MindSpring buys Sprynet from AOL

To be completed this fall, the acquisition could add 180,000 customers to the 393,000-subscriber ISP.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
2 min read
Internet service provider MindSpring today announced it has acquired rival Sprynet for $35 to $40 million from parent company America Online.

The acquisition, which will be completed this fall, has the potential to add up to 180,000 Sprynet customers for the Atlanta, Georgia-based ISP. As of this past June, MindSpring said its subscriber base totaled 393,000 members.

The purchase price's variance reflects uncertainty in the number of users who will transfer over to MindSpring. The value per customer, assuming they all switch over, is estimated at $222.

This is not the first time Seattle-based Sprynet has been acquired. In fact, the ISP has changed many hands amid recent online service and access wars. In 1995, Sprynet was acquired by CompuServe, but was then transferred to AOL when the online giant completed its acquisition of CompuServe in February of this year.

Today's acquisition of Sprynet, which means it is now back into the hands of a company that's strictly an access provider, underscores how difficult it may be for online services to profit off of running ISPs, according to Ed Hansen, a MindSpring spokesman.

"AOL didn't really know what to do with a service as a stand-alone Internet service," he said.

The acquisition follows MindSpring's strategy to introduce a spate of TCP/IP services, such as IP telephony, to its users in the near future, Hansen pointed out.

Once before, AOL provided pure Internet access through a company called Global Network Navigator, better known as GNN. But when AOL reorganized and went to flat rate pricing in October 1996, it first folded GNN customers into its service and then killed the service altogether less than a month later.