Prodigy (online service)
AT&T Inc.) | |
Headquarters | White Plains, New York, U.S. (earlier) Austin, Texas, U.S. |
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Products | Telephone, Internet, Television |
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Prodigy Communications Corporation was an
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.[1] Prodigy was described by the New York Times as "family-oriented" and one of "the Big Three information services" in 1994.[2] By 1990, it was the second-largest online service provider with 465,000 subscribers, trailing only CompuServe's 600,000.[3] In 1993 it was the largest.[4]
In 2001, it was acquired by
Early history
The roots of Prodigy date to 1980 when broadcaster CBS and telecommunications firm AT&T Corporation formed a joint venture named Venture One in Fair Lawn, New Jersey.[5] The company conducted a market test of 100 homes in Ridgewood, New Jersey[6] 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
Subscribers using personal computers initially accessed the Prodigy service over copper wire telephone "POTS" service or X.25 dialup. Prodigy employed 1,200 bit/s modem connections for its initial rollout and offered low-cost 2,400 bit/s internal modems to subscribers at a discount to provide faster service and stabilize the diverse modem market. The host systems used were regionally distributed IBM Series/1 minicomputers managed by central IBM mainframes located in Yorktown Heights, New York.[10][11]
Thanks to an aggressive media marketing campaign, bundling with various consumer-oriented computers such as IBM's
Development
Under the guidance of Henry Heilbrunn,
Prodigy quickly implemented application standard code modules loaded from diskette. These modules relied upon real-time tokenized data from Prodigy database servers to drive core Prodigy service functionality on local user PCs. This client-server design worked well; by staging application-specific and reusable common code modules on Prodigy end-user diskettes, millisecond "click-to-available-cursor" response times were achieved that were otherwise unachievable in 1986 over slow 1,200-to-2,400 bit/s modems.
The service was presented using a
Prodigy's initial business model relied more on advertising and online shopping for cash flow than on monthly subscriptions. Subscribers were charged a flat monthly fee that provided unlimited access. Initially, a monthly rate was set for unlimited usage time and 30 personal messages. In addition, subscribers could purchase additional messages. Later, Prodigy divided its service into "Core" and "Plus" sections. Core section usage remained unlimited, but Plus sections were limited by usage time. Subscribers were afforded a monthly allotment of Plus time, but if that time was exceeded, the subscriber would incur additional charges based on usage time. A blue indicator in the bottom-right corner of the screen indicated the subscriber's section.
Prodigy's shopping applications initially underperformed relative to expectations. This was attributed to the company's misperception that online shoppers would pay a premium rather than expect discounts for merchandise and to the product's poor graphics that resulted from the limitations of current technology. Using the early NAPLPS graphic standard, rendering realistic images of products was impossible, presenting great difficulty for online merchants to market products.
Despite these challenges, Prodigy was primarily responsible for helping merchants such as PC Flowers become some of the earliest e-commerce success stories. However, revenue from advertising was limited.
By 1993, Prodigy was developing a network architecture now known as a content delivery network in which the network caches its most frequently accessed content as close as possible to the users. The company sold private versions of it within customers' private corporate networks.[14]
Price increases
Two of Prodigy's most popular services were its message boards and email. Because Prodigy's business model depended on rapidly growing advertising and online shopping revenue, email was initially developed primarily to aid shopping. However, it later found much greater usage as a means of general communication between users. The popularity of Prodigy's message boards caused users to remain connected to the service far longer than had been projected. This resulted in escalating expenses that adversely affected the service's cash flow and profitability.
To control costs and raise revenue, in January 1991, Prodigy modified its basic subscriber plans by allowing only 30 free email messages each month, while charging 25 cents for each additional email message, a policy that was later rescinded. 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. This policy was later rescinded after tens of thousands of members left the service.
The price increases prompted an increase of "underground IDs" by which multiple users would share a single account and manipulate the email service to act as private bulletin boards. This was accomplished by sending emails to intentionally invalid addresses containing the name of the intended recipients. The service would return the emails, which were not billed, and users of the shared account would find the returned messages there. Replies were sent by entering the name of the first sender as the addressee, which would again trigger a return of the message.
Prodigy was slow to adopt features that made its rival AOL appealing, such as anonymous handles and real-time chat.
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. However, since Prodigy was not an actual Internet service provider, programs that needed an Internet connection, such as Internet Explorer and the Quake multiplayer game, could not be used with the service. Prodigy developed its own web browser, but it compared poorly to other mainstream browsers in terms of features.
In 1995/1996, Prodigy hired Ed Bennett and Will Lansing. From 1995 through 1996, Prodigy unveiled several Internet-related products. It debuted its real-time chat area within the service, similar to AOL's. Access to Usenet newsgroups was made available and Prodigy's first web presence, Astranet, was released shortly afterward. Astranet was to be a web-based news and information service supported partly by advertising. However, the site was considered experimental and incomplete. Another innovation was Skimmer, a market trial ISP service that became the base for Prodigy Internet.
