18

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                             _____________________

                                   FORM 10-Q


(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934
          for the quarterly period ended January 31, 1997

[  ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
           OF THE SECURITIES EXCHANGE ACT OF 1934
           for the transition period from __________ to ___________

                        Commission file number 2-53193
                                       
                            COMPUSERVE CORPORATION
            (Exact name of registrant as specified in its charter)
                                       

              Delaware                             31-1459598
    (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)            Identification No.)


                        5000 Arlington Centre Boulevard
                             Columbus, Ohio  43220
         (Address of principal executive offices, including zip code)


                                (614) 457-8600
             (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X    No  __

     As of March 13, 1996, the Registrant had outstanding 92,600,000 shares of
common stock.






                               TABLE OF CONTENTS





                                                                 Page
                                                                ------
PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements.

     Consolidated Balance Sheets
          January 31, 1997 (Unaudited)
          and April 30, 1996 (Audited)........................     3

     Consolidated Statements of Operations
          Three Months Ended January 31,
          1997 and 1996 (Unaudited)...........................     4

          Nine Months Ended January 31, 1997
          and 1996 (Unaudited)................................     5

     Consolidated Statements of Cash Flows
          Nine Months Ended January 31, 1997
          and 1996 (Unaudited)................................     6

     Notes to Consolidated Financial Statements Unaudited)....     7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations.................     9



PART II - OTHER INFORMATION...................................    14


SIGNATURES....................................................    15


                         COMPUSERVE CORPORATION
                       CONSOLIDATED BALANCE SHEETS
                         (AMOUNTS IN THOUSANDS)
                                                               
                                                January 31,    April 30,
                                                    1997          1996
                                                -----------   -----------
                                                (Unaudited)    (Audited)
CURRENT ASSETS                                                 
  Cash and cash equivalents                       $115,711     $280,646
  Investments                                       60,384       29,345
  Receivables, net                                 102,128      119,186
  Due from parent                                   74,255       17,377
  Other current assets                              36,748       39,336
                                                -----------   -----------
     TOTAL CURRENT ASSETS                          389,226      485,890
                                                               
INTANGIBLE ASSETS, net                              14,626       22,809
                                                               
PROPERTY AND EQUIPMENT, net                        366,573      348,059
                                                               
OTHER ASSETS                                                   
  Deferred subscriber acquisition costs, net        46,127       96,636
  Other assets                                      14,721       12,434
                                                -----------   -----------
     TOTAL OTHER ASSETS                             60,848      109,070
                                                -----------   -----------
     TOTAL ASSETS                                 $831,273     $965,828
                                                ===========   ===========     
CURRENT LIABILITIES                                            
  Accounts payable                                 $51,730      $89,236
  Other current liabilities                         54,783       41,016
  Accrued taxes                                      6,592        4,070
  Deferred revenues                                  5,827        4,077
                                                -----------   -----------
     TOTAL CURRENT LIABILITIES                     118,932      138,399
                                                               
DEFERRED INCOME TAXES                               42,814       56,763
                                                               
STOCKHOLDERS' EQUITY                               669,527      770,666
                                                -----------   -----------     
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $831,273      $965,828
                                                ===========   ===========      
                                                               
                                                               
             SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                         COMPUSERVE CORPORATION
                  CONSOLIDATED STATEMENTS OF OPERATIONS
   (UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                                              
                                               3 Months Ended January 31,
                                               --------------------------
                                                  1997           1996
                                               -----------   ------------      
REVENUES                                                      
  Interactive Services revenues                  $138,506     $141,482
  Network Services revenues                        65,239       51,198
  Other revenues                                    7,230       10,352
                                               -----------   ------------
         TOTAL REVENUES                           210,975      203,032
                                                              
COSTS AND EXPENSES                                            
  Costs of revenues                               135,829      105,410
  Marketing                                        47,310       46,373
  General and administrative                       12,402        7,774
  Depreciation and amortization                    29,363       19,228
  Equipment leasing                                 1,872         ---
  Product development                               8,211        7,000
                                               -----------   ------------
             TOTAL COSTS AND EXPENSES             234,987      185,785
                                                              
