Curtain to close on Prodigy Classic
The firm will retire its 11-year-old Prodigy Classic online service, and it is pointing a finger at the Year 2000 bug as one of the reasons for the service's demise.
The online service's 208,000 subscribers on Friday received email from Prodigy Communications chief executive Samer Salameh announcing the October 1999 retirement of Prodigy Classic, which launched in 1988.
The company has begun a concerted effort to sign the soon-to-be homeless Prodigy Classic subscribers to its other offering, called Prodigy Internet, which has 433,000 subscribers as of September 1998.
Salameh cited looming problems with the Y2K bug as part of the firm's decision to sunset Prodigy Classic. Company spokesperson Dan Levine added that other necessary upgrades to the aging proprietary architecture were a factor as well. Expenses associated with those overhauls would have been "in the millions," Levine said.
In addition to the distinct interface of the system's architecture, Prodigy Classic users got some proprietary content and e-commerce resources as well. Prodigy Internet, launched in 1996, features content programmed by Excite, which last week agreed to be acquired by cable Internet service and content provider @Home Network.
Both of Prodigy's services cost $19.95 per month.
The announcement of Prodigy Classic's demise comes as the company prepares to make its initial public offering.
One analyst frowned on Prodigy's decision to retire Prodigy Classic, noting that Classic fees still accounted for a "substantial amount" of the company's revenue.
"They have this dinosaur system alongside the ISP, and they have not had the easiest time converting users from the former to the latter," said Jupiter Communications analyst Adam Schoenfeld. "Shutting down Prodigy Classic should have a deleterious effect on their revenues. I think this points out the very, very poor state of Prodigy's business overall."
Prodigy declined to respond to Schoenfeld's comments, citing the quiet period imposed on the company because of its impending IPO.
But Prodigy's Levine noted the company's aggressive efforts to retain the refugees from the Classic service, efforts that will include letting those who sign up as Prodigy Internet subscribers continue to use Prodigy Classic through its October expiration date. Those users also will get a version of the Prodigy Internet home page that resembles the Classic interface.
The fate of Prodigy Classic's proprietary content is unclear, Levine said.
"This was a really tough decision we had to make, but it's very important to us strategically and financially," Levine said. "We and our partners would have had to make a tremendous infrastructure investment, and instead we need to invest in the future in an open-standards environment."