CompuServe is an internet service provider (ISP) that was founded in 1969 as a computer time-sharing service, originally as a way to use the mainframe computers of H&R Block outside business hours. The Columbus, Ohio-based CompuServe drove the initial emergence of the online service industry. 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. By 1982, CompuServe had formed its Network Services Division to provide wide-area networking capabilities to corporate clients.
CompuServe also led the interactive services industry overseas, entering the international arena in Japan in 1986 with Fujitsu and Nisso Iwai, developing a Japanese-language version of CompuServe called NIFTYSERVE in 1989. In the late 1980s, it was possible to log into CompuServe via worldwide X.25 packet switching networks, but gradully 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 thousand of users visiting its thousands of moderated forums. 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 introduced a far cheaper flat rate, unlimited time, price plan in the US to compete with CompuServe's hourly charges and this combined with massive AOL advertising campaigns caused significant loss of customers until CompuServe responded with a similar plan of its own.
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 carriying 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.
In 1997 AOL announced its intention to acquire the company, at that time Compuserve represented around 12% of the US ISP market. A complex deal was set up involving WorldCom to avoid anti-trust action, AOL then having almost 40% of the US ISP 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.
As the internet grew in popularity, 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 couldn't address because they hadn't yet introduced universal WWW access. CompuServe forums today have largely ceased to provide the very broad coverage of the past and are more tightly linked to CompuServe channels.
CompuServe's positioning is now as the value market provider with several million customers, as part of the AOL Web Products Group. Recent US 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. It is currently in version 7.0. 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, and is at version 4.0.2.
In September 2003 CompuServe added CompuServe Basic to its product lines, selling via Netscape.com and AOL offering 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 class="external">[1.