ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, May 13, 1996 TAG: 9605130127
SECTION: NATIONAL/INTERNATIONAL PAGE: A-3 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
A group of investors announced Sunday they had acquired the troubled Prodigy Services Co. commercial on-line service from its owners, IBM Corp. and Sears, Roebuck and Co.
The takeover was led by Prodigy management, including President and Chief Executive Officer Ed Bennett, and International Wireless Inc., a global communication company. Bennett will continue to serve in those positions.
Prodigy needs to invest heavily in new systems and marketing to keep pace with its rivals, America Online and CompuServe.
``This gives us a real clear ownership structure, and the cloud around Prodigy is removed,'' Bennett said in a telephone interview Sunday. ``The beleaguered, troublesome days for Prodigy are over.''
The deal still must meet regulatory approval.
Under the deal, International Wireless of Cambridge, Mass., will own Prodigy, with Bennett and other managers running the company. Grupo Carso, a leading Mexican telecommunication company, is a financial and strategic partner in the venture.
Prodigy will aggressively expand its Internet strategy, hoping to tap into markets abroad, Bennett said.
Prodigy was the second-largest on-line service in early 1995 with about 1.25 million subscribers, while CompuServe had 2 million and America Online 1 million.
Now, however, America Online has grown to 5 million subscribers and CompuServe to 4 million while Prodigy has stood still.
Prodigy was founded in 1984 as a joint venture of CBS, IBM and Sears that would provide a home banking and shopping service. CBS dropped out in 1986.
Revenue climbed from an estimated $48 million in 1991 to more than $250 million last year. However, analysts do not believe Prodigy has earned a profit for Sears and IBM.
LENGTH: Short : 43 linesby CNB