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  Prodigy to Shut Down Online Service Over Y2K Problem

By Ted Bridis
Associated Press Writer
Friday, January 22, 1999; 11:19 p.m. EST

WASHINGTON Prodigy Communications Corp. notified the 208,000 subscribers of its pioneer "Prodigy Classic" online service Friday that it will shut down in October because of the Year 2000 computer problem.

The company said the so-called "Y2K" 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 nationwide explaining that the company's 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.

The announcement also was posted on the company's "Year 2000 Readiness Disclosure" Web site.

In electronic messages on Prodigy's discussion groups, customers expressed skepticism late Friday 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.

One subscriber called it a "pre-planned plot," and another said Salameh's e-mail was "nothing but deceitful writing" and "a complete, total excuse for issues they won't put in writing."

"Mainly, I can't stand the idea of being lied to," another subscriber wrote. "If they can't fix the Y2K deal, they should go out of business."

Executives couldn't be reached late Friday for additional comment.

Many computers originally programmed to recognize only the last two digits of a year won't 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's Classic service was launched nationally in 1990, years before the booming popularity of the Internet and its World Wide Web.

Prodigy, based in White Plains, N.Y., boasted 1.13 million 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.

America Online, the world's largest Internet provider, has more than 15 million subscribers.

Prodigy never was profitable. In 1996 and 1997, it incurred net losses of $114.1 million and $129.3 million, and it lost $47.6 million during the nine months that ended in September.

© Copyright 1999 The Associated Press

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