manner consistent with the analyst consensus estimate as
    reported by First Call.

 -- Cash flows from operations were $31.7 million for the quarter,
    versus $34.8 million for the year-ago quarter.

 -- Free cash flow(5) for the quarter was $28.2 million, versus
    $33.8 million for the year-ago quarter.

"With our 15th consecutive quarter of record revenues and adjusted OIBDA, 2005 is off to an excellent start for United Online," said Mark R. Goldston, chairman, CEO and president of United Online. "We are pleased with the progress of our diversification strategy, which contributed significantly to our growth in the first quarter. With United Online's quarterly advertising revenues up 43% year-over-year, we are also pleased to announce the launch of the United Online Advertising Network, which will consolidate advertising sales across all of our Internet properties giving advertisers additional reach, scale and efficiency. We have also formed United Online Web Services, which is dedicated to integrating our existing web hosting, domain registration, premium email, premium content and PhotoSite products into our access and Classmates businesses. We believe that these initiatives, along with our planned VoIP launch during the second half of 2005, offer new, innovative ways to leverage our large user base and portfolio of Internet properties."

"Our strong first quarter financial results reflect growing revenue contribution from non-access businesses, positive seasonality for access and planned increases in product development," said Charles S. Hilliard, executive vice president and CFO of United Online. "Pay access accounts grew by a net 30,000 during Q1, representing less than 24% of total pay account growth for the quarter. Our modest increase to 2005 adjusted OIBDA guidance reflects our solid first quarter performance and planned investment spending on diversification initiatives for the remainder of the year.

"The Board's decision to return capital to shareholders via a dividend complements our existing share repurchase program and reflects confidence in United Online's strong cash flows," added Charles S. Hilliard. "Importantly, we continue to allocate capital to new research and development at a record pace."



 Additional Highlights:
 ----------------------

 -- Billable services margin(6) was a record 79.0% for the
    March 2005 quarter, up from 73.8% for the year-ago quarter.

 -- Annualized revenue per average employee(7) was $691,000 for
    the March 2005 quarter, versus $859,000 for the
    March 2004 quarter.

 -- Cash balances at March 31, 2005 were $203.0 million, including
    cash, cash equivalents and short-term investments.  During the
    quarter, the company repaid $30.8 million of its senior term
    loan facility, bringing the balance of the facility to
    $69.2 million at March 31, 2005.

 -- The company repurchased 1.3 million shares of its common stock
    in the March 2005 quarter at an aggregate cost of $14.2 million.
    The company can repurchase up to an additional $60.8 million of
    its common stock under a Board-approved program, which has
    recently been extended through December 31, 2006.

 -- In March 2005, United Online acquired certain assets related
    to PhotoSite, the online digital photo-sharing business of
    Homestead Technologies, Inc., for approximately $10 million in
    cash and has entered into a related licensing and support
    agreement with Homestead Technologies. Due to a transition
    period associated with the asset purchase, the approximately
    6,000 subscribers to the digital photo-sharing business will
    not be included in the company's pay accounts until the June 
    2005 quarter.

 Business Outlook:
 -----------------
 The following forward-looking information includes certain
 projections made by management as of the date of this release. United
 Online does not intend to revise or update this information and may
 not provide this type of information in the future. Due to a variety
 of factors, actual results may differ significantly from those
 projected. Factors include, without limitation, the factors
 referenced later in this announcement under the caption "Cautionary
 Information Regarding Forward-Looking Statements." These and other
 factors are discussed in more detail in the company's filings with
 the Securities and Exchange Commission.

