Prodigy (ISP)

Prodigy Communications Corporation operated a dialup service (a sort of "mega-BBS") for home computers in the United States before the advent of the Internet. Although Prodigy claimed it was the first consumer online service, CompuServe actually predated it by several years. However, Prodigy was one of the first to offer a user-friendly GUI, while competing services, such as CompuServe and GEnie, were text-based. Prodigy used this graphical capability to provide heavy advertising, which it hoped would bring additional revenue.

Prodigy was founded in 1984 as a joint venture between computer manufacturer IBM, US retailer Sears, and television network CBS. CBS left the venture in 1986, and the service finally launched in 1987. It was bundled with IBM's consumer-oriented PS/1 line of computers, and thanks to aggressive marketing in various magazines, soon had more than a million members. Also, at this time, many people may have not had local access numbers for other online services, instead having to call long-distance. However, due to the joint venture, if there was a Sears local to you, it was likely you had a local Prodigy number, which certainly helped expand the service as well.

Initially, Prodigy had hoped that its service would form a substantial online shopping resource. When Prodigy members inevitably spent far more time communicating with each other via e-mail and numerous topic-specific message boards than making purchases, Prodigy actually tried to discourage this by altering their fee structure. This instead forced customers away. The growth of the Internet into homes in the mid 1990s further hurt Prodigy, who in 1994 became the first of the early-generation dialup services to offer access to the World Wide Web and to offer Web page hosting to its members. Since Prodigy was not a true internet service provider, programs that needed an Internet connection, such as Internet Explorer and Quake multiplayer, could not be used with the service. Prodigy developed its own web browser, but it lagged well behind the mainstream browsers in features. Soon, the company retooled itself as a true internet service provider, making its main offering Internet access branded as Prodigy Internet. The original dialup service was rebranded as Prodigy Classic. Prodigy Classic folded in November 1999 because its aging software would not be updated for Y2K. In the end, the service had 209,000 members.

IBM and Sears sold their interests in Prodigy in 1996 for $200 million. It was estimated that the two companies had invested more than $1 billion into the service since its founding. Prodigy went public in 1999. It was bought out in November 2001 by SBC Communications.

Prodigy was accused in late 1990 and early 1991 of spying on its users; this was one of the first online privacy scares. The evidence offered was bits and pieces of user data showing up in two files: STAGE.DAT and CACHE.DAT. Prodigy contended that the data was never transmitted, but rather their software was taking unused disk space and not zeroing it before using it, thereby mixing Prodigy's data with deleted user files. However, some users claimed user data appeared even on freshly formatted disks that had Prodigy installed on them. Plus, it was unclear whether these data files were ever transmitted to Prodigy or used exclusively for local storage. Probably because of the bad publicity, Prodigy sent all of its users (that requested it) a 5 1/4" and a 3 1/2" labeled "Prodigy Stage/Cache Utility Software". These floppies contained a program that, when run, would correct the existing STAGE.DAT and CACHE.DAT files, eliminating the spurious data within these files.

Prodigy also was accused of heavy-handed censorship of its users, for a time banning the mention of other users in public forums. The most infamous example of this was a coin collector's message being banned because it contained the phrase Roosevelt dime — there was also a user of the service named Roosevelt Dime. Although unconfirmed, it was rumoured that any criticism of the Prodigy service in the public forums were also deleted. When "undergrounds" became popular, which were shared accounts where users communited by sending private messages back to the same account, thus avoiding the 30 free message limit, even saying the phrase " UG " could get a message automatically deleted.

Prodigy began the concept of Internet Communities. There was a Content Department responsible for creating and developing different Content Areas. These Content Areas each had a Prodigy Producer who gave contracts to Prodigy members who would receive monthly stipends to assist in running the communities. Each community consisted of a Web Site, a Chat Area with different rooms, and a Bulletin Board.

Unlike many other services, Prodigy started out with flat-rate pricing. In a reverse of the trend seen with most other services, though they changed their pricing later, Prodigy went from flat-rate pricing to hourly rates in June 1993, causing a large exodus from the service.

When Prodigy became Prodigy Internet in 1996, after being bought by Cable and Wireless, a decision was made to get rid of the Content Department made up of the Producers. It relied on the contract-holders to run the various communities and the only contact they truly had with Prodigy Employees was the check that they would get on a monthly basis. This decision turned the Prodigy Communities into Internet wastelands, with missing links on web pages, empty chatrooms, and inactive bulletin boards. Many sophisticated users avoided or stopped using the service for these reasons.

In the mid-1990s, when AOL was derided for its busy signals and other problems, Prodigy ranked high in consumer satisfaction and reliability surveys. However, at the time of its buyout, it was dwarfed in size by AOL and MSN. The brand name survives as a subsidiary of SBC.