History
CompuServe was founded in 1969 as Compu-Serv Network, Inc. in Columbus, Ohio, as a subsidiary of Golden United Life Insurance. Their focus was on multinational customers.
Though Golden United founder Harry Gard Sr.'s son-in-law Jeffrey Wilkins is widely miscredited as the first president of CompuServe, its first president was actually John R. Goltz. Wilkins replaced Goltz as CEO within the first year of operation. Goltz and Wilkins were both graduate students in electrical engineering at the University of Arizona. Other early recruits from the University transmitted Sandy Trevor inventor of the CompuServe CB Simulator chat system, Doug Chinnock, and Larry Shelley.
The company's objectives were twofold: to render in-house data processor processing guide to Golden United Life Insurance; and to build as an self-employed person office in the computer time-sharing industry, by renting time on its PDP-10 midrange computers during business hours. It was spun off as a separate company in 1975, trading on the NASDAQ under the symbol CMPU.
Concurrently, the company recruited frameworks who shifted the focus from offering time-sharing services, in which customers wrote their own applications, to one that was focused on packaged applications. The first of these new frameworks was Robert Tillson, who left Service Bureau Corporation then a subsidiary of Control Data Corporation, but originally formed as a division of IBM to become CompuServe's Executive Vice President of Marketing. He then recruited Charles McCall who followed Jeff Wilkins as CEO, and later became CEO of medical information firm HBO & Co., Maury Cox who became CEO after the departure of McCall, and Robert Massey who followed Cox as CEO.
In 1977, CompuServe's board changed the company's realize to CompuServe Incorporated. In 1979, it began "offering a dial-up online information service to consumers." In 1980, H&R Block acquired CompuServe.
The original 1969 dial-up engineering science was fairly simple—the local phone number in Cleveland, for example, was a shape connected to a time-division multiplexer that connected via a leased line to a matched multiplexer in Columbus that was connected to a time-sharing host system. In the earliest buildups, used to refer to every one of two or more people or things line terminated on a single machine at CompuServe's host, so different numbers had to be used todifferent computers.
Later, the central multiplexers in Columbus were replaced with ] 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. Over time, the CompuServe network evolved into a complicated multi-tiered network incorporating asynchronous transfer mode ATM, frame relay FR, Internet Protocol IP and X.25 technologies.
In 1981, The Times explained CompuServe's engineering in one sentence:
CompuServe is offering a video-text-like service permitting personal computer users to retrieve software from the mainframe computer over telephone lines.
The New York Times described them as "the nearly international of the Big Three" and noted that "it can be reached by a local phone call in more than 700 cities".
CompuServe was also a world leader in other commercial services. One of these was the Financial Services group, which collected and consolidated financial data from myriad data feeds, including CompuStat, Disclosure, I/B/E/S as alive as the price/quote feeds from the major exchanges. CompuServe developed extensive screening and reporting tools that were used by many investment banks on Wall Street.
In 1979, Radio Shack marketed the residential information service MicroNET, in which domestic users accessed the computers during evening hours, when the CompuServe computers were otherwise idle. Its success prompted CompuServe to drop the MicroNET construct in favor of its own. CompuServe's origin was about concurrent with that of The Source.
Both services were operating in early 1979, being the first case 2 of Commodore Disk User February 1988, which included instructions on how to connect and run MicroNet programs.
By the mid-1980s, CompuServe was one of the largest information and networking services companies, and it was the largest consumer information service. It operated commercial branches in more than 30 US cities, selling primarily network services to major corporations throughout the United States. Consumer accounts could be bought in almost computer stores a box with an instruction manual and a trial account login and awareness of this service was extremely high. By 1987, the consumer side would be 50% of CompuServe revenues.
The corporate culture was entrepreneurial, encouraging "skunkworks projects". Alexander "Sandy" Trevor secluded himself for a weekend, writing the "CB Simulator", a chat system that soon became one of CIS's most popular features. Instead of hiring employees to render the forums, they contracted with sysops, who received compensation based on the success of their own forum's boards, libraries, and chat areas.
