Ex-MTV Exec to Take Prodigy CEO Position : Technology: Edward Bennett says he plans to orient the on-line service toward a younger, hipper audience.

Prodigy Services Co., plagued by a reputation as the stodgiest of the big on-line computer services, is replacing Chief Executive Ross Glatzer with former MTV executive Edward Bennett, who plans to orient the service toward a younger, hipper audience.

Like its rivals in the fast-changing on-line world, Prodigy is scrambling for position at a time when many customers and information providers are turning to the Internet--and as all anticipate the imminent arrival of a new service from Microsoft Corp. On-line services offer a variety of information and entertainment services, electronic mail and discussion “forums,” all accessible to personal computer users through telephone lines.

Analysts say 11-year-old Prodigy has finally begun to make money after many years of losses, but the company has been hit by the recent departure of its well-regarded No. 2 executive, Scott Kurnit, and a string of defections by key members of its technical staff.

The 48-year-old Glatzer’s departure, described as a retirement, could signal plans by the firm’s joint owners, International Business Machines Corp. and Sears, Roebuck & Co., to restructure the service. IBM has reportedly been chafing at the joint management arrangement, which has prevented the computer giant from integrating Prodigy with its other offerings. But analysts said Sears is unlikely to sell its stake in the company at this stage.

Bennett, a former chief executive of MTV Networks’ VH1 music channel, was most recently developing programming ventures with producer Norman Lear.

Mary Modahl, an analyst at Forrester Research in Cambridge, Mass., said someone of Bennett’s background is just what Prodigy needs: “They’re getting some pizazz. That’s good. They could use it.”

Prodigy, the first major on-line service aimed at consumers, has slipped behind entrepreneurial America Online Inc. and H&R; Block Inc.’s CompuServe unit and is now the nation’s third-largest on-line service. But in recent months it has begun to show some signs of turning around.

Last summer Prodigy introduced the addictive “chat” function that has been so successful in drawing subscribers to AOL. And the White Plains, N.Y.-based firm was the first to connect its members with the Internet’s World Wide Web earlier this year, a move that has driven its subscription base past 1.5 million.

At a time when many providers of news and entertainment have chosen the Internet over the commercial services as the best business model for their on-line incarnations, embracing the global computer network was seen as a forward-looking move for Prodigy.

On-line services as an industry grew 56% last year and had revenues of almost $800 million. By the end of the year, analysts estimate, about 7 million U.S. households will be subscribing to at least one commercial service.

But the launch of Microsoft’s on-line service later this year will probably change the balance of power in the industry. And some analysts say the Internet--owned by no one and open to all--will triumph in the end.

Prodigy, which carries the Los Angeles Times’ TimesLink service, plans to deal with the increasingly competitive environment by developing a new interface and further integrating the service with the Internet.

“They’ve been moving away from a closed, proprietary system toward a more open standard, and that’s benefiting them tremendously,” said Mike Renzil, an analyst at Jupiter Communications in New York. “But over time they’re going to really need someone who understands entertainment and has the connections to establish more alliances.”

That, presumably, is where Bennett comes in. His plans for Prodigy include developing areas for younger people, such as music and fashion.

“I’d like to skew the service younger so we make more connections with a younger audience, to focus on women and kids and provide them with better content,” Bennett said. “I’ve been in the TV business for 15 years, and I’ve been involved in developing and marketing analog content on the screen. It’s fascinating, and it’s not something one walks away from without a great deal of thought. But I think this is the future.”