Prodigy Communications Corporation (Prodigy Services Corp., Prodigy Services Co., Trintex) was an online service that offered its subscribers access to a broad range of networked services, including news, weather, shopping, bulletin boards, games, polls, expert columns, banking, stocks, travel, and a variety of other features.
Initially subscribers using personal computers accessed the Prodigy service by means of POTS or X.25 dialup. In 1990–1991 LAN and cable modem access were enabled. The company claimed it was the first consumer online service, citing its graphical user interface and basic architecture as differentiation from CompuServe, which started in 1979 and used a command line interface.
By 1990 it was the second-largest online service provider, with 465,000 subscribers trailing only CompuServe's 600,000.
Early history
The roots of Prodigy date to 1980 when broadcaster CBS and telecommunications firm AT&T formed a joint venture named Venture One in Fair Lawn, New Jersey. The company conducted a market test of 100 homes in Ridgewood, NJ to gauge consumer interest in a Videotex-based TV set-top device that would allow consumers to shop at home and receive news, sports and weather. After concluding the market test, CBS and AT&T took the data and went their separate ways in pursuit of developing and profiting from this market demand.
Prodigy was founded on February 13, 1984 as Trintex, a joint venture between CBS, computer manufacturer IBM, and retailer Sears, Roebuck and Company. CBS left the venture in 1986 when CBS CEO Tom Wyman was divesting of properties outside of CBS's core broadcasting business. The company's service was launched regionally in 1988 in Atlanta, Hartford, and San Francisco under the name Prodigy. A nationwide launch followed on September 6, 1990.
Thanks to an aggressive marketing campaign in the media, bundling with various consumer-oriented computers such as IBM's PS/1 and PS/2, as well as various clones and Hayes Modems, the Prodigy service soon had more than a million subscribers. To handle that traffic, Prodigy built a national network of POP (points-of-presence) sites that made local access numbers available for most homes in the U.S. This was a major factor in the expansion of the service since subscribers did not have to dial long distance to access the service. The subscriber only paid for the local call (usually free), while Prodigy paid for the long distance call to its national data center in Yorktown, New York.
Development
Under the guidance of editor Jim Bellows, Prodigy developed a fully staffed 24x7 newsroom with editors, writers and graphic artists intent on building the world's first true online medium. The initial result was that Prodigy pioneered Internet portals - a single site offering news, weather, sports, communication with other members, and shopping for goods and services such as groceries, general merchandise, brokerage services, and airline reservations. The service provided a number of lifestyle features, including popular syndicated columnists, Zagat restaurant surveys, Consumer Reports articles and test reports, games for kids and adults, in-depth original features called "Timely Topics," bulletin boards moderated by subject matter experts, movie reviews and e-mail. Additionally, Prodigy was also the service that launched ESPN's online presence.
The service was presented using a graphical user interface. The Data Object Architecture wrapped vector and incremental point graphics, encoded as per the North American Presentation Level Protocol Syntax NAPLPS, along with interpretative programs written in the proprietary languages TBOL and PAL . The initial emphasis was on DOS and later Microsoft Windows. Apple Macintosh was also supported, but the Prodigy screens were not always configured to the Mac standard, resulting in wasted space or cut-off graphics.
Prodigy's initial business model relied more on advertising and online shopping for cash flow than monthly subscriptions. Subscribers were charged a flat monthly fee that provided limited access. A monthly rate was charged for a set usage time, and any time spent connected to Prodigy exceeding that set usage time was charged to the customer. Prodigy's shopping applications initially underperformed relative to expectations. Reasons for difficulty in online shopping for Prodigy included users' initial doubts and concerns about online purchasing - a new service whose security and reliability was largely unknown, even with regard to established and trusted merchants. Additionally, another reason for poor online merchandising was the nature of the graphics presented. Using the early NAPLPS graphic standard, it was not possible to render realistic images of products. As such, while commercial clients with presence on the Prodigy Service might have realized a measure of success with an electronic order blank supporting a print catalog, it was otherwise difficult and challenging for online merchants to market products.
Despite these challenges, Prodigy was largely responsible for helping merchants such as PC Flowers become some of the earliest e-commerce success stories. However, revenue from advertising was limited.
Price increases
Two of Prodigy's most popular services turned out to be its message boards and email. Because Prodigy's business model depended on rapidly growing advertising and online shopping revenue, email was developed primarily to aid shopping, not for general communication between users, which in practice is what it became. The message boards resulted in users being connected to the service far longer than projected. This resulted in higher than expected expenses, adversely affecting the service's cash flow and profitability.
In an attempt to control costs and raise revenue, Prodigy undertook two separate actions. First, Prodigy modified their basic subscriber plans by allowing only thirty e-mail messages free each month, while charging 10 cents for each additional e-mail message - a policy that was later rescinded. Then, in the summer of 1993, it began charging hourly rates for several of its most popular features, including its most popular feature, the message boards - another policy that was later rescinded, but not before tens of thousands of members left the service.
Prodigy was slow to adopt features that made its rival AOL appealing, such as anonymous handles, real-time chat, and unmoderated bulletin boards. Unlike AOL and other similar services, Prodigy was designed primarily for information services, shopping and advertising, as opposed to communication and entertainment.
Despite losing subscribers, Prodigy stuck with its graphical interface, its proprietary content, and its traditional policies while other services embraced open standards and grew faster. Eventually, the emergence of the Internet and the World Wide Web threatened to leave Prodigy behind.
Conversion to a true ISP
In 1994, Prodigy became the first of the early-generation dialup services to offer full access to the World Wide Web and to offer Web page hosting to its members. Since Prodigy was not a true Internet service provider, programs that needed an Internet connection, such as Internet Explorer and Quake multiplayer, could not be used with the service. Prodigy developed its own web browser, but it compared poorly to other mainstream browsers in features.
In 1995 Prodigy hired Bill Day, Scott Danielson and Oleg Vishnepolsky, one of the Internet pioneers. This troika led the transformation of Prodigy from proprietary service into Internet standard based ISP. Under their leadership in 1995 through 1996 Prodigy unveiled several Internet related products. Access to USENET Newsgroups was made available to Prodigy members via the Prodigy interface software. Also, Prodigy's first web presence, called Astranet, was released shortly thereafter. Astranet was to be a web-based news and information service and supported in part by advertising, though the site was considered experimental and never fully worked out its offering or business model. Another innovation was Skimmer - a market trial ISP service which became the base for the Prodigy Internet .
In 1996, the company retooled itself as a true Internet service provider, making its main offering Internet access branded as Prodigy Internet . Amazingly this new service featured personalized web content, news alerts to pagers, java chat - all in early 1996, ahead of its time. At the same time Prodigy de-emphasized its antiquated proprietary interface and its own editorial content, which were rebadged as Prodigy Classic. Prodigy Classic was discontinued in November, 1999 with the official explanation that its aging software was not Y2K compliant. The service had 209,000 members when it was discontinued.
A public company
In 1996, Prodigy was acquired by the former founders of Boston Technology and their new firm International Wireless, with Mexican billionaire Carlos Slim Helú, a principal owner of Telmex, as a minority investor. IBM and Sears sold their interests to this group for $200 million. It was estimated that IBM and Sears had invested more than $1 billion in the service since its founding.
Prodigy continued to operate as before, while Telmex provided Internet access under the Prodigy brand in Mexico and other parts of Latin America, with some services being provided by Prodigy Communications in the United States.
Prodigy went public in 1999, trading on the NASDAQ under the symbol PRGY . Later that year, Prodigy entered a strategic partnership with SBC Communications wherein Prodigy wo
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