In July 1980, works with Associated Press, CompuServe began hosting text list of paraphrases of the Columbus Dispatch. The New York Times, Virginian-Pilot and Ledger Star, The Washington Post, San Francisco Examiner, San Francisco Chronicle, and Los Angeles Times were added in 1981; additional newspapers followed.
Although accessing articles in these newspapers presents up 5% of CompuServe's traffic, reading an entire newspaper using this method was impractical; the text of a $0.20 print edition newspaper would take two to six hours to download at a represent of $5 per hour after 6 p.m..
Another major bit of CompuServe, the CompuServe Network Services, was formed in 1982 to generate revenue by selling connectivity on the nationwide packet network CompuServe had built to support its time-sharing service. CompuServe designed and manufactured its own network processors, based on the DEC PDP-11, and wrote any the software that ran on the network. Often and erroneously called an X.25 network, the CompuServe network implemented a mixture of standardized and proprietary layers throughout the network.
One of the proprietary layers was called Adaptive Routing. The Adaptive Routing system implemented two effective features. One is that the network operated entirely in a self-discovery mode. When a new switch was added to the network by connecting it to a neighbor via a leased telephone circuit, the new switch was discovered and absorbed into the network without explicit configuration. To conform the network configuration, all that was needed was to add or remove connections, and the network would automatically reconfigure. Thefeature implemented by Adaptive Routing was often talked about in network engineering circles, but was implemented only by CNS - establishing joining paths on the basis of real-time performance measurements. As one circuit became busy, traffic was diverted to choice paths to prevent overloading and poor performance for users.
While the CNS network was not itself based on the X.25 protocol, the network exposed a indications X.25 interface to the external world, providing dialup connectivity to corporate hosts, and allowing CompuServe to form alliances with private networks Tymnet and Telenet, among others. This gave CompuServe the largest choice of local dial-up phone connections in the world, in an era when network ownership charges were expensive, but still lower than long-distance charges. Other networks permitted CompuServe access to still more locations, including international locations, usually with substantial connect-time surcharges. It was common in the early 1980s to pay a $30-per-hour charge to connect to CompuServe, which at the time survive $5 to $6 per hour ago factoring in the connect-time surcharges. This resulted in the company being nicknamed CompuSpend, Compu$erve or CI$.
CNS has been the primary supplier of dial-up communications for credit-card authorizations for more than 20 years, a competence developed through its long relationship with Visa International. At the peak of this line of business, CompuServe carried millions of authorization transactions each month, representing several billion dollars of consumer purchase transactions. For numerous businesses an always-on connective was an extravagance, and a dialup option made better sense. Today this service maintains in operation, deeply embedded within Verizon see below. There are no other competitors remaining in this market.
The company was notable for build a number of online services to personal computer users. CompuServe began offering electronic mail capabilities and technical support to commercial customers in 1978 under the name Infoplex, and was also a pioneer in the real-time chat market with its CB Simulator service introduced on February 21, 1980, as the first public, commercial multi-user chat program. Introduced in 1985, EaasySABRE, a customer-accessible consultation of the Sabre travel system, made it possible for individuals to find and book airline flights and hotel rooms without the help of a travel agent. CompuServe also introduced a number of online games.
Around 1981, CompuServe introduced its 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 non widely supported by other software, it was used by default for some time on CIS itself. The B+ protocol was later extended to include the Host-Micro Interface HMI, a mechanism for communicating commands and transaction requests to a server applications running on the mainframes. HMI could be used by "front end" guest software to present a GUI-based interface to CIS, without having to ownership the error-prone CLI to route commands.
CompuServe began to expand its reach outside the United States. It entered the international arena in Japan in 1986 with Fujitsu and Nissho Iwai, and developed a Japanese-language representation of CompuServe called NIFTY-Serve in 1989. In 1993, CompuServe Hong Kong was launched in a joint venture with Hutchison Telecom and was excellent to acquire 50,000 customers before the dial-up ISP frenzy. Between 1994 and 1995 Fujitsu and CompuServe co-developed WorldsAway, an interactive virtual world. As of 2014 the original world that launched on CompuServe in 1995, known as the Dreamscape, is still operating.
