Prodigy: A Bath For Ibm And SearsPaul Eng
Why does Edward Bennett want to buy Prodigy, the No.3 computer online service? Bennett, who took Prodigy's helm a year ago, is expected soon to announce a deal in which he and other managers will take the service off the hands of owners IBM and Sears, who have poured about $1.2 billion into Prodigy since launching it in 1985. Now, they'll take a bath. Analysts say the partners were asking $700 million to $800 million. Those close to the negotiations say Bennett may have a deal at $100 million. Even at that price, Prodigy may be no bargain. Bennett, 49, formerly head of Viacom's VH-1 cable-TV music channel, seemed a natural to revive the service. But Prodigy has slipped further. No.1 America Online has nearly 6 million subscribers, CompuServe has nearly 5 million, but Prodigy peaked at 2 million in 1994 and has since dropped to 1.3 million. Bennett and team believe Prodigy could become a profitable super-hip "site" on the World Wide Web, but analysts are skeptical. They figure even the Net's leaders are losing money.