A few weeks ago, when we explored Seattle-based Classmates.com's competition with Facebook, we weren't able to get representatives of Classmates to comment for the story. But Mark Goldston, CEO of Classmates parent United Online Inc., discussed the topic at length today during a Goldman Sachs technology conference, in response to a question about how Classmates' hybrid advertising-and-subscription model will stand up against Facebook and other free rivals.

"Never heard that question before," he joked. "Facebook is free? Golly."

Then he got serious, laying out a broad defense of the site's business model, calling it the most profitable social network in the world, asserting that Facebook actually isn't a direct competitor, and making it clear that he considers assumptions about Classmates.com's impending demise wildly misguided. Continue reading for excerpts.

"Classmates has been around for 15 years. Classmates has had a paid and free model for going on close to a decade. It’s probably -- not probably -- it is the most profitable social network in the world. If you don’t have a paid subscription model -- and this is absolutely not a dig at anyone -- if you don’t have a paid subscription model in the social networking business, you are not going to make money. Ask the guys at MySpace, ask the guys at — ask anybody at any of these companies. When I started in the Internet back in ’99, remember it was get big fast, and the mass eyeballs, you remember all that stuff. That’s a lot of what the social networking industry is. Massive amounts of people, storage of photos and you name it. But how do you make money?

Mark Goldston

"So we look at it and say, we’ve got to make sure that we’re different than them. We view Facebook as a partner, not a competitor. We get thousands of people a day from Facebook. We advertise on Facebook. We’re working on applications with them to run the reunion portion of the -- Facebook’s a great, fun thing to use. It’s very different that Classmates. Our average member is 40 years old. And we’ve got 55 million people in the franchise. We’re the people who connect you with your past. We are a trip down memory lane. That’s what we are. We’re not trying to get you to make brand new friends, we’re trying to reconnect you with the people that you knew.

"And so, how do we get people to pay us? Because we’ve got a compelling proposition. If people check you out, leave you messages and the like, or you want to send people messages, you’ve gotta pay to do it. Other people will say, well, I can do that for free on Facebook. OK, great. So, why is anybody paying us? Well, as Facebook has gone from 9 million people to 220 million people, what’s happened to our paid business? We’ve had record numbers. We sign up 2.5 to 3 million people a year to pay us. Now, we’ve had to discount of late because it’s a lousy economy, not because of Facebook. ... We registered in the fourth quarter an all-time record active member number. ...

"The viability of the model is not in question. People keep saying to me, when is this going to end? Well, it’s been around 15 years. (When) we bought the company it had 1.3 million paid subs. Now it has 5 million. The company had 33 million frees, it’s not got over 50. The company was making 6 to 7 million, it’s now making 10x that. So it’s a great business."

For the record, although United Online reports record numbers of active accounts, comScore Networks says the site experienced a 27 percent decline in U.S. monthly unique visitors over the past year, falling to 12 million by the end of the year.

Previously: Classmates.com plans to digitize yearbooks, charge to view online (Stay tuned for more on that topic later this week.)