People use the internet for different things, and service providers who want to expand their customer bases know they need to appeal to casual e-mailers and occasional browsers, as well as to intensive business users. There is an outfit in Woodland Hills, California that is well-acquainted with this notion and offers a variety of services, from free access to full broadband capacity.

United Online (NASDAQ: UNTD) provides both internet access and popular content. Its communications unit gets customers on the Web through value-priced NetZero, Juno and BlueLight internet portals. Its Content & Media segment provides social networking through its Classmates Online and The Names Database sites. Its MyPoints site operates an online rewards program for members who take surveys and shop with participating merchants. The firm also maintains millions of personal web sites, offers photo sharing services and provides advertisers with real-time market research. Altogether, the company has over 60 million registered accounts. Competitors include Time Warner Inc. (NYSE: TWX), Comcast (NASDAQ: CMCSA), Verizon Communications (NYSE: VZ) and AT&T (NYSE: T).

The company pleased investors last week, when it reported Q1 EPS of 27 cents and revenues of $129.9 million. Analysts had been looking for 25 cents and $125 million. Management also guided Q2 revenues to $128-$132 million ($124.50M consensus) and FY07 revenues to $510-$520 million ($498.69M consensus). The CEO particularly cited growth in the Content & Media unit for the solid numbers.

UNTD shares popped into a bullish "pennant" consolidation pattern on the news. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy," two "holds" and one "sell." The UNTD Price to Sales ratio (2.04), Price to Book ratio (3.03), Price to Cash Flow ratio (11.38) and Price to Free Cash Flow ratio (30.52) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $10.05 and $16.35. A stop-loss of $13.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.