What's next for Prodigy

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Even though Prodigy Services Co. is out from under the weight of Sears, Roebuck & Co. and IBM Corp., the company still faces tough challenges.

Prodigy on Sunday announced its acquisition by International Wireless, a communications company with a range of investments, and Prodigy management, including Ed Bennett, the company's president-CEO. Joining as a financial and strategic partner is Grupo Carso, a Mexican telecommunications company.

Terms of the transaction weren't disclosed, although an executive close to the company said the price tag was about $250 million, well below the $1 billion-plus invested by IBM and Sears.

"I'd like to feel confident that there's enough money in the deal to keep the business alive," said Emily Green, director of the People & Technology Strategies group at Forrester Research, Cambridge, Mass. "How much time did they buy? That I don't understand."

Little is known about International Wireless, also based in Cambridge. In an e-mail to Prodigy members, Mr. Bennett touts the company's interests in online services and international Internet content, adding "Look for some intriguing new content to come from this!" But exactly what International Wireless can provide is unclear.

Prodigy's immediate focus is on moving to the Internet platform and continuing to develop new and unique content. What's clear from the buyout is that the online company will no longer play in the big leagues of America Online and CompuServe, Ms. Green said.

"I think that their opportunity is to be a new-age lightweight opportunity on the Web," she said.

For Sears, it's back to basics. Unloading Prodigy is part of the retailer's plan to return to its retailing roots, a spokesman said. He declined to comment on financial terms of the deal.

Copyright May 1996 Crain Communications Inc.

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