 Following is the company's current guidance for the June 2005 quarter
 and the year ending December 31, 2005:

                      -------------   -------------   ----------------
 (in millions)        June'05 Q Est.    CY'05 Est.    Prior CY'05 Est.
                      -------------   -------------   ----------------
 Operating income     $19.1 - $20.1   $80.2 - $85.2     $84.1 - $91.1
  Depreciation             3.7            15.0              16.7
  Amortization             5.8            22.2              19.9
  Stock-based charges      2.9             9.6               3.3
                      -------------   -------------   ----------------
 Adjusted operating
  income before
  depreciation and
  amortization(1)     $31.5 - $32.5  $127.0 - $132.0   $124.0 - $131.0
                      -------------   -------------   ----------------
 Weighted average
  diluted shares       64.5 - 65.0     65.0 - 66.0       65.0 - 66.0

  -- Total revenues for the June 2005 quarter are estimated to be
     between $130 million and $132 million.

  -- The company estimates that total pay accounts will be between
     4.95 million and 5.0 million by June 30, 2005.

 (1) Adjusted operating income before depreciation and amortization
     (adjusted OIBDA) is defined as operating income before
     depreciation, amortization and stock-based compensation.
     Management believes that because adjusted OIBDA excludes certain
     items that do not impact the company's cash flows, this measure
     provides investors with additional useful information to measure
     the company's performance, particularly with respect to changes
     in performance from period to period, and to assess the company's
     ability to make capital expenditures, fund working capital
     requirements, incur and repay indebtedness, and fund strategic
     initiatives. Management also uses adjusted OIBDA for these
     purposes, as well as to allocate resources in managing the
     company's business. The company's Board of Directors uses this
     measure in determining certain compensation incentives for
     certain members of the company's management. Adjusted OIBDA is
     not determined in accordance with generally accepted accounting
     principles (GAAP) and should be considered in addition to, not as
     a substitute for or superior to, financial measures determined in
     accordance with GAAP. Reconciliations to the most directly
     comparable GAAP financial measure are provided in the
     accompanying tables.

 (2) A pay account represents a unique billing relationship with a
     customer who subscribes to one or more of the company's services.
     A pay account does not equate to a unique subscriber since one
     subscriber could have several pay accounts. Active accounts are
     defined as all free access, community-based network and email
     users that logged on to our services at least once during the
     preceding 31 days, together with all pay accounts. Additionally,
     active accounts include the number of free Web sites that
     received at least one unique visitor within the preceding 90
     days. A table entitled "Analysis of Pay Accounts and
     Subscriptions" is presented elsewhere in this release.

 (3) A subscription represents a unique subscription to any
     individual pay service offered by the company. Internet access
     and accelerated dial-up are counted as two subscriptions,
     although most subscribers to the accelerated service purchase it
     bundled with our standard Internet access. A table entitled
     "Analysis of Pay Accounts and Subscriptions" is presented
     elsewhere in this release.

 (4) Adjusted net income is defined as net income before the
     after-tax effect of amortization of intangible assets and
     stock-based compensation. Management believes that adjusted net
     income provides investors with additional useful information to
     measure the company's financial performance, particularly from
     period to period, exclusive of certain non-cash expenses which
     management believes are not reflective of the company's core
     operating results over time. Management also uses adjusted net
     income for these purposes. Adjusted net income is not determined
     in accordance with generally accepted accounting principles
     (GAAP) and should be considered in addition to, not as a
     substitute for or superior to, financial measures determined in
     accordance with GAAP. Reconciliations to the most directly
     comparable GAAP financial measure are provided in the
     accompanying tables.

 (5) Free cash flow is defined as net cash provided by operating
     activities before cash paid for relocation costs, less capital
     expenditures. Management believes that free cash flow provides
     investors with additional useful information to measure operating
     liquidity because it reflects the company's operating cash flows
     after investing in capital assets, and excludes the cash impact
     of items which management believes are not reflective of the
     company's core operating results over time. This measure is used
     by management, and may also be useful for investors, to assess
     the company's ability to generate cash flow for a variety of
     strategic opportunities, including reinvestment in the business,
     effecting potential acquisitions, strengthening the balance
     sheet, and effecting share repurchases. Free cash flow is not
     determined in accordance with generally accepted accounting
     principles (GAAP) and should be considered in addition to, not as
     a substitute for or superior to, financial measures determined in
     accordance with GAAP. Reconciliations to the most directly
     comparable GAAP financial measure are provided in the
     accompanying tables.

