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Updated from 9:53 a.m. EDT

Internet service provider



reported a narrower-than-expected net loss on Thursday, as revenue in the second quarter rose by more than 40% and the company pulled an additional 1.2 million members into its fold.

Altanta-based EarthLink said its net loss, excluding acquisition and merger-related costs, was $35.2 million, or 29 cents a share, in the second quarter, compared with $50.9 million, or 43 cents a share, in the same quarter of 1999. Analysts on Wall Street had expected a loss of 36 cents a share, according to

First Call/Thomson Financial

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Including special costs, EarthLink said its net loss widened to $63.7 million, or 52 cents a share, compared with $39.7 million, or 35 cents a share, in the same period last year.

Revenue in the latest quarter climbed to $230.9 million, a 41% increase over last year's $163.7 million. EarthLink's subscriber base expanded to 3.7 million members, a 47% rise over last year's 2.5 million members.

EarthLink announced in June that it would acquire

, one of the nation's 10 largest Internet service providers, in a deal it said would add more than 760,000 members to its subscriber base.

In a statement, the company attributed the better-than-expected report to heightened demand for traditional dial-up Internet access, small business Web hosting and broadband Internet access.

EarthLink shares finished Thursday's trading session down 1 3/16, or 8%, to 13 1/2.