OPERATING EARNINGS/(LOSS)                         (24,012)      17,247
                                                              
NET INTEREST INCOME/(EXPENSE)                       2,345       (2,284)
                                               -----------   ------------      
EARNINGS/(LOSS) BEFORE TAXES                      (21,667)      14,963
                                                              
INCOME TAX EXPENSE/(BENEFIT)                       (7,434)       5,565
                                               -----------   ------------    
NET EARNINGS/(LOSS)                              ($14,233)      $9,398
                                               ===========   ============     
EARNINGS/(LOSS) PER COMMON SHARE                   ($0.15)       $0.13
                                               ===========   ============    
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING      92,600,000    74,200,000
                                               ===========   ============     
                                                              
                                                              
             SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                          COMPUSERVE CORPORATION
                  CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                                               
                                               9 Months Ended January 31,
                                               -------------------------- 
                                                   1997           1996
                                               ------------    -----------     
                                                               
REVENUES                                                       
  Interactive Services revenues                   $424,013      $408,599
  Network Services revenues                        188,124       143,911
  Other revenues                                    21,823        25,445
                                               ------------    -----------
         TOTAL REVENUES                            633,960       577,955
                                                               
COSTS AND EXPENSES                                             
  Costs of revenues                                421,710       278,675
  Marketing                                        217,264       110,966
  General and administrative                        33,176        29,152
  Depreciation and amortization                     84,080        51,085
  Equipment leasing                                  1,872         ---
  Product development                               20,003        21,490
     Nonrecurring items                             25,563         ---
                                               ------------    -----------
             TOTAL COSTS AND EXPENSES              803,668       491,368
                                                               
OPERATING EARNINGS/(LOSS)                         (169,708)       86,587
                                                               
NET INTEREST INCOME/(EXPENSE)                        7,856        (2,284)
                                               ------------    -----------      
EARNINGS/(LOSS) BEFORE TAXES                      (161,852)       84,303
                                                               
INCOME TAX EXPENSE/(BENEFIT)                       (59,969)       34,104
                                               ------------    -----------     
NET EARNINGS/(LOSS)                              ($101,883)      $50,199
                                               ============    ===========     
EARNINGS/(LOSS) PER COMMON SHARE                    ($1.10)        $0.68
                                               ============    ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING      92,600,000     74,200,000
                                               ============    ===========
                                                               
                                                               
              SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                         COMPUSERVE CORPORATION
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                    (UNAUDITED, AMOUNTS IN THOUSANDS)
                                                 
                                                 9 Months Ended January 31,
                                                 -------------------------
                                                    1997          1996
                                                 ----------   ------------   
                                                               
CASH FLOWS FROM OPERATING ACTIVITIES                           
  Net Earnings/(Loss)                            ($101,883)     $50,199
  Depreciation and amortization                     84,080       51,085
  Deferred subscriber acquisition costs            (53,767)     (74,876)
  Amortization of deferred subscriber              104,276        9,267
  acquisition costs
  Provision for deferred taxes                     (11,151)      34,260
  Changes in net working capital                   (59,497)     (11,783)
                                                 ----------   -----------
     Net cash provided/(used) by                   (37,942)      58,152
        operating activities
                                                               
CASH FLOWS FROM INVESTING ACTIVITIES                           
  Purchases of property and equipment              (96,764)    (155,867)
  Purchases of short-term investments             (137,074)         
  Maturities of short-term investments             106,035          
  Other, net                                           810      (17,651)
                                                 ----------   -----------
     Net cash used by investing activities        (126,993)    (173,518)
                                                               
CASH FLOWS FROM FINANCING ACTIVITIES                           
  Advances from parent                                   0      118,056
                                                 ----------   -----------
     Net cash provided by financing activities           0      118,056
                                                 ----------   -----------
NET INCREASE/(DECREASE) IN CASH AND                            
     CASH EQUIVALENTS                             (164,935)       2,690
                                                                    
CASH AND CASH EQUIVALENTS AT BEGINNING          
     OF PERIOD                                     280,646        4,913
                                                 ----------   -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD        $115,711       $7,603
                                                 ==========   ===========     
                                                               
                                                               
             SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            CompuServe Corporation
                  Notes to Consolidated Financial Statements
             (Unaudited, amounts in thousands, except share data)
                                       
                                       

1.   The Consolidated Balance Sheet as of January 31, 1997, the Consolidated
     Statements of Operations for the three  month periods ended January 31,
     1997 and 1996, the Consolidated Statements of Operations for the nine
     month periods ended January 31, 1997 and 1996 and the Consolidated
     Statements of Cash Flows for the nine month periods ended January 31, 1997
     and 1996  have been prepared by the Company, without audit.  In the
     opinion of management, all adjustments (which include only normal
     recurring adjustments) necessary to present fairly the financial position,
     results of operations and cash flows at January 31, 1997 and for all
     periods presented have been made.

     Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted.  These consolidated
     financial statements should be read in conjunction with the financial
     statements and notes thereto in the Company's April 30, 1996 Form 10-K,
     and are not necessarily indicative of the operating results for the full
     fiscal year.

2.   CompuServe Corporation ("Company") is a majority-owned  (80.1%) subsidiary
     of H&R Block Group, Inc. ("Parent").  Parent is a wholly-owned subsidiary
     of H&R Block, Inc. ("Block").

     On July 16, 1996, Block announced that its Board of Directors had approved
     plans to spin-off (the "Spin-off") Block's 80.1% interest in the Company.
     The Spin-off was subject to, among other things, shareholder approval at
     Block's September 1996 annual meeting and a favorable ruling from the
     Internal Revenue Service as to the tax-free nature of the transaction.

     On August 28, 1996, Block announced that its Board of Directors decided
     not to present the proposed Spin-off to shareholders at the Block
     September 11, 1996 annual meeting.  The decision not to present the
     CompuServe Spin-off for a shareholder vote on September 11 was based, in
     part, on the Company's reported first quarter and projected second quarter
     losses, market uncertainties regarding the online industry and the planned
     September introduction of new interfaces for the CompuServe Interactive
     Service ("CSi").

3.   In the first quarter of fiscal 1997, the Company incurred a nonrecurring
     pretax charge of $17.7 million ($12.5 million after tax) relating to the
     potential sale or other disposition of certain assets and business
     operations of the corporate computer software group of SPRY, Inc. ("SPRY",
     a wholly-owned subsidiary of the Company); the consolidation of U.S.-based
     staff functions and office facilities; the renegotiation of certain third-
     party customer service agreements; and the write-off of certain obsolete
     software costs for billing and customer service systems.  Of the total
     charge, $9.8 million requires the outlay of cash; the remaining $7.9
     million involves no commitment of funds.

     In the second quarter of fiscal 1997, the Company also incurred a
     nonrecurring pretax charge of $7.9 million ($4.9 million after tax)
     relating to the withdrawal of the family-oriented WOW! online service.  Of
     the total charge, $5.6 million requires the outlay of cash; the remaining
     $2.3 million involves no commitment of funds.

     The revenues of the corporate computer software group of SPRY and the
     withdrawn WOW! service are not material to the consolidated revenues of
     the Company.

4.   The Company files consolidated federal income tax returns with Block on a
     calendar year basis.  The Consolidated Statements of Operations reflect
     the effective tax rates expected to be applicable for the respective full
     fiscal years, including the effect of non-deductible items related to the
     items in Note 3.

5.   In October 1996, the Company changed its rate of amortization of deferred
     subscriber acquisition costs to more closely correlate with the recent
     trends in subscriber retention rates and member net revenues.  The new
     rate of amortization is 50% in the first 3 months, 30% in the next 9
     months, and 20% in the subsequent year, compared to the previous policy of
     60% in the first 12 months and 40% in the subsequent year.  In conjunction
     with this change in amortization rates, the Company accelerated
     amortization of previously deferred CSi subscriber acquisition costs with
     a writedown totaling $34.5 million as of October 31, 1996.  Additionally,
     all previously deferred subscriber acquisition costs totaling $8.3 million
     for WOW! and $2.5 million for SPRYNET were also written off, reflecting
     the high costs to service these high usage, flat-priced services.  WOW!
     was withdrawn from service effective January 31, 1997; subsequent to
     October 31, 1996, all subscriber acquisition costs for SPRYNET are
     expensed as incurred.  The total $45.3 million adjustment of deferred
     subscriber acquisition costs ($28.6 million after taxes) for the quarter
     ended October 31, 1996 is included in marketing expenses.