 (6) Billable services margin represents billable services revenues
     less cost of billable services divided by billable services
     revenues.

 (7) Annualized revenue per average employee represents annualized
     total revenues for the period divided by the average number of
     employees during that period.

About United Online

United Online, Inc. (Nasdaq:UNTD) is a leading provider of consumer Internet subscription services through a number of brands, including NetZero, Juno and Classmates. The company's services include Internet access, accelerated dial-up services, premium email, personal web hosting, domain services, photo sharing services and community-based networking. The company's access services are available in more than 8,200 cities across the United States and in Canada. At March 31, 2005, United Online had 769 employees worldwide. United Online is headquartered in Woodland Hills, CA, with offices in New York City, NY; Renton, WA; San Francisco, CA; Orem, UT; Munich, Germany; Jarfalla, Sweden; and Hyderabad, India. For more information about United Online and its Internet subscription services, please visit http://www.untd.com.

United Online will be hosting a conference call today at 2:00PM PT (5:00PM ET) to discuss its quarterly results. A live Web cast of the call can be accessed on the Investors section of the company's Web site at www.untd.com. A recording of the call will be available on the site for seven days.

Cautionary Information Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements containing words such as "guidance," "may," "believe," "will," "expect," "project," "projections," "business outlook" and "estimate" or similar expressions constitute forward-looking statements. These statements include, without limitation, expectations regarding: guidance for future financial performance; changes in pay accounts; weighted average diluted shares; depreciation and amortization; and stock-based compensation. Actual results may differ materially from those predicted and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: the effect of competition, including adoption of broadband services and changes in the company's pricing or competitors' pricing, and the use of promotional offers to acquire or retain subscribers; the company's inability to retain its existing subscribers and the rate at which new subscribers sign up for the company's services; changes in the mix of pay accounts; the effects of seasonality and changes in Internet usage; changes in the projected number of weighted average diluted shares due to the issuance of stock and stock options, stock repurchases, fluctuations in the company's stock price or other factors; changes in the projected amortization and depreciation figures due to capital spending or other factors; changes in usage by subscribers, additional telecommunications costs or other factors negatively impacting the company's billable services margin; changes in active accounts; the company's inability to maintain its agreements with telecommunications providers on attractive terms; the company's ability to successfully integrate acquisitions, including Classmates Online and PhotoSite; problems associated with the company's billing systems; the company's inability to retain key customers and key personnel; unanticipated technological problems or developments; risks associated with litigation; and unanticipated governmental regulation. From time to time, the company considers acquisitions that, if consummated, could be material. Forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition is consummated during the relevant periods. If an acquisition were consummated, actual results could differ materially from any forward-looking statements. More information about potential factors that could affect the company's business and financial results is included in the company's annual and quarterly reports filed with the Securities and Exchange Commission (http://www.sec.gov), including, without limitation, information under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors."



                          UNITED ONLINE, INC.
                 Condensed Consolidated Balance Sheets
                            (in thousands)

                                       March 31,        December 31,
                                         2005               2004
                                       ---------          ---------
                                      (unaudited)
 ASSETS
  Cash, cash equivalents and 
   short-term investments              $ 203,046          $ 232,793
  Accounts receivable, net                17,237             17,534
  Deferred tax assets, net                75,587             76,203
  Property and equipment, net             26,888             27,006
  Goodwill and intangible assets, net    156,805            147,016
  Other assets                            15,962             19,300
                                       ---------          ---------
    Total assets                       $ 495,525          $ 519,852
                                       =========          =========
 LIABILITIES AND STOCKHOLDERS' 
  EQUITY
  Accounts payable                     $  41,232          $  45,379
  Accrued liabilities                     21,602             18,320
  Deferred revenue                        55,713             50,954
  Capital leases                           1,031              1,319
  Term loan                               69,167            100,000
  Other liabilities                        3,006              2,181
                                       ---------          ---------
    Total liabilities                    191,751            218,153
                                       ---------          ---------
  Stockholders' equity                   303,774            301,699 
                                       ---------          ---------
    Total liabilities and 
     stockholders' equity              $ 495,525          $ 519,852
                                       =========          =========

