September 25, 1998 7:05 AM PDT

Prodigy plans to go public

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Prodigy Communications, one of the earliest Internet service providers, today announced that it has filed with the Securities and Exchange Commission for an initial public offering of common stock.

The offering size and the estimated price range have not yet been determined. The timing of the offering is subject to market conditions and other factors and is not expected to occur prior to November 1998.

Apart from a few brightly blazing IPOs, many offerings this summer were either delayed or canceled. Yesterday's offering of online auctioneer eBay, which nearly tripled in value on its first day, was one of the bright spots in the past few months. IPOs by PointCast and CitySearch were canceled and the companies announced private partnerships or deals.

The Prodigy offering is being lead-managed by Bear Stearns and BancBoston Robertson Stephens.

Prodigy's subscriber numbers trail America Online and its acquisition, CompuServe, which together serve 13 million subscribers worldwide. Prodigy also trails the Microsoft Network, which has between 2 million and 3 million subscribers, and ISP AT&T WorldNet, which has more than 1 million customers.

Prodigy was one of the first online services or ISPs to pledge that it would not follow in the footsteps of AOL in raising its prices. Early in the year, AOL announced it would raise its monthly fee for unlimited access by 10 percent.

But most analysts agree that Prodigy is no longer gunning to match the big players.

"The notion of Prodigy as a full-fledged online service is antiquated," Mark Mooradian, an analyst at Jupiter Communications, said. "Prodigy is not positioning itself against AOL or MSN, but rather against MindSpring and EarthLink."

MindSpring and Earthlink are ISPs with subscriber bases of 393,000 and 710,000 members, respectively.

"Going forward, Prodigy is trying to pull out of the online service business. They have totally scaled back and are no longer creating original content for the most part," Mooradian said. "It is the ISP business they are trying to pitch themselves against."

 

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