6.   In June 1996, a purported shareholder class action complaint was filed
     against the Company and Block in the Court of Common Pleas, Franklin
     County, Ohio, entitled Greenfield v. CompuServe Corporation, et al.   A
     second purported shareholder class action suit was filed in July 1996
     against the Company and Block, in federal district court for the Southern
     District of Ohio, entitled Romine v. CompuServe Corporation et al.   A
     third purported shareholder class action suit was filed against the
     Company, Block, and the lead underwriters in the Company's April 1996
     initial public offering ("IPO"), in federal district court for the
     District of Minnesota, entitled Acker v. CompuServe Corporation, et al,
     but the plaintiffs have since voluntarily dismissed this suit and plan to
     join the plaintiffs in the Romine suit.   These complaints also named
     certain officers and directors of the Company at the time of the Company's
     IPO as additional defendants.  Each suit alleges similar violations of the
     Securities Act of 1933 based on assertions of omissions and misstatements
     of fact in connection with the Company's public filings related to the
     IPO.  The Greenfield suit also alleges similar violations of  the Ohio
     Securities Code and common law of negligent misrepresentation.  Relief
     sought is unspecified but includes pleas for rescission and damages.  In
     August 1996, an action for discovery was filed solely against the Company
     on behalf of a shareholder in the Court of Common Pleas, Franklin County,
     Ohio, entitled Schnipper v. CompuServe Corporation, seeking factual
     support for a possible fourth claim relating to disclosures in connection
     with the IPO.  The Company intends to vigorously defend these suits.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FINANCIAL CONDITION

The following discussion should be read in conjunction with the Consolidated
Balance Sheets and Consolidated Statements of Cash Flows appearing elsewhere
herein.

CompuServe obtains cash to fund its working capital and capital requirements
from, among other things, available cash, cash equivalents and investments, and
operating activities.

At January 31, 1997, the Company had cash, cash equivalents and investments
totaling $176.1 million, a decrease of $133.9 million from April 30, 1996.  Net
cash used by operating activities during the nine month period totaled $37.9
million and net cash used by investing activities totaled $127.0 million
(including $31.0 million of net purchases of short-term investments and  $96.8
million of purchases of property and equipment).

Investments consist principally of commercial paper, corporate bonds and U.S.
government agency obligations that have maturities of three to twelve months at
date of purchase.  At January 31, 1997, the investment portfolio had an average
81 days term to maturity.

Working capital decreased to $270.3 million at January 31, 1997 from $347.5
million at April 30, 1996, due primarily to the purchase of $96.8 million of
property and equipment.  The working capital ratio at January 31, 1997 was 3.27
to 1, compared to 3.51 to 1 at April 30, 1996.

The Company has no long-term debt.  The Company agreed to an unsecured $25
million revolving credit facility with Bank One, Columbus, NA, in June 1996.
Borrowings under the credit facility will bear interest at a floating rate
equal to either the bank's prime rate or 0.25% over LIBOR.  The Company is
required to pay an unused commitment fee of 0.08% per annum for this facility.
Borrowings under the credit facility may be used for general corporate
purposes.  The facility expires in June 1997, subject to renewal.  There have
been no borrowings during the year.

A portion of the Company's operations are conducted in leased facilities.
Also, during the second quarter of fiscal 1997, the Company initiated an
equipment leasing program.  Through January 31, 1997, equipment with an
equivalent cash purchase price of $26.8 million was leased.

The Company believes that its cash, cash equivalents and investments, including
remaining net proceeds from the IPO in April 1996, cash from operating
activities and currently available credit facility will be sufficient to meet
the Company's presently anticipated funding requirements for at least another
twelve months.  However, there can be no assurance that the Company's funding
requirements will not increase significantly as a result of unforeseen
circumstances or that the Company's cash used by operating activities will not
increase.  If the Company is required to seek third-party sources of financing
to meet its short-term or long-term funding needs, there can be no assurance,
in light of the Company's recent losses, that the Company would be able to
obtain public or private third-party sources of financing or, if obtained, that
favorable terms for such financing would be obtained.  In addition, given the
trading history of the Company's common stock since the IPO and recent
uncertainty in the markets regarding the online industry, there can be no
assurance that the Company would be able to raise additional cash through
public or private offerings of its common stock.

