This site seems to be on every damn popup and free site there is! Do they actually make money? I have checked them out…are there actually large numbers of people who WANT to repeat their highschool experiences?
And once you have reconnected with your highschool friends, do you really want to talk to them?
As of 2002 they were in the black, according to this article on CNET. It’s a privately held company so detailed financial information is hard to come by.
They do buy a thoroughly ridiculous amount of advertising and services (in fact, they are clients of both my current and previous employers.) All that spending money must come from somewhere.
All they need to do is sell more advertising than they buy…
I doubt (though I could be wrong) that their advertising costs exceed their advertising revenues.
This can easily be explained by purchasing very cheap untargeted advertising, then narrowing down your field of surfers to very targeted market segments…
For example, consider something so simple as simple as paying the cheapest amount for one banner impression on Yahoo, then gaining 20 impressions on your own site as people click and click and click trying to figure out wtf is going on… Each time they click, you are narrowing down their field of profitable advertisements, thus increasing the target market value per click. Does that make sense?
It’s oversimplified, yes, but I’m personally convinced that their revenue comes moreso from advertising than any actual product. It just sounds good from the outset, then you realize it’s bunk, so you click someone elses advertisement. And after they know what you want, your click is worth more…
Marketing is complicated.
Membership is free, but if you want access to the email addresses of your old classmates, you have to cough up $39.95 for a “Gold” membership.
I don’t know how many of the thousands of people who have joined actually purchased these memberships, but I suppose it’s quite a few.
What will likely be the doom of classmates.com is when more high schools start making free website themselves to do the same stuff for their alumni, as mine did.