CompuServe, or CIS for short, was the first major commercial online service in the US, 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.
CompuServe was founded in 1969 in Columbus, Ohio as a subsidiary of Golden United Investment Company. Its first president, Jeffrey Wilkins, was the son-in-law of Golden United chief Harry Gard. CompuServe started as a computer time-sharing service, originally as a way to generate income from Golden United's mainframe computers outside business hours. It was spun off as a separate company in 1975 before being acquired by H&R Block in 1980.
In 1979, CompuServe became the first service to offer electronic mail capabilities and technical support to personal computer users. The company broke new ground again in 1980 as the first online service to offer real-time chat with its CB Simulator.
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 wasn't 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.
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 that time was a $5-$6 per hour service.
Reaching the peak
CompuServe led the interactive services industry worldwide, entering the international arena in Japan in 1986 with Fujitsu and Nisso Iwai, developing 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 called Dreamscape and 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.
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, and massive AOL advertising campaigns. AOL's combined marketing campaigns caused significant loss of customers until CompuServe responded with a similar plan of its own at $24.95 per month in late 1997.
As the internet 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.
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.
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 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).
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 has gone on to become almost universal for images that are not 24-bits, even though several competitors have attempted to take its place.
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  . He was cleared on appeal on November 17, 1999  . The requirement for censorship in Germany caused some loss of German members.
- CompuServe website
- CompuServe Pacific
- CompuServe UKde:CompuServe
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