Classmates Media, an online social networking and loyalty marketing services firm, canceled its planned IPO citing sub-optimal market conditions. While multiple high profile transactions in the social networking space involving blue chip names, such as Google, Microsoft and News Corp., were viewed as a positive sign for Classmate's deal getting done, it is likely that investors were sensitive to the proposed valuation given the increasingly crowded competitive landscape and questions about the sustainability of subscriber growth in the face of declining unique visitor traffic to Classmate's flagship website. It's public parent, United Online, expects to book a $4.5 to $5.5 million charge in connection with the withdrawal. Goldman Sachs and J.P. Morgan headed the list of underwriters on the deal.