 
                          UNITED ONLINE, INC.
            Unaudited Consolidated Statements of Operations
               (in thousands, except per share amounts)

                                         Three Months Ended March 31,
                                        -----------------------------
                                           2005                2004
                                        ---------           ---------
 Revenues:
  Billable services                     $ 116,229           $  97,682
  Advertising and commerce                 14,302               9,993
                                        ---------           ---------
    Total revenues                        130,531             107,675
 Operating expenses:
  Cost of billable services                24,401              25,580
  Cost of free services                     3,353               1,725
  Sales and marketing                      53,983              43,035
  Product development                       9,043               6,101
  General and administrative               11,713               6,863
  Stock-based compensation(1)               1,075                 477
  Amortization of intangible
   assets                                   5,978               3,964
                                        ---------           ---------
    Total operating expenses              109,546              87,745
                                        ---------           ---------
 Operating income                          20,985              19,930
 Interest and other income, net             1,417               1,489
 Interest expense                          (2,002)               (283)
                                        ---------           ---------
 Income before income taxes                20,400              21,136
  Provision for income taxes                8,913               8,775
                                        ---------           ---------
 Net income                             $  11,487           $  12,361
                                        =========           =========
  Basic net income per share            $    0.19           $    0.20
                                        =========           =========
  Diluted net income per share          $    0.18           $    0.18
                                        =========           =========
  Shares used to calculate basic
   net income per share                    60,393              62,470
                                        =========           =========
 Shares used to calculate diluted
  net income per share                     63,038              67,352
                                        =========           =========
 Shares outstanding at end of
  period                                   60,669              61,850
                                        =========           =========

 (1) Stock-based compensation
     is allocated as follows:

     Cost of billable services          $      25           $      --
     Sales and marketing                      100                  83
     Product development                       63                  --
     General and administrative               887                 394
                                        ---------           ---------
      Total stock-based
       compensation                     $   1,075           $     477
                                        =========           =========

                          UNITED ONLINE, INC.
       Unaudited Condensed Consolidated Statement of Cash Flows
                            (in thousands)

                                                  Three Months Ended
                                                      March 31, 
                                                 --------------------
                                                   2005        2004
                                                 --------    --------
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income:                                     $ 11,487    $ 12,361
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation, amortization and
    stock-based compensation                       10,527       6,039
   Deferred taxes, tax benefits and other           3,840       7,291
 Change in operating assets and liabilities
  (excluding the effects of acquisitions):
   Accounts receivable                                295       2,519
   Other assets                                     2,986       1,917
   Accounts payable and accrued liabilities        (2,856)      2,001
   Other liabilities                                  825          --
   Deferred revenue                                 4,581       2,657
                                                 --------    --------
    Net cash provided by operating activities      31,685      34,785
                                                 --------    --------
 CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of short-term investments             (98,317)    (76,113)
  Proceeds from maturities and sales of
   short-term investments                         115,858      94,051
  Purchases of rights, patents and trademarks      (5,500)        (11)
  Cash paid for acquisitions                       (8,540)         --
  Purchases of property and equipment              (3,455)     (1,005)
                                                 --------    --------
    Net cash provided by investing activities          46      16,922
                                                 --------    --------
 CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on capital leases                         (288)         --
  Payments on term loan                           (30,833)         --
  Repurchases of common stock                     (14,207)    (48,706)
  Proceeds from exercises of stock options          1,821         914
                                                 --------    --------
   Net cash used for financing activities         (43,507)    (47,792)
                                                 --------    --------
  Effect of exchange rate changes on cash
   and cash equivalents                               (14)         --
 Change in cash and cash equivalents              (11,790)      3,915
 Cash and cash equivalents, beginning of period    56,512       8,908
                                                 --------    --------
 Cash and cash equivalents, end of period        $ 44,722    $ 12,823
                                                 ========    ========

