IBM says hasta la vista Prodigy

Big Blue and partner Sears Roebuck have sold the Prodigy online service to a Mexican investment company for nearly $250 million, managing to save themselves a little money with the ailing company.

International Wireless, the Mexican consortium, has paid under the odds as the two US giants originally wanted to sell Prodigy for $1 billion.

But its share of the online services market has continued to decline, like other companies over the last year, as the Net browsing market exploded.

The consortium is expected to use the Prodigy name to develop online services for Spanish-speaking Americans, including Mexicans and the large Hispanic population in the US.

Online services are presently dominated by US companies in the English language, and although there is considerable interest in South America, there are few providers.

Sears has been trying to sell Prodigy since the end of last year and IBM has its own plans for online services based on its acquisition of Notes.

More blood was shed in the US as provider Psinet slashed 15 per cent of its workforce and relaunched itself in the face of an onslaught from the massive AT&T.

That may be replicated in the UK as British Telecom offers its Internet provider services, targeting the 130 providers in the UK.