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CompuServe may go continental

CompuServe is vying with Deutsche Telekom for a stake in languishing Internet service provider Europe Online.

Online service CompuServe is competing with German phone company Deutsche Telekom for a stake in languishing Internet service provider Europe Online.

Europe Online, which has 25,000 subscribers in Europe, has been looking for a new backer since its largest shareholder, German publisher Burda, announced last month that it intends to pull out of the venture.

Although CompuServe and Deutsche Telekom have made offers for the company, only one is likely to join Europe Online as a stockholder, according to the Wall Street Journal. A decision on the deal could be made as early as Friday.

CompuServe, the second-largest proprietary online service, is viewing Europe Online as a way to expand its already-sizable subscriber base in the European ISP market. The company has 700,000 subscribers there.

Deutsche Telekom, with more than 1 million subscribers to its T-Online Internet service in Germany, is looking to use Europe Online to expand into France and the United Kingdom.

Early speculation after last month's decision by Burda to sell its stake in Europe Online was that CompuServe and America Online, which has about 200,000 European members, would be the main competitors for the company's subscriber base. But Deutsche Telekom emerged as a bidder late last month.

Related story:
Europe Online loses key investor