Pioneer’s proud past
Now a shadow of its former self, CompuServe once blazed trails online
Decades before Facebook and Google, there was CompuServe.
Once the darling of the computer world — making Columbus, not Silicon Valley, the center of the tech world — CompuServe suffered through a series of takeovers and today lives in the shadows. Little exists of the first major commercial service that gave home-computer users access to cyberspace.
While the brand lives on as an online service for budgetminded customers of AOL — another former high flier that is now owned by Verizon — it is the CompuServe spirit, rather than its reality, that lives on most strongly. How that spirit came to be so enduring is very much part of the CompuServe story.
“When you think about the internet today, there are very few things where you can’t say, ‘Oh, (CompuServe) did that in the ‘80s,’” said Paul Lambert, who joined the company in 1973, when it was based in a converted storefront in Columbus, and retired from it 27 years later.
“Young kids think tech showed up a week-and-ahalf ago,” Lambert said. “But I had my first email address 40 years ago. A big part of it was the kind of culture set by (co-founder and original CEO) Jeff Wilkins and early management.”
Modest beginnings
Wilkins, today the CEO of Facilities Management eXpress, remembers that in 1969 he was in graduate school and his father-inlaw, Harry K. Gard, “needed someone to run this computer service for his insurance company. Well, I had run a business — nine employees installing burglar alarms.”
So Wilkins went to work at the first CompuServe office at 1387 W. 5th Ave.
“I drove into Columbus and walked in,” Wilkins said. “It was an old grocery store. When I walked in, there was nothing inside other than a phone book and a folding chair. I was 25. That was the start.”
The computer service used big mainframe computers during the day. “But at night, they just sat there,” Wilkins said. “So I hired my brotherin-law at $3.50 an hour to figure out if personal computers were going to be a real thing.”
After studying the situation, “I decided to take commercial products and make them available to personal users,” Wilkins said.
CompuServe soon began offering weather forecasts, stock-market quotes, electronic mail and early chat rooms, as well as storage memory.
The personal side of the business began to grow, and in 1980, H&R Block acquired CompuServe for $20 million, giving the computer company cash to expand operations.
“When I negotiated the sale, I also asked for a board seat,” Wilkins said. “I wanted to be able to get a budget to grow. So I went in and asked for $4.5 million and they immediately voted for approval — they didn’t even hear the presentation I had prepared.”
Wilkins and his team used the money to encourage an atmosphere of innovation and casual camaraderie, creating a culture that is today more familiar in Silicon Valley than the Midwest.
“It’s kind of trite to talk about ‘family,’ but in those days it really was,” Lambert said. “I was a young kid from West Virginia and we had a big annual recognition dinner at the Athletic Club — we called it the ‘Compu Prom.’ That was eye popping. There were fantastic trips to Hawaii and to resorts around the country. When things went well, it was celebrated and passed around.”
Innovations
CompuServe innovations included large-scale creditcard authorizations, online research for Wall Street banks and online scheduling for airlines. In 1980 alone, CompuServe introduced real-time chat and the first online newspaper — The Columbus Dispatch — in which news flowed into home computers and users were billed in one-minute increments.
“All sorts of stuff that didn’t exist until, one day, we provided it,” Lambert said. “And then people would say, ‘How did we live without it.’ There was a lot of energy. It was the beginning of a new industry and almost everything we did was pioneering in some way. It was never boring. There was always something going on.”
In the fast-moving world of computers the competition was intense, not only to keep innovating but to get and keep talented employees. And that became the key to CompuServe’s eventual downfall.
“When CompuServe was sold to H&R Block in 1980, I felt it was a great partner to have in the information business,” Wilkins said. “But after about five years, I felt we were starting to fall behind because the stock options were with H&R Block and that wasn’t sexy enough for recruiting. So I suggested we spin off the company — and I was told, ‘In the future, but not now.’”
“I think Henry Block didn’t want to dilute his ownership share,” Lambert said. “But Jeff wanted to be able to retain and recruit talent, way before (Mark) Zuckerberg and those guys.”
Whatever the case, the disagreement led to Wilkins eventually being ousted as chairman of CompuServe. The resultant brain drain made the once-nimble business stumble in its drive to stay one step ahead of advances in technology, Wilkins said.
Beginning of the end
“The big watershed event was when the internet was released from being a government-funded thing to being a piece of public infrastructure,” Lambert said. “The most expensive asset we had — the network — all of sudden that network was ubiquitous and cheap. That was really the beginning of the end.”
CompuServe attempted to deal with the threat of internet rivals by erecting a home page and then by introducing an online service for novice users, dubbed Wow! But after Wow! flopped after only eight months, it was clear that the company had been resting on its laurels for too long.
About six or seven years after Wilkins left CompuServe, he met with the CEO.
“I told him I didn’t like what was happening — this company AOL was much smaller but if you don’t watch these guys, they will eat your lunch,” Wilkins said. “The answer I got back was: ‘We just made $100 million. We don’t worry about them.’ I walked out and knew it was over.”
By 1996, H&R Block had had enough of the computer business and finally decided to spin off CompuServe as a separate publicly traded company. Two years later, CompuServe was split up, with WorldCom (eventually acquired by Verizon) getting the network business and former rival AOL getting the information-services business.
In 2015, in a twist that reunited the network side and online-services side of CompuServe, Verizon bought AOL.
Some of the old CompuServe staff continue to work for the successor company, including Tim Wheeland, who began working for CompuServe in 1985 and continues as director of AOL Paid Services in Verizon’s Hilliard office.
CompuServe today
There about a dozen employees who work on the CompuServe brand today. Their work includes website development and content management, and CompuServe members continue to depend on the service.
“While some members have moved on to other services or access providers, the CompuServe name certainly is and will continue to be recognized,” Wheeland said.
“CompuServe helped lead the way in connecting people across the globe, setting an early example for the digital technology people rely on,” he said. “Today, Oath (the umbrella company owned by Verizon that includes AOL, Yahoo and CompuServe, among others) continues to live that legacy as a digital and mobile company that is committed to bringing users the next generation of iconic experiences.”
With the 50th anniversary of CompuServe two years away, plans are already being formed for a reunion. Judging from a similar reunion held a couple of years ago, when more than 300 people showed up, the 2019 event should be huge.
“We worked together and started out going to happy hours together, then weddings, then the birth of kids, and have been kind of walking through life together,” Lambert said.
Wheeland said CompuServe’s remaining employees plan to be at the 2019 event, too.
“The culture remains,” Wilkins said.
“CompuServe was one of the best incubators of talent ever, and the culture was replicated all over the United States. Culture is everything in companies. Sure, the table stakes are the product, and whether there’s a market for the product. But then it’s the culture. CompuServe and H&R Block worked because when Block bought the company they were smart enough to leave the culture completely alone.”