The statement set forth in the first sentence of the preceding paragraph is a
forward looking statement that is subject to risks and uncertainties which
could result in the Company's inability to meet its funding requirements for
the time period indicated.   Such risk and uncertainties include the risk that
the Company's new interface for CSi will not be widely accepted by its
membership, that its new strategy and related marketing programs will not
produce the anticipated results or that subscriber attrition and growth will
not be materially impacted by the new CSi  interface and marketing efforts.

At January 31, 1997, the Company is owed $74.3 million by Parent, due primarily
for income tax benefits resulting from the Company's pretax losses for the
thirteen months ended January 31, 1997.  The Company is part of the calendar
year consolidated U.S. tax filings of the Parent.

On August 1, 1995, the Company announced a series of investment initiatives
designed to enhance long-term competitiveness, take advantage of accelerating
growth opportunities and enhance market share for its online services.  They
included: the launch of WOW!; a simplified and less expensive pricing
structure; a new CSi interface; increased expenditures for marketing and
infrastructure expansion; and the expansion of Internet access through CSi,
WOW! and SPRYNET.  These initiatives, which have been underway since early fall
of 1995, were expected to reduce profitability over a twelve to eighteen-month
period.  The expenses associated with these initiatives were partially offset
in fiscal 1996 by a one-time benefit  from a change in accounting for direct
response advertising costs.

In the quarter ended July 31, 1996, the Company incurred a nonrecurring pretax
charge of $17.7 million ($12.5 million after tax), relating to the potential
sale or other disposition of certain assets and business operations of the
corporate computer software group of SPRY; the consolidation of U.S.-based
staff functions and office facilities; the renegotiation of certain third-party
customer service agreements; and the write-off of certain obsolete software
costs for billing and customer service systems.  Of the total charge, $9.8
million requires the outlay of cash; the remaining $7.9 million involves no
commitment of funds.  The revenues of the corporate computer software group of
SPRY are not material to the consolidated revenues of the Company.

On November 21, 1996, the Company announced a shift in its marketing emphasis
to build on its leadership in the small-business professional and technical
market sectors, and focus on profitable segments in the consumer markets.  As
part of this shift, the Company withdrew its family-oriented WOW! online
service effective January 31, 1997, resulting in a one-time pretax charge in
the second quarter of  fiscal 1997 of $7.9 million ($4.9 million after tax).

RESULTS OF OPERATIONS

The analysis that follows should be read in conjunction with the Consolidated
Statements of Operations.

In September 1995, the Company began to collect and track subscriber retention
data based upon the month a subscriber signed up.  With over 12 months of data,
this now provides the most accurate means for measuring subscriber retention.
Retention statistics were previously aggregated and calculated in quarterly
pools.

For the quarter ended January 31, 1997, the Company had retained, on average,
54% of new CSi subscribers after 3 months, 43% after 6 months, 37% after 9
months and 31% after 12 months on the service.  In the immediately preceding
quarter, the Company had retained, on average, 55% of new CSi subscribers after
3 months, 44% after 6 months, 36% after 9 months and 36% after 12 months of
service.   Since April 30, 1996, the Company has seen a small but steady
decline in CSi membership.

Based on the availability of this new data in the second quarter of this fiscal
year, the rate of amortization was accelerated to more closely correlate with
the trends in subscriber retention rates and lower per member net revenues.
Accordingly, the Company accelerated amortization of previously deferred CSi
subscriber acquisition costs with a writedown totaling $34.5 million pretax as
of October 31, 1996.  CSi deferred subscriber acquisition costs are now
amortized at 50% in the first 3 months, 30% in the next 9 months, and 20% in
the subsequent year, compared to the previous policy of 60% in the first 12
months and 40% in the subsequent year.  All previously deferred subscriber
acquisition costs totaling $8.3 million for WOW! and $2.5 million for SPRYNET
were also written off, reflecting the high costs to service these high usage,
flat-priced services.  The total $45.3 million adjustment of deferred
subscriber acquisition costs ($28.6 million after taxes) is included in
marketing expenses for the quarter ended October 31, 1996.

There can be no assurance that the Company's subscriber retention rates or
member net revenues will not decline below these levels.

