CS, Prodigy cozy up to MS too

Online services CompuServe and Prodigy are scrambling to get their names on the Windows 95 desktop next to Microsoft Network and America Online.

"We have interest in Microsoft, and we are happy that they have decided to include other online services on their operating system," Prodigy spokesman Mike Darcy said. Darcy declined to give specifics but said the companies are in "early discussions."

Sources close to CompuServe said the company is also engaged in preliminary negotiations with Microsoft.

Yesterday, AOL and Microsoft surprised the industry by announcing that the number-one online service will be bundled with the Windows 95 desktop and appear as an icon on the desktop alongside MSN. In return, AOL chose Microsoft's Internet Explorer as the built-in Web browser for its service. AOL stock closed yesterday at 57 1/2, up more than 9 points since the announcement.

While CompuServe just announced last Friday a deal with Netscape to use Navigator as its standard browser, the ability to appear magically on every new Windows desktop shipped is apparently too powerful a draw to resist.

As for Prodigy, which trails AOL and CompuServe as the number-three online service, a new infusion of subscribers is imperative for survival. Sears has been looking for a buyer for its 50 percent stake in the company.

Microsoft Chairman and CEO Bill Gates said yesterday that promoting other online services from its operating system's bully pulpit does not mean that the company is no longer interested in expanding MSN.

It does indicate, however, that Microsoft is now more interested in increasing its browser market share than in competing with the online services, which once complained vigorously to the Justice Department about Microsoft's practice of bundling MSN with Windows.