America Online has gain of 900,000 new customers; but rival Prodigy is still floundering

Article Abstract:

America Online (AOL) earned revenues of $312.3 million in 3rd qtr FY 1996 and added 900,000 subscribers, but its stock fell 10% after the figures were announced. Analysts were not overly concerned about the drop, which saw the stock fall to $62.75, down $7.25, attributing it to profit taking and some concern over a new pricing strategy. The new prices will reduce costs for a small number of heavy users, offering 20 hrs of connection time monthly for only $19.95. AOL will continue to offer its current rate of five hours a month for $9.95, with each additional hour costing $2.95. AOL's revenues represent a 186% increase over the $109.1 million earned in 3rd qtr FY 1995. Net income rose to $15.127 million, up from a $3.296 million loss in the same quarter one year earlier. AOL, which plans to expand to Japan, now has almost six million subscribers. By contrast, rival Prodigy lost half of its two million subscribers and will be purchased by a management group led by Prodigy Pres Edward Bennett.

Management, Finance, America Online Inc., Company sales and earnings, Prodigy Services Co., Company Sales/Revenue, Company Earnings/Profit, AMER

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Performance Systems buys Pipeline Network

Article Abstract:

Performance Systems International Inc is acquiring the Pipeline Network Inc, an Internet service and software company, and is planning to expand the service nationally. Performance Systems says it will use Pipeline's consumer software and technology as the foundation for a consumer-based Internet service. Differing from the standard hourly access fee, the company says it will offer unlimited access for a flat monthly fee, yet to be determined. Performance hopes the acquisition will allow it to expand into the consumer market, beyond its customer base of 8,000 technical and business Internet customers. Its strategy will place it in competition with service providers including CompuServe, America Online and Prodigy, in a consumer online service market with 6.3 million users at the close of 1994.

Internet, Marketing, Company marketing practices, PSINet Inc., Company business planning, Company Acquisition Merger, Pipeline Inc.

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Sears moves to shed stake in Prodigy; the on-line business is taking a new shape

Article Abstract:

Sears announces its intention to sell its 50% share of the Prodigy online information service, and co-owner IBM has not commented publicly about its intentions for the service. Sears' move mirrors the action taken by H&R Block in its effort to shed itself of Prodigy rival CompuServe, despite the significant revenue increase the industry achieved in 1995. Analysts suggest that companies not completely committed to the industry, such as Sears and H&R Block, are wise to sell their stakes in the market while it is still profitable. Government communications deregulation promises to greatly increase the competitive aspects of the industry, substantially reducing profit margins.

Online information services, Sears, Roebuck and Co., S, Divestiture, Online information service, Divestment, Prodigy (Online information service)

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