In 1996, with Gregory C. Carr as chair, the company retooled itself as a true Internet service provider, making its main offering Internet access branded as Prodigy Internet. This new service featured personalized web content, news alerts to pagers, and Java chat. At the same time, Prodigy deemphasized its antiquated proprietary interface and editorial content, which were relabeled as Prodigy Classic.[9] Prodigy Classic was discontinued on October 1, 1999 because the aging software was not Y2K compliant. The service had 209,000 members when it was discontinued.[10][15]
A public company
In 1996, Prodigy was acquired by the former founders of Boston Technology and their new firm International Wireless, with Mexican businessman
Prodigy continued to operate as it had previously, while Telmex provided Internet access under the Prodigy brand in Mexico and other parts of Latin America, with some services provided by Prodigy Communications in the US.
Prodigy went public in 1999, trading on the NASDAQ under the symbol PRGY.
On November 6, 2001, SBC purchased 100% interest in Prodigy and brought it private. On November 14, 2001, SBC and
Headquarters
Prodigy's first headquarters was in White Plains Plaza in White Plains, New York.[19] Prodigy announced plans to renew its lease in August 1992, occupying all 340,000 square feet (32,000 m2) of space in the building.[20][21] In 1992, the facility had 1,000 employees.[20]
In 2000, the company announced that it would move its headquarters to
Innovation
Unlike many other competing services, Prodigy started with flat-rate pricing. When Prodigy moved to per-hour charging for its most popular services in June 1993, tens of thousands of users left the service.
Prodigy was also one of the first online services to offer a user-friendly GUI when competing services, such as CompuServe and GEnie, were still text-based. Prodigy used this graphical capability to deploy advertising, expecting it to result in a significant revenue stream.
Prodigy offered online banking, stock trading, advertising and online shopping before the World Wide Web became widely used, but was largely unable to capitalize on these first-mover advantages. Decades later, IBM, which now owns some of the original Prodigy patents, continues to sell licenses for basic ecommerce concepts.[25]
Prodigy was a forerunner in caching data on and near users' personal computers to minimize networking and server expenses while improving the experience for users.[26][14]
Prodigy's legacy architecture was novel at the time and anticipated much of current web-browser technology. It leveraged the power of the subscriber's PC to maintain the session state, handle the user interface and process applications formed from data and interpretative program objects largely pulled from the network when needed. At a time when distributed objects were handled by RPC equivalents, Prodigy pioneered the concept of returning interpretable, platform-independent objects[clarification needed] to the caller for subsequent processing.[27][28] This approach anticipated innovations such as Java applets and JavaScript.[27][29] Prodigy also helped pioneer true distributed object-oriented client-server implementations as well as incidental innovations such as the equivalent of HTML frames and prefetching technology.[27][28][30] Prodigy patented its inventions, which continue to be relevant and valuable.
Growth
By 1994, Prodigy became a pioneer in selling "dial-up" connections to the World Wide Web and sold hosting services for Web publishers.
Prodigy regularly became the focus of discussions on The Howard Stern Show in the mid-nineties. Numerous shows were devoted to it. In addition, Howard met face-to-face with people he had talked to in Prodigy chat groups under a pseudonym. Howard was the most prominent radio name in America, gaining excellent ratings at the time. So it could only have been a positive for the Prodigy brand.
As the company shifted from its focus on its exclusive "Prodigy Classic" content and started transitioning to "Prodigy Internet" as an ISP in the late 1990s, Prodigy found itself competing with many other lower-priced ISPs, and the price didn't support the value of the Prodigy Internet exclusive content available for members. In a letter to members, Prodigy explained that upgrades to Prodigy Classic to resolve its Y2K issues were just too expensive and that it felt investing in Prodigy Internet was the best long-term strategy, as many of the popular services offered by Prodigy Classic could be found elsewhere. This decision was consistent with what other online service providers (AOL, CompuServe, MSN) were doing at the time. Still, with these providers competing primarily on ease of ISP setup rather than exclusive content, the retention value was lost. Many members found more affordable ways to access the online content and services they were used to.
In 1999 the company, now led by a cadre of ex-MCI executives to turn the brand around, became 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.
Acquisition
In 2000, with subscriber growth exploding and brand attributes at an all-time high, Prodigy explored several partnership deals, including what would have been an unprecedented three-way merger with
Attempts by SBC to sell the Prodigy brand became public knowledge on December 9, 2005.[31]
In late 2006, SBC purchased
Through 2009, the domain www.prodigy.net redirected to my.att.net, which appeared to be a Yahoo!-based content and search portal mainly linking to other online services.
AT&T stopped serving Prodigy-created webpages in 2011,[32] severing yet another tie with the brand.
As of March 6, 2024, www.prodigy.net redirects to https://currently.att.yahoo.com.
Prodigy in Mexico
In Mexico, Prodigy Internet is the main ISP with an estimated 92% of market share. It is also the leader in
See also
- AT&T Yahoo!– formerly SBC Yahoo!
- Stratton Oakmont, Inc. v. Prodigy Services Co.
- British Telecommunications plc v. Prodigy
References
- ^ Tech Republic: "The Pre-Internet Online Service That Didn't Live Up To Its Name
- ^ Peter H. Lewis (November 29, 1994). "The Compuserve Edge: Delicate Data Balance". The New York Times.
