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Y2K Forces Close of Online Service

January 23, 1999

WASHINGTON (AP) _ Citing the Year 2000 computer problem, Prodigy Communications Corp. is telling its 208,000 subscribers it will shut down its pioneer ``Prodigy Classic″ online service.

Prodigy notified customers nationwide by e-mail late Friday it could not avoid the effects of the so-called ``Y2K″ problem and by October must shut down one of the most well-established neighborhoods in cyberspace.

The company said the Year 2000 problem was not expected to affect the 433,000 subscribers of its newer ``Prodigy Internet″ service, launched in late 1996, and it encouraged its Classic subscribers to enroll there.

Prodigy’s chief executive officer, Samer Salameh, sent e-mail to subscribers explaining that the company’s 9-year-old Classic service was ``built using proprietary technologies that predate current Internet standards″ and the company’s engineers were ``unable to make them Y2K compliant.″

``I know that this announcement will be a disappointment to many of you,″ Salameh wrote.

Prodigy also posted the announcement on its Web site.

Subscribers used Prodigy’s own electronic bulletin boards to express skepticism that the Year 2000 problem was to blame for the service’s demise. Some openly suggested that the company manufactured the explanation to encourage them to migrate to its newer Internet service.

Many computers originally programmed to recognize only the last two digits of a year will not work properly beginning Jan. 1, 2000, when machines will assume it is 1900. Some computers can be reprogrammed, but many devices have embedded microchips that must be physically replaced.

Prodigy, based in White Plains, N.Y., did not explain in e-mail or on its Web site exactly how the Year 2000 problem manifested itself.

Prodigy’s Classic service was launched nationally in 1990, years before the booming popularity of the Internet and its World Wide Web. Rival services, such as America Online and CompuServe, dwarfed its subscriber base as they gradually concentrated on offering unadulterated access to the Internet.

Not Prodigy, which still requires Classic subscribers to use its awkward, proprietary e-mail software and Internet browser to venture beyond the confines of its own online content.

But the service’s strength was always its relatively civil discussion groups, where people gathered to talk about shared interests without the off-topic interruptions and insults so common among the Internet’s Usenet discussion areas.

Unlike the Internet, Prodigy uses censors who monitor its bulletin boards to ensure messages are appropriate and do not contain obscenities.

Prodigy boasted 1.13 million Classic subscribers in 1995, but that number has declined sharply in recent years as users fled to Internet service providers that offered faster, more reliable access to the Web.

For example, America Online, the world’s largest Internet provider, has more than 15 million subscribers. Prodigy Internet has grown from 7,000 subscribers in 1996 to 433,000 last year.

Prodigy incurred net losses of $114.1 million in 1996 and $129.3 million in 1997, and it lost $47.6 million during the nine months that ended in September.

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