December 9, 2005 4:19 PM PST

Prodigy up for sale

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Prodigy Communications, one of the oldest brands on the Internet and among Net service providers, is up for sale by its parent SBC Communications, now known as AT&T.

The Prodigy brand name and associated 66 registered trademarks in 52 countries are the intellectual property being sold, according to a document and proposal seen by CNET News.com. AT&T has contracted Ocean Tomo, an intellectual capital equity firm based in Chicago, to solicit and accept bids starting this month. The sale is expected to be closed by the end of March 2006.

"We're exploring the market for the brand and anticipate there will be strong interest for these marks, particularly in Asia," said George Kelakos, managing director at Ocean Tomo. Asian investors often look for established brands that can be reworked and marketed for similar offerings, he said.

AT&T representatives did not immediately respond to a request for comment.

Prodigy has one of the longest histories on the Internet, and hit its peak of popularity during the dot-com heyday selling DSL services.

It was founded in 1984 as a joint venture between IBM, Sears and CBS to market consumer Internet services--a rarity in the earliest days of the Net. Four years later, it launched one of the nation's first online services called Prodigy Classic, which offered basic e-mail and discussion groups to consumers.

By 1994, Prodigy became a pioneer in selling "dial-up" connections to the Web, the graphical interface for the Internet, and sold hosting services for Web publishers. By 1999, the company had become Prodigy Internet, marketing a full range of services, applications and content, including dial-up and DSL for consumers and small businesses, instant messaging, e-mail and communities. In true dot-com bubble fashion, its shares shot up 56 percent on its first day of public trading that year.

In 2000, SBC bought a 43 percent interest in the company, and Prodigy became the exclusive provider to SBC's 77 million high-speed Internet customers. More than a year later, SBC bought controlling interest for $465 million when Prodigy was the fourth-largest Internet service provider behind America Online, Microsoft's MSN and EarthLink. Prodigy in 2000 was reported to have 3.1 million subscribers of its own, of which 1.3 were DSL customers.

IBM and Sears had already sold their interest in the company in 1996, after investing more than $1 billion between them, according to the sales proposal.

The proposed sale comes as AT&T and SBC are working out some of their brand issues. In January, SBC agreed to buy AT&T for $16 billion; and the joint company agreed to change its name to AT&T in the aftermath of the deal. Still, SBC, for example, has a deal with Internet giant Yahoo to sell and market DSL (digital subscriber line) services, an offering called SBC Yahoo. An AT&T spokesman said that the company has yet to finalize a new name for the joint program that reflects SBC's parent name.

Today, Prodigy Internet is not actively marketed by SBC. Visiting Web addresses including Prodigy.com or Prodigy.net will direct people to SBC Yahoo services. Still, the company retains some die-hard e-mail users, Kelakos said, without specifying how many. Also, SBC has reportedly started marketing a Prodigy-branded Wi-Fi device for dial-up users.

As part of the proposed sale of Prodigy, SBC plans to retain an exclusive field-of-use license with respect to the U.S. ISP market, according to the document. Australia and Mexico markets may still have Prodigy subscribers, Kelakos said.

14 comments

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Not AT&T!
"Prodigy Communications, one of the oldest brands on the Internet and among Net service providers, is up for sale by its parent SBC Communications, now known as AT&T."

It's not now known as AT&T! Don't you guys read the news???

It's now known as at&t. I guess they feel that lower case letters are more warm and fuzzy to their potential customers.
Posted by Dwaine (20 comments )
Reply Link Flag
Not quite...
It appears that at&t is lowercase as a logotype, but in text, it is still AT&T.

<a class="jive-link-external" href="http://www.sbc.com/gen/general?pid=6756#" target="_newWindow">http://www.sbc.com/gen/general?pid=6756#</a>
Posted by TV James (680 comments )
Link Flag
Just how much....
.... is a dead dog worth?????? We'll find out. Just stay tunerd!!!!!!!
Posted by Earl Benser (4310 comments )
Reply Link Flag
they are just selling off the name
Since people sort of know the name "Prodigy" in relation to accessing the internet -- same way you remember defunct "Eastern Airlines" for flying -- they will sell the name to someone who thinks they can use it. They don't need it anymore. It's a garage sale. They said they will sell it to an Asian investor -- probably because no U.S. business would touch it.

Some people still do use the Prodigy service (but it's really SBC underneath), but then some people also still use CompuServe (which is really just AOL rebranded). People get stuck with their e-mail addresses and don't want to change. SBC will tout this user "loyalty" as proof that the brand has great characteristics. But all it shows is there are people who still don't want to join the 21st century. :)
Posted by ChazzMatt (169 comments )
Link Flag
Just how much....
.... is a dead dog worth?????? We'll find out. Just stay tunerd!!!!!!!
Posted by Earl Benser (4310 comments )
Reply Link Flag
End
I didn't know Prodigy existed anymore. I had about it 17 years ago. They should close it.
Posted by paulsecic (298 comments )
Link Flag
they are just selling off the name
At least in the USA it's mostly just a name... Since people sort of know the name "Prodigy" in relation to accessing the internet -- same way you remember defunct "Eastern Airlines" for flying -- they will sell the name to someone who thinks they can use it. SBC doesn't need it anymore. It's a garage sale. They said they will sell it to an Asian investor -- probably because no U.S. business would touch it.

