CompuServe

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CompuServe, (in full, CompuServe Information Services, or CIS), was the first major commercial online service in the United States, dominating the field during the 1980s and remaining a major player through the mid-1990s when it was sidelined by the rise of GUI-based services such as America Online (AOL). Today the company operates as an Internet service provider (ISP), owned by AOL.

1 History
2 Reaching the peak
3 Purchase by AOL
4 Technology and law
5 External links

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History

CompuServe was founded in 1969 as Compu-Serv Network, Inc. in Columbus, Ohio as a subsidiary of Ilex Corporation. Its first president, Jeffrey Wilkins, was the son-in-law of Harry Gard, the founder of Ilex. The objectives of the new company were two-fold: to provide in-house computer processing support to Golden United Life Insurance Co., another Ilex subsidiary; and to develop as an independent business in the computer time-sharing industry, by renting time on its PDP-10 mainframe computers outside business hours. It was spun off as a separate company in 1975, trading on the NASDAQ under the symbol CMPU. In 1977, Comp-Serv's board changed the company's name to CompuServe Incorporated. In 1980, H&R Block acquired CompuServe. The purchase by H&R Block gave the company much needed cash to expand operations, and helped H&R Block diversify their tax-season biased earnings. CompuServe associates fondly called H&R Block's founder and chairman Henry Bloch, "Uncle Henry".

The original, 1969 dial-up technology was fairly simple — the local phone number in Cleveland, for example, was merely a foreign-exchange line to a modem in Columbus connected to a particular timesharing host system. Later, the modems were connected to DEC PDP-15 minicomputers that acted as switches so a phone number was not tied to a particular destination host. Finally, CompuServe developed its own packet switching network, implemented on DEC PDP-11 minicomputers acting as network nodes that were installed throughout the US (and later, in other countries) and interconnected.

The company was notable for introducing a number of online services to personal computer users. CompuServe began offering electronic mail capabilities and technical support in 1978 under the name Infoplex, and was also a pioneer in the real-time chat market with its CB Simulator service introduced in 1980.

Around 1981, CompuServe introduced their CompuServe B protocol, a file transfer protocol, allowing users to send files to each other. This was later expanded to the higher-performance B+ version, intended for downloads from CIS itself. Although the B+ protocol was not widely supported by other software, it was used by default for some time on CIS itself.

By 1982 the network had become extensive enough that they formed a Network Services Division to provide wide-area networking capabilities to corporate clients. This allowed customers to provide nationwide dial-up access to their own hosts, which typically were connected to CompuServe's network via X.25.

Later, the company forged alliances with private networks Tymnet and Telenet, among others, giving CompuServe the largest selection of local dialup phone connections in the country. Other networks permitted CompuServe access to still more locations, including international locations, usually with substantial connect-time surcharges. It was not unusual in the early 1980s to have to pay a $30-per-hour charge to connect to CompuServe, which at the time cost $5 to $6 per hour. This resulted in the company being nicknamed CompuSpend or Compu$erve.

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Reaching the peak

By the mid-1980s CompuServe was the largest online service in existence. Accounts could be bought in most computer stores (a box with an instruction manual and a trial account login) and awareness of this service was extremely high. The service continued to improve in terms of user interface and offerings, and in 1989 CompuServe purchased and dismantled one of its main competitors, The Source.

CompuServe also began to expand its reach outside the United States. It entered the international arena in Japan in 1986 with Fujitsu and Nisso Iwai, and developed a Japanese language version of CompuServe called NIFTYSERVE in 1989. Fujitsu and CompuServe also co-developed WorldsAway, a prototype interactive community featuring a virtual world now called VZones with newHorizones and Dreamscape worlds complete with avatars representing the participants. In the late 1980s, it was possible to log into CompuServe via worldwide X.25 packet switching networks (via the Telnet protocol), but gradually it introduced its own direct dialup access network in many countries, a more economical solution.

