Hooked Up to the Max

For the big three online services -- CompuServe, Prodigy and America Online -- this was the year it all fell into place. The computers were cheap. The modems were fast. The infohighway buzzwords were on everybody's lips. "It's like Mars and Jupiter coming into alignment," says Maurice Cox, president of CompuServe, the largest (2.25 million subscribers) of the field. Upstart America Online grew at such a rapid clip -- an extraordinary 200% in the past 12 months -- that subscribers complained of busy signals and its stock was whipsawed by takeover rumors (the most recent: that cable-TV mogul John Malone wants to buy a big stake). Even Prodigy, the troubled online service that has reportedly swallowed $1 billion of its co-owners' (IBM and Sears) shrinking capital, seems to have turned the corner and is finally showing a profit.

But wouldn't you know, just when the money is starting to roll in, the foundation on which the Big Three built their empires is starting to look a little shaky. Tough new competitors are looming on the horizon, some 40,000 small local and regional systems are coming from behind, and -- most ominously -- the whole idea of competing commercial computer networks is being undermined by the network that connects them all: the Internet. "Don't look now," warns the headline on an Internet article in the current issue of Wired magazine, "but Prodigy, AOL and CompuServe are suddenly obsolete."

Until quite recently, the Internet offered no serious competition. Developed as a research network with no central management system, it was sprawling, unruly, disorganized and almost impossible to navigate. Getting around the Net was like trying to find your way in a foreign city where the streets have no signs, maps are nonexistent, and the locals don't much cotton to strangers' asking questions.

The big online services, by contrast, are the shopping malls of cyberspace. They are designed to provide all the goods and information services any paying customer might want -- under one roof. CompuServe, for example, offers hundreds of news and information sources, thousands of databases, tens of thousands of free computer programs and plenty of gathering places where fellow subscribers can get together to chat. With a single telephone call, you can read the news, look up a stock quote, give some advice, make a friend, book a flight, check the weather, buy a raincoat and order a bunch of flowers.

You would find a lot of the same things on the Internet, but you would have to know where to look. And because the Internet is a decentralized network rather than a single computer system, you have to make a fresh connection to a remote machine every time you want to get something done. As long as getting around the Net required memorizing computer addresses and mastering programs with names such as FTP and Telnet, most computer users preferred to window- shop at the online malls.