The Company expects that average revenue per member in fiscal 1997 will be
below the levels of fiscal 1996.  This is attributable in part to the full-year
effect of a new pricing structure introduced by the Company in September 1995.
The new pricing structure was intended to attract more customers and encourage
more online usage.  Although the new pricing structure has reduced average
revenue per member, it has contributed to increased member acquisitions and
usage which management believes will support long-term customer loyalty.  The
decline in revenue per member also impacts the comparability of expenses as a
percentage of revenue in the following quarterly analyses.


Three Months Ended January 31, 1997 Compared to Three Months Ended January 31,
1996.

Interactive Services Revenues.  Interactive Services revenues decreased 2.1% to
$138.5 million from $141.5 million reported in the third quarter of fiscal
1996.  The decrease in revenues was primarily the result of a relatively flat
membership base coupled with a decline in usage.  At January 31, 1997 the
Company had 3.2 million direct subscribers worldwide, and a total of 5.3
million subscribers including NiftyServe subscribers, a distinct online service
owned and managed by the Company's Japanese licensee.

The average number of  CSi subscribers during the three month period ended
January 31, 1997, exclusive of Nifty Serve subscribers, was 2.9 million;
consistent with that of the prior year.  The average monthly CSi total revenue
per subscriber (including fees, usage, product sales, online advertising, mall,
magazine and CD-ROM revenues) decreased to $15.22 for the quarter from $16.88
for the third quarter of  fiscal 1996 due primarily to decreased usage by the
membership base.   The average monthly CSi revenue, from fees and usage only,
decreased to $15.04 for the quarter from $16.11 for the third quarter of
fiscal 1996.

Interactive Services Revenue also includes the fees associated with SPRYNET,
the Company's Internet access provider launched in the second half of the prior
fiscal year.  Subscribers for SPRYNET grew to 270,000 at January 31, 1997, up
from 132,000 at April 30, 1996 and 218,000 at the immediately preceding quarter
end.

Network Services Revenues,  Network Services revenues increased 27.4% to $65.2
million from $51.2 million in 1996, while the number of customers increased 24%
to 1,151.  The increase in revenue was due to the increase in the number of
network customers and higher usage by existing customers.

Other Revenues.  Other revenues decreased 30.2% to $7.2 million from $10.4
million. The decrease is due primarily to decreased utilization in the current
year by the Company's commercial timeshare customers combined with a one-time
$2.4 million gain on the sale of a minority-interest investment in December
1995, offset by an increase of $1.0 million in corporate remote computing
services and fees from H&R Block Tax Services, Inc. for electronic tax filing
support.

Costs of Revenues.  Costs of revenues consist primarily of data communication
costs, royalties paid to information and service providers, salaries and other
costs associated with providing customer support and operating the data centers
and related property and other direct costs.  Costs of revenues increased as a
percent of total revenues to 64.4% from 51.9% in 1996.  The 12.5 percentage
point increase is due primarily to increased network hours and associated costs
(6.0 percentage points), effect of lower revenue per member during the third
quarter of fiscal 1997 (4.0 percentage points), the write-off of obsolete
equipment (1.8 percentage points), and increased outsourced customer service
costs (1.1 percentage points).

Marketing.  Marketing expenses include costs incurred to acquire and retain
subscribers, other marketing expenses and the Network Services sales
organization.  Effective May 1, 1995, acquisition costs for online subscribers
were deferred and charged to operations over 24 months beginning the month
after such costs were incurred, with 60% amortized in the first twelve months.
Effective February 1, 1996, the Company further changed the method for
accounting for these costs, which did not have a material impact on these
expenses.  Effective in the second quarter of fiscal 1997, deferred acquisition
costs for online subscribers were charged to operations over 24 months, with
50% amortized in the first three months, 30% in the next 9 months and 20% in
the subsequent year, as discussed above.

Marketing expenses as a percent of total revenues decreased slightly in fiscal
1997 to 22.4% (20.5% before deferral and nonrecurring adjustment for the
acceleration of amortization of subscriber acquisition costs) compared to last
year's 22.8% (42.3% before deferral of subscriber acquisition costs).  The
decrease in marketing expenses is attributable to a decline in the level of
advertising in anticipation of the Company's new strategic initiative offset by
the amortization of previously deferred advertising costs.