Some people in the USA still do use the Prodigy service (even if it's really SBC underneath), but then some people also still use CompuServe (which is really just AOL rebranded). People get stuck with their e-mail addresses and don't want to change. SBC will tout this user "loyalty" as proof that the brand has great characteristics. But all it shows is there are people who still don't want to join the 21st century. :)

However, I read in an online enclopedia that in Mexico the Prodigy service is still alive and well with 80% of that country's internet users there connecting via Prodigy. But, I'm not sure SBC has the right to sell that -- they don't own the Mexican service, so they are probably selling the brand name in the countries where it's not an active brand.
Posted by ChazzMatt (169 comments )
Link Flag
Bad history
Prodigy didn't provide access to the Internet when it started in 1984. It was a private closed system. And definitely not one of the the first, it was predated by both CompuServe and The Source.
Posted by aabcdefghij987654321 (1721 comments )
Reply Link Flag
SNA, not TCP/IP
Not only did Prodigy not provide Internet access in the early days, it used Systems Network Architecture for its communications protocol, not TCP/IP or UDP.

If you were outside IBM, you called it "ess en aiy." If you were an engineer inside, you called it "snah."

Jim
Posted by (3 comments )
Link Flag
errors in this story
this story has so many errors it's hard to know where to begin.


"It was founded in 1984 as a joint venture between IBM, Sears and CBS to market consumer Internet services--a rarity in the earliest days of the Net."

This is false. It was a pre-internet online service like AOL. AOL, compuserve, and Prodigy were all the same ilk -- "closed gardens" to the outside world. Prodigy provided content like a private internet -- you had news, shopping, entertainement -- almost like a text and graphics version of your cable system where you have various channels (like Home Shopping network and CNN). Prodigy members could NOT ocmmunicate with non-Prodigy members, whether AOL, CompuServe, or the few academeic and military people who were using that new-fangled internet. Prodigy members were even discouraged from communicating with each other. The e-mail was supposed to be used to communicate with Prodigy administrators or to help buy stuff, not for chatting with each other. When the internet gained mass popularity it threatened these online services business model. They wanted to provide content only to their own subscribers and be able to control the communications, not have the non-Prodidgy subsribers join in. Prodigy rationed e-mail use (which until the mid-90s was only between Prodigy members), charging a penalty for over a certain number per use.


"Four years later, it launched one of the nation's first online services called Prodigy Classic, which offered basic e-mail and discussion groups to consumers."

It was not called Prodigy Classic until the mid-to late 90's. It was just Prodigy. When the internet started gaining popularity around 1994, they reluctantly added Internet access as an add on. You would dial up and connect to Prodigy and you were in their environment, then if you wanted to access something on the WWW, you had to hit a web button to basically launch a web browser. Sending "outside" e-mails was also a pain. They also finally stopped charging penalties for "excess" e-mails. By the late 90s they launched new software called "Prodigy Internet" for those who mainly wanted internet access, but they retained the old model which they called "Prodigy Classic" for those who didn't want to join the revolution.

Prodigy at least tried to adapt. CompuServe had the least success and was later bought by AOL. Of the three private online services AOL adapted the best, embracing the web -- but AOL's mail still doesn't follow Internet protocols (which is ironic for a service whose motto is "You've Got Mail").

"Prodigy has one of the longest histories on the Internet, and hit its peak of popularity during the dot-com heyday selling DSL services."

Mostly wrong. Prodigy, along with AOL, was a dial up pioneer. DSL only came into being in the late 90s and was very expensive. Prodigy may have offered DSL, much like Earthlink offers rebranded DSL from phone companies around the country, but Prodigy was never known to be a major DSL force. (Same way AOL tried to sell DSL and stopped.) Phone companies sold DSL. This reporter read an article saying SBC (a phone company) -- who now owns Prodigy -- was initially going to use Prodigy to sell DSL and made the wrong conclusion -- that Prodigy has DSL expertise. It's SBC that has the DSL expertise and was trying to convert old Prodigy dial-up die hards to join the 21st century.
Posted by ChazzMatt (169 comments )
Reply Link Flag
Thanks!
Your corrections are much appreciated. To often people come up with half-baked nonsense and those who were not there, regurgitate it as if it were gospel.

I believe it was Ford who said History is bunk, and Orwell with Those who control the past, control the future.

The only way we can make sound decisions is by understanding what has come before. In my view articles such as yours serve a much needed public service. Thanks.
Posted by Mister C (423 comments )
Link Flag
Sale or AUCTION?
Quote:
[http://AT&#38;T has contracted Ocean Tomo, an intellectual capital equity firm based in Chicago, to solicit and accept bids starting this month.|http://AT&#38;T has contracted Ocean Tomo, an intellectual capital equity firm based in Chicago, to solicit and accept bids starting this month.]
End of Quote.

My reading comprehension indicates that this is an auction, with Ocean Tomo the auctioneer; not a sale.

Have there been ANY bidders?

Perhaps the current owner will consider making POSITIVE improvements to the service: a "Level of SERVICE Guarantee" for the members, cease censoring members word usage in their posts and make ALL usenet news groups available on the server; withdrawing Prodigy from sale or auction?
Posted by gowitzka (2 comments )
Reply Link Flag
Prodigy - MCI people were converted
I had prodigy very early and when I needed to use something for my business I went with MCI, they later sold out to Cable and Wireless and CW was later forced to sell their internet business and Prodigy bought the Email users. So the case of some people now wanting to join the 21st century by dumping prodigy is not correct. How would you like to change all your business emails 4 times.
I was just thankful I didn't have to change to SBC then SBC-yahoo and now AT&#38;T. After reading this I am trying to get people to use my Gmail account.
Posted by Alan.Shenefield (4 comments )
Reply Link Flag
 

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