                          UNITED ONLINE, INC.
        Reconciliation of Net Income to Adjusted Net Income(4)
                 (in thousands, except per-share data)

                  Three Months Ended           Three Months Ended
                      March 31, 2005           March 31, 2004
             ---------------------------- ---------------------------
                       Adjust-                      Adjust-
             Reported   ments    Adjusted Reported   ments   Adjusted
             -------- --------   -------- -------- --------  --------
 Revenues:

 Billable 
  services   $116,229 $   --     $116,229 $ 97,682 $    --   $ 97,682
 Advertising
  and
  commerce     14,302     --       14,302    9,993      --      9,993
             -------- --------   -------- -------- --------  --------
   Total
    revenues  130,531     --      130,531  107,675      --    107,675
 Operating
  expenses:
  Cost of
   billable
   services    24,401     --       24,401   25,580      --     25,580
  Cost of
   free
   services     3,353     --        3,353    1,725      --      1,725
  Sales and
   marketing   53,983     --       53,983   43,035      --     43,035
  Product
   development  9,043     --        9,043    6,101      --      6,101
  General and
   adminis- 
   trative     11,713     --       11,713    6,863      --      6,863
  Stock-based
   compensa-
   tion         1,075 (1,075)(a)      --       477   (477)(a)     --
  Amortiza-
   tion of
   intangible
   assets       5,978 (5,978)(b)      --     3,964 (3,964)(b)     --
             -------- --------   -------- -------- --------  --------
   Total
    operating
    expenses  109,546   (7,053)   102,493   87,745   (4,441)   83,304
             -------- --------   -------- -------- --------  --------
 Operating
  income       20,985    7,053     28,038   19,930    4,441    24,371
 Interest and
  other
  income, net   1,417      --       1,417    1,489      --      1,489
 Interest
  expense      (2,002)     --      (2,002)    (283)     --       (283)
             -------- --------   -------- -------- --------  --------
 Income
  before
  income
  taxes        20,400    7,053     27,453   21,136    4,441    25,577
 Provision
  for income
  taxes         8,913  2,315(c)    11,228    8,775  1,609(c)   10,384
             -------- --------   -------- -------- --------  --------
 Net income  $ 11,487 $  4,738   $ 16,225 $ 12,361 $  2,832  $ 15,193
             ======== ========   ======== ======== ========  ========
 Basic net 
  income per 
  share      $   0.19            $   0.27 $   0.20           $   0.24
             ========            ======== ========           ========
 Diluted net 
  income per 
  share      $   0.18            $   0.25 $   0.18           $   0.23
             ========            ======== ========           ========
 Shares used 
  to 
  calculate 
  basic net 
  income per 
  share        60,393              60,393   62,470             62,470
             ========            ======== ========           ========
 Shares used 
  to 
  calculate 
  diluted net 
  income per 
  share        63,038            63,713(d)  67,352           67,352(d)
             ========            ======== ========           ========
 Shares 
  outstanding 
  at end of
  period       60,669              60,669   61,850             61,850
             ========            ======== ========           ========

 (a)  Elimination of stock-based compensation.
 (b)  Elimination of amortization of intangible assets.
 (c)  Income tax effect of adjusting entries.
 (d)  Includes the adjustment of shares used to calculate diluted net
      income per share resulting from the elimination of stock-based
      compensation.