General and Administrative.  As a percent of total revenues, general and
administrative expenses increased to 5.9% in 1997 from 3.8% in 1996.  The
increase of 2.1 percentage points is primarily due to the reversal of legal
accruals in the prior year upon the favorable outcome of certain lawsuits.

Depreciation and Amortization.  Depreciation and amortization as a percent of
total revenues increased to 13.9% in 1997 from 9.5% in 1996.  The increase was
due primarily to the increased capital expenditures to double network capacity
to support the Company's rapid growth during the past year.

Equipment Leasing.  During the second quarter of fiscal year 1997, the Company
initiated an equipment leasing program.  As of January 31, 1997, the Company
had leased equipment with an equivalent cash purchase price of $26.8 million.

Product Development.  Product development costs increased slightly over last
year to 3.9% of revenues for 1997 from 3.4% in 1996.  The increase is due
primarily to the cost to modify existing software in the current period versus
the creation of new software in the prior period.  The cost of new software is
capitalized and subsequently amortized over the estimated economic life of the
product.

Income Taxes.  The effective tax rate decreased to 34.3% for the third quarter
of fiscal 1997 from 37.2% for fiscal 1996 primarily as a result of certain
expenses that are not fully deductible for tax purposes.


Nine Months Ended January 31, 1997 Compared to Nine Months Ended January 31,
1996.

Interactive Services Revenues.  Interactive Services revenues increased 3.8% to
$424.0 million from $408.6 million reported for the nine months of fiscal 1996.
The increase in revenues was primarily the result of an increase in the
Company's subscriber base.  The average number of CSi subscribers, exclusive of
NiftyServe subscribers, during the nine month period ended January 31, 1997 was
3.0 million, compared with 2.6 million for the similar period of fiscal year
1996.

The average monthly CSi total revenue per subscriber (including fees, usage,
product sales, online advertising, mall, magazine and CD-ROM revenues)
decreased to $14.92 for the nine month period ended January 31, 1997 from
$17.76 for fiscal 1996 due primarily to a new pricing structure implemented in
September 1995, the full effect of which was not yet recognized in the prior
year.   The average monthly CSi revenue, from fees and usage only, decreased to
$14.67 for the current nine month period from $17.16 for the nine months ended
January 31, 1996.

Network Services Revenues.  Network Services revenues increased 30.7% to $188.1
million from $143.9 million in 1996.  The increase in revenue was due to the
increase in the number of network customers and higher usage by existing
customers.

Other Revenues.  Other revenues decreased 14.2% to $21.8 million from $25.4
million for fiscal 1996.  The decrease is due primarily to decreased
utilization by the Company's commercial timeshare customers combined with a one-
time $2.4 million gain on the sale of a minority-interest investment in
December 1995, offset by an increase in corporate remote computing services and
fees from H&R Block Tax Services, Inc. for electronic tax filing support.

Costs of Revenues.  Costs of revenues consist primarily of data communication
costs, royalties paid to information and service providers, salaries and other
costs associated with providing customer support and operating the data centers
and property and other direct costs.  Costs of revenues increased as a percent
of total revenues to 66.5% from 48.2% in 1996.  The 18.3 percentage point
increase is due primarily to the affect of the prior year pricing change (7.0
percentage points),  increased network hours and associated costs (6.3
percentage points), and increased outsourced customer service costs (4.1
percentage points).

Marketing.  Marketing expenses as a percent of total revenues increased in
fiscal 1997 to 34.3% (26.3% before deferral of subscriber acquisition costs)
compared to last year's 19.2% (30.6% before deferral and nonrecurring
adjustment for acceleration of the amortization of subscriber acquisition
costs).  The increase in marketing expenses is primarily attributable to the
amortization of previously deferred subscriber acquisition costs coupled with
the acceleration in the amortization rate of such CSi costs and the write-off
of previously deferred subscriber acquisition costs related to the SPRYNET and
WOW! services which occurred in the second quarter of 1997.  The acceleration
of amortization and write-off increased marketing expenses by $45.3 million
(7.2% of total revenues).

General and Administrative.  As a percent of total revenues, general and
administrative expenses increased slightly to 5.2% in 1997 from 5.0% in 1996
due primarily to the reversal of legal accruals in the prior year upon the
favorable outcome of certain lawsuits offset by the Company's cost containment
measures and favorable outcome of certain sales tax audits.