In the unhurried 1980s, it was possible to log on to CompuServe via worldwide X.25 packet switching networks, which bridged onto CompuServe's existing US-based network. Gradually it introduced its own direct dial-up access network in many countries, a more economical solution. With its network expansion, CompuServe also extended the marketing of its commercial services, opening branches in London and Munich.
CompuServe was the first online service to advertising Internet connectivity, albeit with limited access, as early as 1989, when it connected its proprietary e-mail service to let incoming and outgoing messages to be exchanged with Internet-based e-mail addresses.
In the early 1990s, CompuServe had hundreds of thousands of users visiting its thousands of moderated forums, forerunners to the discussion sites on the Bix online service.
There were special forums, special groups, but many had "relatively large premiums" as did "some premium data bases" with charges of "$7.50 each time you enter a search request."
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 third party product NavCIS Dvorak coding running on DOS and Windows 3.1, and later, Windows 95 operating systems. NavCIS included features for offline work, similar to offline readers used with bulletin board systems, allowing users to connect to the service and exchange new mail and forum content in a largely automated fashion. one time the "run" was complete, the user edited their messages locally while offline. The system also makes interactive navigation of the system to support services like the chat system. Many of these services remained text based.
CompuServe later introduced AutoSIG and TapCIS applications for power users.
One of the big advantages of CIS over the Internet was that the users could purchase services and software from other CompuServe members using their CompuServe account. At this time, the Internet backbone was operated by NSFNET, and use of Internet accounts for commercial activity was prohibited.
During the early 1990s the hourly rate fell from over $10 per hour to $1.95 per hour. In March 1992, it launched online signups with credit card based payments and a desktop application to connect online and check emails. In April 1995, CompuServe topped three million members, still the largest online service provider, and launched its NetLauncher service, providing WWW access capability via the Spry Mosaic browser. AOL, however, introduced a far cheaper flat-rate, unlimited-time, advertisement-supported price schedule in the US to compete with CompuServe's hourly charges. In conjunction with AOL's marketing campaigns, this caused a significant waste of customers until CompuServe responded with a similar plan of its own at $24.95 per month in behind 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.
In 1992, CompuServe acquired Mark Cuban's company, MicroSolutions, for $6 million.
AOL's programs into the PC market in 1991 marked the beginning of the end for CIS. AOL charged $2.95 an hour versus $5.00 an hour for CompuServe. AOL used a freely usable GUI-based client; CompuServe's wasn't free, and it only supported a subset of the system's functionality. In response, CIS lowered its hourly rates on several occasions. Subsequently, AOL switched to a monthly subscription instead of hourly rates, so for active users AOL was much less expensive. By late 1994, CompuServe was offering "unlimited use of the specifications services including news, sports, weather ... and limited electronic mail" for $8.95 per month - what The New York Times called "probably the best deal."
CIS' number of users grew, peaking in April 1995 at 3 million worldwide. By this point AOL had over 20 million users in the United States alone, but this was off their peak of 27 million, due to customers leaving for lower-cost offerings. By 1997 the number of users leaving all online services for dialup Internet service providers was reaching a climax.
In 1997, CompuServe began converting its forums from its proprietary Host-Micro Interface HMI to HTML web standards. The 1997 change discontinued text based access to the forums, but the forums were accessible both through the web as alive as through CompuServe's proprietary HMI protocol. In 2004 CompuServe discontinued HMI and converted the forums to web access only. The forums remained active on CompuServe.com until the end of 2017.
CompuServe made a number of acquisitions in its history, both before and after being acquired by H&R Block:
Compuserve had a special military section to help veterans and military brats, both members and non-members of the 1994-founded Military Brats of America MBA to connect. Later on, MBA established a bulletin board within the Vietnam Veterans of America's AOL portal.