Prodigy, which has seen its position slip to the nation's fourth largest subscriber-based online service behind America Online, CompuServe, and relative newcomer Microsoft Network, has already used half the funds and will draw down the remainder as needed, said Mike Darcy, a company spokesman.
The company plans to use the funding to continue improvements to its Prodigy Internet, its new Web-based service, as well as international expansion, and upgrades to its networking facilities.
"The investment underscores confidence in the turnaround progress achieved, and going forward as we position ourselves as the world's first and largest super Internet service provider," said Paul DeLacey, president and chief executive, in a statement.
Making the added investment are Carso Global Telecom S.A. de C.V. and Greg Carr, Prodigy chairman. Details of their stake in the private company were not disclosed, Darcy said.
Carr, as former chairman of International Wireless and with the backing of Carso Global, last year acquired Prodigy Services from IBM and Sears for $250 million. International Wireless was then merged into Prodigy.
"The chairman and president are looking at an [initial public offering] track, but nothing has been finalized," Darcy said. "An IPO sometime next year is not unreasonable, however."
The company over the course of the year has changed its business model to offer a simpler service with reliable Internet access and a few key enhancements, rather than concentrate on developing original content.