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Dow Jones is reporting that New York investment firm Welsh, Carson, Anderson & Stowe is in separate talks to acquire Compuserve. But Block "is said to have rejected the firm's offer because it required" they keep a minority stake in Compuserve.

The article portrays CompuServe's European subscriber base and Network Services as the two areas "that have piqued AOL's interest." This would add to AOL's Eurpean membership and to ANS' corporate customers which DJ says "could also help AOL's image among businesses, which has been tainted by AOL's outage last year and the lack of sufficient capacity earlier this year."

As for CompuServe's domestic consumer service, "Any acquirer would have to invest heavily to upgrade CompuServe's network to include the latest Internet technologies and to boost marketing. For AOL, it may be cheaper to close the operation and hope to catch the majority of the subscriber diaspora."

Block won't separate the consumer service from the rest. But "Case wants to do this," said one executive familiar with the talks.

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