- ^ Shapiro, Eben. "THE MEDIA BUSINESS; New Features Are Planned By Prodigy", The New York Times, September 6, 1990 (The French Minitel had one million, but was used mainly from passive low-cost ASCII/Teletex terminals). Accessed February 4, 2008. "Prodigy has become the second-largest and fastest-growing computer-information company since it was introduced in 1988. It has 465,000 subscribers, compared with more than 600,000 for Compuserve Information Services, a unit of H & R Block Inc."
- ^ a b Glenn Rifkin (November 8, 1993). "At Age 9, Prodigy On-Line Reboots". The New York Times.
- ^ "CBS Venture One videotex market test". InfoWorld. September 13, 1982. p. 6.
- ISBN 978-1430208709.
- ^ "Trintex CBS-IBM-Sears videotex venture". Computerworld. May 21, 1984. p. 113.
- ^ Tom Shea, Big firms team up on videotex project, InfoWorld, March 12, 1984
- ^ a b c "Prodigy Communications Corporation History". FundingUniverse.com. Retrieved July 17, 2021.
- ^ a b "Y2K Shuts Down Prodigy Classic". InformationWeek. 1999-01-25. Retrieved 2016-03-16.
- ISSN 0887-7661.
- ^ Atlantic magazine: "Rebuilding Prodigy" July 12, 2014
- ^ Barnaby J. Feder (October 24, 1991). "Computer Concern". The New York Times.
- ^ a b Alsop, Stewart (November 15, 1993). "IBM's vision may be clearing but realizing its focus is years away". InfoWorld. Retrieved October 3, 2017.
- ^ Edwards, Benj (July 12, 2014). "Where Online Services Go When They Die". The Atlantic. Retrieved 4 September 2016.
- ^ Lewis, Peter H. "Sears, I.B.M. Near a Deal To Sell Prodigy". The New York Times, May 8, 1996. Accessed November 13, 2007. "A person familiar with the agreement said I.B.M. and Sears had agreed to accept as little as $100 million for Prodigy, in effect writing off more than $1 billion they had invested in the online venture during the last decade."
- ^ PRGY. Google Finance.
- AT&T Inc.November 22, 1999. Retrieved June 15, 2010.
- ^ "Aerosmith to appear on PRODIGY in Chat Stadium; legendary band promotes "cyber-rights"." Business Wire. November 22, 1994. Retrieved on January 11, 2010. "White Plains Plaza is Prodigy's headquarters and houses..."
- ^ a b "Article: Prodigy takes 340,000 sf at White Plains Plaza. (Prodigy Services Co. renews lease of commercial space in White Plains, New York)." Real Estate Weekly. August 19, 1992. Retrieved on January 11, 2010.
- ^ "MetLife to renovate at White Plains Plaza. (Metropolitan Life Insurance Co. plans renovation of office complex in White Plains, New York)." Real Estate Weekly. March 11, 1992. Retrieved on January 11, 2010. "Prodigy has renewed its lease at White Plains Plaza, taking the entire 340000."
- San Antonio Express News. June 24, 2000. Business 1D. Retrieved on January 11, 2010.
- Austin Business Journal. August 3, 2000. Retrieved on January 11, 2010.
- ^ Ladendorf, Kirk. "Prodigy reports losses for quarter and year." Austin American-Statesman. February 28, 2001. C1. Retrieved on January 11, 2010.
- ^ Nocera, Joe (2018-08-13). "IBM Wallops Groupon With a Vintage Patent". Bloomberg.
- ^ U.S. Patent 5,594,910
- ^ a b c U.S. Patent 6,199,100
- ^ a b U.S. Patent 5,347,632
- ^ Riordan, Teresa. "Patents;Prodigy's patent is being debated as a possible threat to Sun Microsystems' Java language.", The New York Times, February 5, 1996. Accessed November 28, 2007.
- ^ U.S. patent 6,275,852
- ^ Olsen, Stefanie (December 9, 2005). "Prodigy up for sale". CNet News. Retrieved February 18, 2011.
- ^ "Discontinuation of Prodigy Personal Web Pages (PWP) Support". AT&T. Archived from the original on June 29, 2011. Retrieved March 5, 2011.
- ^ "Internet service providers Mexico - Directory".
Further reading
- "Founding Prodigy Chief Created Online Services for Consumers", Wall Street Journal obituary for Ted Papes
- "Where Online Services Go When They Die: Rebuilding Prodigy, one screen at a time" Atlantic magazine, July 12, 2014
External links
- Official website (United States) at the Wayback Machine (archived October 22, 1996)
- Official website (Mexico) at the Wayback Machine (archived January 2, 2006)
- Prodigy Service Preview (1990) at the Internet Archive
- Screen shots of the Prodigy login screen and games at VintageComputing.com
- Screen shots from Square Off, a Prodigy math game
- Square Off recreation by Kim Moser
- Slide show of Prodigy graphic screens at the Wayback Machine (archived March 8, 2016)
- Recreation of the Prodigy Mad Maze game
- Prodigy Communicate, ex-user forum
- Product Design Document for Prodigy (via ZiffNet, circa 1992)