The growth, and pain, of America Online

Article Abstract:

America Online (AOL) is one of the most successful on-line services, but since May 1996, it has undergone a series of setbacks, and observers are unclear whether the incidents are growing pains or whether the company is in trouble. In Jun 1996, AOL's stock is 40% below its May 1996 price, a drop precipitated in part by insiders selling their stock off. AOL's Pres and COO William J. Razzouk left the company after four months, and the company is under federal and state investigation for overcharging customers. Although Razzouk and CEO Steve Case claim they mutually agreed that Razzouk should depart, Case makes it clear that he played a large part in the decision, since he wants to oversee the company's revamping. AOL is adding new features, a new look and faster Web access as the company tries to attract new subscribers to boost its current membership of six million. While some claim that the Web will make online services unnecessary, Case contends that users still want access and services from a single company.

America Online Inc., Case, Steve, AMER

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Millionaires by the dozen: they know computers, who knows them?

Article Abstract:

The Gartner Group provides evaluations of computer products ranging from the World Wide Web to disk drives. The group delivers its service in a two-page document and is so powerful that it can make or break a product. Gartner's 1995 revenues of $225 million display a 33% increase and provide a 60% increase in net income, which reached $24.5 million. The company pursues business aggressively with an on-line strategy targeted at small companies and at expanding the numbers of subscribers in large companies. Each service costs $19,000 annually, and Gartner plans to reach $1 billion in annual sales by 2000, a target requiring 25% to 30% annual growth. Gartner faces few challengers in its niche, but the founder, Gideon Gartner, who left the company in 1990, plans to start a similar service in 1996. Gartner employees typically bring over 10 years of industry experience to the job and follow up their reports by accepting telephone calls from customers.

All Other Information Services, Business services, not elsewhere classified, Info Services ex Database, Gartner Inc., Company Business And Marketing

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Prodigy plans layoffs in preparation for sale

Article Abstract:

Prodigy Services, a joint venture of IBM and Sears, Roebuck and Co, plans to lay off 115 of its 680 employees as the executive staff tries to attract investors to bankroll a management buyout. The layoffs had been expected, since the company is shifting its strategy and moving its online business onto the Internet. Prodigy is translating its content into the standard World Wide Web hypertext programming language, and company officials say that once the move to the Web is complete, it will cost less to produce future content. Prodigy seeks to shed its image as the stodgy outgrowth of its corporate parents and reshape itself as a new-media studio, capable of reacting quickly to changing times. The lowest acceptable bid to buy Prodigy from Sears and IBM is $250 million, half the $500 million that Sears wanted for its half share alone in Feb 1996. Observers estimate that Prodigy subscriptions fell 15% to 1.4 million in 1st qtr 1996.

Layoffs, Company organization, Layoff, Prodigy Services Co.

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