Worldcom likely to buy Compuserve
Article Abstract:
Worldcom intends to purchase CompuServe for nearly $1.2 billion in stock and sell CompuServe's subscription to America Online, according to industry insiders. Terms of the complex three-way deal call for Worldcom to retain CompuServe's high-speed telecommunications lines and Internet gateways. America Online would sell ANS, its Internet telecommunications unit, to Worldcom in exchange for CompuServe's 2.6 million subscribers worldwide and around $175 million in cash from Worldcom. Worldcom, the fourth-largest US long-distance phone company, and America Online also would begin a large supplier-major customer relationship. Worldcom's Internet services subsidiary, UUnet Technologies would widen its size and reach. H&R Block presently owns the majority of CompuServe. America Online, which in Sep 1997 said it retains more than 9 million subscribers, would strengthen its lead among major on-line services. Microsoft's Microsoft Network ranks second with 2.3 million subscribers.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
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Questions about America Online's strategy
Article Abstract:
America Online (AOL) has been experienced heavy losses for the past six months as shareholder equity fell from $512.5 million in June 1996, to $38.8 million in Dec 1996. Analysts question AOL's ability to keep ahead of its current liabilities and wonder if the company will have enough cash flow in 1997 to shut down offices, layoff workers, get rid of outdated marketing materials and refund customers that have been unable to connect to the company's service. AOL is also experiencing a fall in gross profit margins, important due to the company's change in its pricing policy. The flat rate for unlimited service is the main reason the company has been experiencing losses for the past six months according to industry analysts.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
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Comment about this article or add new information about this topic:
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