March 19, 1997 2:45 PM ET
Time sues CompuServe
By Margaret Kane

  Time Magazine filed suit today against CompuServe Inc. for breach of contract and said it plans to seek at least $3.5 million from the Ohio online service.

Magazine officials said CompuServe tried to pull out of a two-year deal to publish its content on the online service because of financial pressures.

Time switched from America Online Inc. to CompuServe in March 1996 after "aggressive efforts by [CompuServe] that promised Time long-term opportunities and the potential to expand the Time brand," the company said in a release.

CompuServe spokeswoman Gail Whitcomb said the company had not yet been served and had no comment.

In the suit, which was filed in U.S. District Court in the Sourthern District of Ohio, Time also asked that the courts require CompuServe to continue to carry the magazine.

"It's a two-year contract, and as of this month, we are starting our second year," said Nancy Kearney, public affairs manager for Time, in New York. "We moved to CompuServe from AOL with the agreement that we'd be building a long-term relationship. Half-way through, they are attempting to renege and we would like to continue on."

CompuServe lost $14.2 million, or 15 cents per share, in the third quarter ended Jan. 31. The company reported that membership for the flagship CompuServe Interactive Service was down slightly to 2.8 million people.

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