Prodigy Communications, one of the first online services, said Friday it plans to sell shares in an initial public offering.
The filing with the Securities and Exchange Commission did not disclose the price and number of shares to be offered. Prodigy, based in White Plains, New York, said the timing of the offering will be determined by market conditions, but that it doesn't expect to come to market before November.
The news comes on the heels of a successful public offering by online auctioneer eBay, whose stock nearly tripled in its first day of trading Thursday. EBay (EBAY) was the first IPO to come to market in a month because investors had been too worried about global market volatility to look at new issues.
Prodigy, once the leading consumer online service in the United States with more than 2 million members, was founded in 1984 as a joint venture by International Business Machines (IBM), Sears, Roebuck and Co. (S), and CBS (CBS). It was the first major effort to make an online service easy for ordinary people to use and presaged the success of a similar approach by America Online. But Prodigy was eventually eclipsed by AOL and the advent of the Internet.
In 1996, IBM and Sears sold Prodigy to a group of investors backed by International Wireless, a telecommunications investment group controlled by Mexican industrial firm Grupo Carso SA de CV, for US$250 million -- far below the more than $1 billion invested by Prodigy's founders.
Earlier this year, Prodigy handed content responsibility to Web navigation company Excite. In July, Mexican phone company Telefonos de Mexico invested $49 million in Prodigy.
"Although AOL dominates the Internet access space, it's still a highly fragmented industry with opportunities for smaller players, especially one with the brand recognition that Prodigy has," said Ryan Jacob, portfolio manager for The Internet Fund.
The Prodigy offering will be lead-managed by Bear, Stearns & Co. and BancBoston Robertson Stephens.
Prodigy was the first online services geared toward consumers for entertainment and shopping. In the early 1990s, AOL trailed a distant third behind Prodigy and H&R Block's CompuServe service. In the time since, AOL has surged to 13 million subscribers, not counting 2 million additional subscribers on CompuServe, which it acquired earlier this year.
Reuters contributed to this report.