In the early years of the 1990s, CompuServe was enormously popular, with hundreds of thousands of users visiting its thousands of moderated Forums, forerunners to the endless variety of discussion sites on the Web today. Among these were many where hardware and software companies offered customer support. This broadened the audience from primarily business users to the technical "geek" crowd, some of which migrated over from the Byte Magazine's Bix online service, but over time CompuServe also attracted a broad general public.

In 1992 CompuServe hosted the first known WYSIWYG e-mail content and forum posts. Fonts, colors and emoticons were encoded into 7-bit text-based messages via the CompuServe navigation software NavCIS; covering DOS and early Windows 3.1 systems.

During the early 1990s the hourly rate fell from over $10 an hour to $1.95 an hour. In April 1995, CompuServe topped three million members and launched its NetLauncher service, providing WWW access capability via the Spry Mosaic browser. AOL, however, introduced a far cheaper flat-rate, unlimited-time price plan in the U.S. to compete with CompuServe's hourly charges. In conjunction with AOL's marketing campaigns, this caused a significant loss of customers until CompuServe responded with a similar plan of its own at $24.95 per month in late 1997.

As the World Wide Web grew in popularity with the general public, company after company closed their once busy CompuServe customer support forums to offer customer support to a larger audience directly through company websites, an area which the CompuServe forums of the time could not address because they had not yet introduced universal WWW access.

CompuServe forums today are more tightly linked to CompuServe channels.

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Purchase by AOL

In 1997, AOL announced its intention to acquire the company, at a time when CompuServe represented around 12% of the US ISP market. A complex deal was set up involving WorldCom to avoid anti-trust action, as AOL already held almost 40% of that market. The deal was completed in September of that year, CompuServe costing WorldCom $1.2 billion in an all-stock deal with H&R Block. The online services division of CompuServe was then sold to AOL for $175 million. In February of 1998 AOL made massive layoffs at CompuServe amounting to 54% of the company including almost all of the customer service department.

CompuServe is now positioned as the value market provider for several million customers, as part of the AOL Web Products Group. Recent U.S. versions of the CompuServe client software — essentially an enhanced web browser — use the Gecko layout engine developed for Mozilla, within a derivative of the AOL client and using the AOL dialup network. The previous Classic product remains available in the US and also in other countries where CompuServe 2000 is not offered, notably the UK and Asia-Pacific region. In Germany CompuServe 2000 was introduced in 1999 and abolished in 2001 because of failure on the German market, but the Classic product also remains available. However, since then CompuServe Germany has introduced its own products for dialup and DSL internet access, and its own client software. (called Compuserve 4.5 light)

In September 2003 CompuServe added CompuServe Basic to its product lines, selling via Netscape.com. AOL offered it to AOL members leaving that service, possibly in response to reports earlier that year that AOL was losing significant business to low-cost competitors. In the Pacific region (Australia, New Zealand, etc.) Fujitsu Australia runs the CompuServe Pacific franchise, which in 1998 had 35,000 customers. It is thought to have far fewer now thanks to CompuServe Pacific's pricing plans, which have not been changed since 1998 (for e.g., A$14.95 for 2 hours per month).

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Technology and law

One popular use of CompuServe in the 1980s was file exchange, particularly pictures. CompuServe introduced a simple black-and-white image format known as RLE (run-length-encoding) to standardize the images so they could be shared among different microcomputer platforms. With the introduction of more powerful machines, universally supporting color, CompuServe introduced the much more capable GIF format. GIF went on to become the de facto standard for 8-bit images on the Internet.

In 1995 CompuServe set what privacy advocates argued was a bad precedent by blocking access to sex-oriented newsgroups after being pressured by conservative Bavarian prosecutors. In 1997, after CompuServe reopened the newsfeeds, Felix Somm, the former managing director for CompuServe Germany, was charged with violating German child pornography laws because of the material CompuServe's network was carrying into Germany. He was convicted and sentenced to two years probation on May 28, 1998 [1] [2]. He was cleared on appeal on November 17, 1999 [3] [4]. The requirement for censorship in Germany caused some loss of German members.