August 1, 1996 7:15 PM PDT

CompuServe fails to Wow

CompuServe is bringing its WOW service back into the corporate fold after creating the startup company in April.

According to a prepared statement, the move will make for a more efficient organizational structure and allow the company to refocus its marketing efforts. Scott Kauffman, previously the general manager of Wow and CompuServe vice president, will now be vice president of online services. He will be responsible for bringing the marketing and editorial departments of the two organizations together.

Kaufman has also been assigned the task of generating new revenue for a company that announced in mid-July that it was going to lose more that expected for its first quarter. "Advertising is one of the big things we will go after. Not only will we have the traditional business model of getting members but we'll broaden that model to also include a stronger online advertising force," said company spokesperson William Giles.

Giles denied that the reorg indicates that Wow isnt' doing as well as expected. "We announced earlier that we had 91,000 subscribers in the first three months of the service. It has met all of our expectations and is doing well....If it bombed, we wouldn't be bringing it back in."

The CompuServe service itself, however, is facing a slowdown in subscriber signups. A higher level of cancellations of recently acquired subscribers also indicates that many users are migrating to Internet-only services. While the company does provide Internet access through another offshoot, Sprynet, the company is losing money as it prepares for the transition to a wholly Internet-based online service.

"Obviously what it takes to launch and run a service are different efforts. Weve got a group running a large service, and now we're leveraging those resources across the different services," he continued. Giles notes that having the different products together will make it easier to sell advertisers and potential content providers on the online.

Related stories:
CompuServe sued on stock information
CompuServe makes debut on Wall Street

 

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