Depreciation and Amortization.  Depreciation and amortization as a percent of
total revenues increased to 13.3% in 1997 from 8.8% in 1996.  The increase was
due primarily to the increased capital expenditures to double network capacity
to support the Company's rapid growth during the past year.

Equipment Leasing.   During the second quarter of fiscal year 1997, the Company
initiated an equipment leasing program.  As of January 31, 1997, the Company
had leased equipment with an equivalent cash purchase price of $26.8 million.

Product Development.  Product development costs decreased slightly over last
year to 3.2% of revenues for 1997 from 3.7% in 1996. The decrease is primarily
due to the capitalization of qualified research and development costs and the
timing of product development projects.

Nonrecurring Items.  In the first quarter of fiscal 1997, the Company incurred
a pretax charge of $17.7 million ($12.5 million after tax) relating to the
potential sale or other disposition of certain assets and business operations
of the corporate computer software group of SPRY; the consolidation of U.S.-
based staff functions and office facilities; the renegotiation of certain third-
party customer service agreements; and the write-off of certain obsolete
software costs for billing and customer service systems.  Of the total charge,
$9.8 million requires the outlay of cash; the remaining $7.9 million involves
no commitment of funds.

In the second quarter of fiscal 1997, the Company incurred a nonrecurring
pretax charge of $7.9 million ($4.9 million after tax) relating to the
withdrawal of the family-oriented WOW! online service.  Of the total charge,
$5.6 million requires the outlay of cash; the remaining $2.3 million involves
no commitment of funds.

The revenues of the corporate computer software group of SPRY and the withdrawn
WOW! service are not material to the consolidated revenues of the Company.

Income Taxes.  The effective tax rate decreased to 37.1% for the nine months of
fiscal 1997 from 40.5% for fiscal 1996 as a result of certain expenses that are
not fully deductible for tax purposes.

                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

     In June 1996, a purported shareholder class action complaint was filed
     against the Company and Block in the Court of Common Pleas, Franklin
     County, Ohio, entitled Greenfield v. CompuServe Corporation, et al.   A
     second purported shareholder class action suit was filed in July 1996
     against the Company and Block, in federal district court for the Southern
     District of Ohio, entitled Romine v. CompuServe Corporation et al.   A
     third purported shareholder class action suit was filed against the
     Company, Block, and the lead underwriters in the Company's April 1996 IPO,
     in federal district court for the District of Minnesota, entitled Acker v.
     CompuServe Corporation, et al, but the plaintiffs have since voluntarily
     dismissed this suit and plan to join the plaintiffs in the Romine suit.
     These complaints also named certain officers and directors of the Company
     at the time of the Company's IPO as additional defendants.  Each suit
     alleges similar violations of the Securities Act of 1933 based on
     assertions of omissions and misstatements of fact in connection with the
     Company's public filings related to the IPO.  The Greenfield suit also
     alleges similar violations of  the Ohio Securities Code and common law of
     negligent misrepresentation.  Relief sought is unspecified but includes
     pleas for rescission and damages.  In August 1996, an action for discovery
     was filed solely against the Company on behalf of a shareholder in the
     Court of Common Pleas, Franklin County, Ohio, entitled Schnipper v.
     CompuServe Corporation, seeking factual support for a possible fourth
     claim relating to disclosures in connection with the IPO.  The Company
     intends to vigorously defend these suits.


Item 5.  Other Information

     In February 1997,  Robert J Massey resigned as the Company's President and
     Chief Executive Officer (CEO).  The Company has initiated a search for a
     replacement for Mr. Massey.  During the intervening period, Frank L.
     Salizzoni, the Company's chairman, will assume the responsibilities as
     acting CEO.  Mr.  Salizzoni also serves as President and Chief Executive
     Officer of Block.


Item 6.  Exhibits and Reports on Form 8-K

     (a)  (27)   Financial Data Schedule.

     (b)  None

                                  SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                              COMPUSERVE CORPORATION



Date  March 13, 1997             By:/s/ Lawrence A. Gyenes
                                    Lawrence A. Gyenes
                                    Executive Vice President
                                    and Chief Financial Officer