Purchase buoys Prodigy in consolidating industry;Baby Bell's stake gives No. 4 Net provider new access; strategy may falter.(Brief Article)

Crain's New York Business, December, 1999 by walsh, mark

In the ephemeral world of Internet shooting stars, Prodigy Communications Corp. is a survivor. The 15-year-old on-line pioneer proved that again late last month when it agreed to sell a 43% stake to Baby Bell SBC Communications in a stock transaction valued at $1.6 billion. The deal will vastly expand Prodigy's market and keep it competitive in the rapidly consolidating Internet service provider industry.

The deal allows Prodigy to begin offering high-speed digital subscriber lines, or DSL, in which SBC has been investing heavily. "This ensures that Prodigy will be one of the big remaining ISPs going forward," says James Friedland, an analyst at Volpe Brown Whelan & Co., who recently issued a "buy" recommendation on the stock. While Prodigy is...

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