PRODIGY--YES, PRODIGY--GOES GLOBAL DEPARTMENT OF EXHUMATION
By DAVID KIRKPATRICK

(FORTUNE Magazine) – Believe it or not, people still subscribe to Prodigy--you remember, the original online service, the one America Online left in its dust? In fact, there are 600,000 such souls, lonely but still logging on.

The online service may be doomed, but Prodigy the company is not. In June 1996, IBM and Sears unloaded the outfit on a group of investors who insiders say paid less than $100 million, or about $110 per subscriber. (The stock market currently values AOL's customers at $750 each.) The new guys plan to shut down the proprietary online service by the end of next year.

In its place they hope to create what Chairman Greg Carr, the company's second-largest shareholder, calls a Super ISP (Internet service provider). The Prodigy Internet service, started last October, already has 256,000 subscribers, making it the fourth-largest ISP in the U.S. Unlike the online service, Prodigy Internet gets terrific reviews for ease of use and reliability. Now Carr and crew are going global, launching Prodigy Internets in some unlikely spots, like China, Ghana, and Mexico.

No other American firm is being so aggressive about bringing the Internet to the developing world. Says Carr: "If it's this big in the U.S., let's be the entrepreneurs who show up first in the countries where it hasn't happened yet." Prodigy owns Africa Online, which has 5,000 subscribers. According to Bill McQuain, who supervises Microsoft's relationships with ISPs in Africa, Africa Online's aggressive marketing is one reason Internet usage in Kenya, Ivory Coast, and Ghana has grown 50% in the past six months.

Prodigy launched in China in April. So far, just 3,500 subscribers have signed on. This fall Prodigy makes its debut in Mexico, home of the company's biggest investor, Carlos Slim, chairman of Telmex, the telephone company. Carr and partners are developing content for the Mexican, Chinese, and African markets, and hope to make such content available to ethnic markets in the U.S.

Says Kate Delhagen of Forrester Research in Cambridge, Mass.: "The international strategy is interesting, and the U.S. ethnic markets are notoriously underserved. Prodigy has a lot of potential." The global push especially makes sense given the fact that the Baby Bells are expected to invade the U.S. ISP market this fall. Carr is unfazed, but as he well knows, Prodigy has a history of frittering away head starts.

--David Kirkpatrick