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ONLINE EXECS DO THE CYBERSPACE SHUFFLE COMMERCIAL PLAYERS TAP SMALL TALENT POOL AS RIVALRIES HEATUP

By Published on .

The online services industry is beginning to resemble a chessboard as senior executives jump from place to place in search of the next big thing.

On the same day last week that Mark Walsh announced he was stepping down as president of General Electric Co.'s Genie to join America Online, it was revealed that Prodigy executive Scott Kurnit was switching to MCI to oversee its Internet efforts as president, Information Services Co. (see story on this page).

Mr. Walsh-who was at Delphi for only seven months-was named senior VP-general manager, AOL Branded Internet Services.

Both moves came less than a week after Delphi Internet Services Co. Exec VP-Worldwide Marketing Susan D. Goodman resigned to return to running the consultancy that bears her name. Ms. Goodman was a consultant to Delphi for six months but was named to her post just last month. She is succeeded by Kathryn Russell, formerly VP-business marketing and sales.

Delphi also raided Microsoft Corp. last month, hiring its interactive media director, Mark Benerofe, as exec VP-general manager, consumer services.

While the executive moves were unrelated on the surface, observers said there was a common bond.

"Personnel movements at a senior level at three major services within a week-these are the first visible scratchings of the shakeout that's going to come," said Arnold Huberman, president of executive recruiter Arnold Huberman Associates, New York.

Commercial services have been adding subscribers rapidly, and new players are entering the field. Looming over them is the shadow of the Internet and the World Wide Web. The major players are seeking executives who can sort it all out.

"There seems to be a limited amount of talent to go around, especially as more companies expand their operations," said Mike Rinzel, analyst at Jupiter Communications Corp., New York. "It's still a very small industry."

All three of the services were dealt a blow by the executive changes. Genie will announce an overhaul of its service today. And Delphi is gearing up for a relaunch and is in the midst of an agency review.

But Prodigy is hit the hardest. During his two years as exec VP-consumer products, marketing and development, Mr. Kurnit spearheaded a major overhaul and became the public face of Prodigy in dealing with the media and content providers.

A fierce competitor, he launched a number of initiatives, most notably the introduction of a Web browser earlier this year, a first among commercial services.

Prodigy, owned by IBM Corp. and Sears, Roebuck & Co., can't afford setbacks. Its subscriber base has remained flat even as America Online soared into the top spot in the field.

A Prodigy spokesman indicated a raid on the competition is not out of the question as it seeks to replace Mr. Kurnit: "There's a game of musical chairs going on right now and I wouldn't be surprised if Prodigy plays a role in that."

Some believe Mr. Kurnit had grown frustrated with Prodigy's bureaucracy, a view he seemed to confirm when discussing why he joined MCI.

"The first thing that was attractive to me was the speed at which MCI moves," he said. "It was clear to me that we were speaking each other's language."

That language is the Internet. "The commercial services that adapt open standards will flourish," Mr. Kurnit said. "The ones that continue to see the Internet as an appendage will evaporate."

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