CompuServe’s CEO Quits Troubled Firm
Robert J. Massey logged off Monday as top executive of CompuServe Corp., the money-losing computer online service.
Massey, president and chief executive since June 1995, quit to pursue other interests, according to a written statement from CompuServe’s parent, income tax preparation company H&R; Block Inc.
“Our goal remains a speedy and sustained turnaround at CompuServe and under Bob’s leadership, the company has made progress in that direction,” CompuServe Chairman Frank L. Salizzoni said in the statement.
When asked if Massey’s resignation had anything to do with the company’s struggles, company spokesman Steve Conway said: “Not to my knowledge, except the fact that it has been a very tough year this past year. It’s been a long year.”
The nation’s second-largest online service provider with 3.3 million customers has been losing market share to other providers such as America Online.
The company lost $88 million in the six months ended Oct. 31 and shut down its family-oriented WOW service Jan. 31 to concentrate on business customers.
CompuServe is expected to announce financial results for its third fiscal quarter on Thursday.
Those numbers will not be good, said Gary Arlen, president of Arlen Communications in Bethesda, Md., an interactive service research company.
“Massey knows what the numbers will read,” said Arlen, who was not surprised at the resignation. “The [online] industry as a whole has been going gangbusters, but CompuServe has only grown 6%.”
Block sold 20% of CompuServe to the public in a stock offering last year, but has put off plans to spin off the remaining 80% to shareholders because of its troubles. Arlen believes H&R; Block will sell its stake.
“CompuServe has never fit completely into Block’s vision of an online service,” he said. “It was supposed to be a side business for the kind of services Block offers.”
CompuServe spokesman Conway said H&R; Block is still planning to sell the rest of the stock, but no timetable has been set.
Massey, 50, who has been with the company since 1976, was unavailable for comment Monday, Conway said.
But on CompuServe’s Internet site, a smiling Massey admits that 1996 was a trying time for CompuServe shareholders who have watched the company’s stock fall from about $30 a share when it was first traded in April to $10.8125 Friday. With U.S. stock markets closed because of Presidents Day, the stock was not traded Monday.
In the company’s annual report, posted on the site, Massey blamed the stock price declines on mixed perceptions about competition in the industry and confusion over CompuServe’s transition from a closed, proprietary online service to one based on open Internet standards.
Salizzoni, who is also chief executive of Kansas City, Mo.-based H&R; Block, will assume Massey’s duties on an interim basis until a successor is chosen. He will divide his time between CompuServe and H&R; Block.
