Control Data Corp. will gain a financial interest in Source Telecomputing Corp., the Mclean-based "information utility" subsidiary of Reader's Digest.
The Minneapolis-based computer manufacturer and computer services company and Reader's Digest Association announced the signing of a letter of intent that calls for Control Data to invest somewhere between $5 million and $10 million in The Source. Further negotiations will determine what part Control Data's line of data services might play in The Source's offerings. Control Data had $4.3 billion in revenues in 1982.
The Source--purchased by Reader's Digest in September 1980--allows consumers with personal computers or computer terminals to link by phone lines to large "data bases" for retrieving news, horoscopes, biorhythms and other information.
Subscribers to The Source also can play electronic games and send messages to each other through the computer network. A Source spokesman said the company has 30,000 subscribers and is adding 2,000 subscribers a month. The company, which has been losing money, says officially that it expects to be profitable by mid-1984. "This is a market that's just starting to explode," says Mike Rawl, a Source spokesman.
A spokesman for Control Data said the company wants to invest in The Source because it is "moving into the services area and this is a further extension of our interest by going to consumers as customers."
Control Data has considerable investment in computer-based learning systems, and it is very possible that the company would be interested in The Source as an outlet to market them. The Source's Rawl suggests that the letter of intent reflects his company's interest in "pooling resources" with a technology company.