Businessmodel of United Online

Customer Segments

United Online has a mass market business model, with no significant differentiation between customer segments. The company targets its offering at all consumers seeking Internet services.

Value Proposition

United Online offers two primary value propositions: accessibility and brand/status.

The company creates accessibility by providing a wide variety of options. It offers a broad range of services, including home wireless broadband, DSL service plans, four types of mobile broadband plans, and four types of dial-up plans. This large set of options helps it attract more customers.

The company has established a strong brand due to its success. It has over 100 million registered accounts and serves billions of impressions per month. It has also won a number of honors, including the Association for Corporate Growth (ACG) Award in the Global Company category (2013).

Channels

United Online’s main channel is its website. The company promotes its offering through its social media pages, sponsorships, and television/online/print/outdoor advertising.

Customer Relationships

United Online’s customer relationship is primarily of a self-service nature. Customers utilize its services while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

United Online’s business model entails providing Internet-related services to its customers.

Key Partners

United Online relies on third-party software suppliers for some components of its platforms. It also licenses a number of applications for billing, advertising, customer support, and other operations.

United Online operates the Refer-a-Friend program, through which customers are invited to refer their associates to its services. Leads that result in a purchase earn a commission for the party.

Key Resources

United Online’s main resources are its proprietary software platforms, which serve over 100 million people.

It depends on its human resources in the form of technology employees to maintain and update the platforms and customer service staff to provide support.

Cost Structure

United Online has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions.

Its biggest cost driver is cost of revenues, a variable expense that includes data center, telecommunications, and personnel costs. Other major drivers are in the areas of administration, sales/marketing, and technology/development, all fixed costs.

Revenue Streams

United Online has three revenue streams:

• Service Revenues – Revenues generated from sales of subscriptions to consumers, who are billed in advance for the subscription term.
• Product Revenues – Revenues generated from the sale of mobile broadband devices, in addition to associated shipping and handling fees.
• Advertising/Other Revenues – Revenues generated from fees charged to companies to advertise their offerings on the company’s platforms. Specific ad services include search, display, e-mail, and text-link opportunities.