                        UNITED ONLINE, INC.
            Reconciliation of Non-GAAP Financial Data
                          (in thousands)

                        Three Months Ended March 31,
                        ----------------------------
                             2005          2004
                           --------      --------
 Adjusted Operating
  Income Before
  Depreciation and
  Amortization (1)
 Operating income          $ 20,985      $ 19,930
 Depreciation                 3,474         1,598
 Amortization                 5,978         3,964
                           --------      --------
 Operating income
  before depreciation
  and amortization           30,437        25,492
 Stock-based
  compensation                1,075           477
                           --------      --------
 Adjusted operating
  income before
  depreciation and
  amortization             $ 31,512      $ 25,969
                           ========      ========

                                                       Twelve Months
                        Three Months Ended March 31,   Ended Mar 31,
                        ----------------------------   -------------
                             2005          2004            2005
                           --------      --------        --------
 Free Cash Flow (5)
 Net cash provided by 
  operating activities     $ 31,685      $ 34,785        $120,860
 Add (deduct):
  Capital expenditures       (3,455)       (1,005)        (14,960)
  Cash paid for relocation 
   costs (a)                     --            --           6,410
                           --------      --------        --------
 Free cash flow            $ 28,230      $ 33,780        $112,310
                           ========      ========        ========
 ---------------------------------------------------------------------
 (a) Represents cash payments made in connection with the
     relocation of the Company's corporate offices. These payments
     relate primarily to lease termination fees and capital
     expenditures for the new corporate offices.


                       UNITED ONLINE, INC.
      Selected Quarterly Historical Financial Data and Key Metrics (a)
  (in thousands, except per share amounts, number of employees 
                         and where noted)

                  Mar. 31,  Dec. 31,    Sep. 30,  Jun. 30,  Mar. 31, 
                    2005      2004        2004      2004      2004
                  --------  --------    --------  --------  --------
 Total revenues   $130,531  $119,620    $110,704  $110,618  $107,675
 Net income       $ 11,487  $ 80,189(b) $ 12,620  $ 12,310  $ 12,361
 Net income per
  diluted share   $   0.18  $   1.27    $   0.19  $   0.19  $   0.18
 Pay
  accounts (2)       4,952     4,826       3,232     3,189     3,095
 Active
  accounts (2)
  (in millions)       17.0      15.2         6.6       6.8       5.4
 Number of
  employees at
  end of period        769       742         598       582       504
 Annualized
  revenue per
  average
  employee (7)    $    691  $    714    $    751  $    815  $    859
 ---------------------------------------------------------------------
 (a) More information on the financial results for these quarters can
     be found in the company's filings with the Securities and 
     Exchange Commission.
 (b) Includes $68.6 million tax benefit related to the recognition of 
     a portion of the company's deferred tax assets.

                          UNITED ONLINE, INC.
             Analysis of Pay Accounts(a) and Subscriptions
                            (in thousands)

                      Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30,  Mar. 31, 
                        2005      2004      2004     2004      2004
                      -------   -------   -------   -------   -------
 Internet access        3,130     3,100     3,111     3,102     3,083
 Other Web
  services              3,070     2,886     1,239     1,125       924
                      -------   -------   -------   -------   -------
   Total
    subscriptions(b)    6,200     5,986     4,350     4,227     4,007
                      =======   =======   =======   =======   =======

 Total pay
  accounts(c)           4,952     4,826     3,232     3,189     3,095
 Accelerator
  penetration(d)           37%       36%       35%       32%       29%
 ---------------------------------------------------------------------
 (a) A pay account represents a unique billing relationship with a
     customer who subscribes to one or more of the company's services.
     A pay account does not equate to a unique subscriber since one
     subscriber could have several accounts.
 (b) A subscription represents a unique subscription to any
     individual pay service offered by the company. Internet access
     and accelerated dial-up are counted as two subscriptions,
     although most subscribers to the accelerated service purchase it
     bundled with our standard Internet access. Individual pay
     services include Internet access, community-based networking,
     accelerator services, premium email, web hosting and domain name
     registration, and premium content subscriptions.
 (c) Total pay accounts include Internet access, community-based
     networking, premium email, web hosting and domain name
     registration, and premium content accounts.
 (d) Defined as accelerator subscriptions divided by Internet
     access subscriptions.


            

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