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                                                                   EXHIBIT 10.25

                             EMPLOYMENT AGREEMENT
                             --------------------

  EMPLOYMENT AGREEMENT (the "Agreement"), effective as of the 14th day of
September 1998, between Prodigy Communications Corporation, a Delaware
corporation (the "Company"), with its principal place of business at 44 So.
Broadway, White Plains, New York 10601, and Andrea S. Hirsch, residing at 345
East 86th Street, Apt. 8B, New York, NY 10028, (the "Executive").

  WHEREAS, the Company desires to employ the Executive as Executive Vice
President of the Company, and the Executive desires to be employed in that
capacity;

  NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:

1.  Term of Employment.
    ------------------

  The Company hereby agrees to employ the Executive, and the Executive hereby
accepts employment with the Company, upon the terms set forth in this Agreement,
for the period commencing on September 14, 1998 (the "Commencement Date"), and
ending on September 13, 2001 (the "Employment Period"), unless sooner terminated
in accordance with the provisions of Section 4.

2.  Title; Capacity.
    ---------------

  The Executive shall serve as Executive Vice President, Business Development
and General Counsel of the Company.  The Executive shall be based in White
Plains, New York or such other place within the greater New York metropolitan
area as the Board of Directors of the Company (the "Board") shall determine.
The Executive shall report to and be subject to the supervision of, and shall
have such authority as is delegated to Executive by the Chairman and Chief
Executive Officer or such other senior executive that may be designated by the
Chairman.

  The Executive hereby accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position, and such other duties and
responsibilities as the Chairman shall from time to time reasonably assign to
the Executive.  The Executive shall devote Executive's entire business time,
attention and energies to the business and interests of the Company during the
Employment Period.  The Executive shall abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.

3.  Compensation and Benefits.
    -------------------------

    3.1  Salary. The Company shall pay the Executive, in accordance with its
         ------
         normal payroll practices, an annual base salary of $190,000 commencing
         on the Commencement Date. Based on performance, such salary shall be
         subject to increase consistent with existing merit increase guidelines
         in effect February 1999.
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    3.2  Performance Bonuses. Effective January 1, 1999, the Executive shall be
         -------------------
         eligible to participate in an annual bonus plan and receive up to 50%
         of his annual base salary as a performance bonus during each calendar
         year of the Employment Period. During each such year, 50% of such bonus
         shall be contingent upon the successful completion of personal goals as
         mutually agreed between the Executive and the Chairman, and 50% of such
         bonus shall be contingent upon the successful completion of corporate
         goals as determined by the Company. Such performance bonus shall be
         determined and paid, in cash, within 45 days after the end of each such
         calendar year during the Employment Period. Further, the Executive does
         not have to be employed by the Company beyond the last day of the
         applicable year in order to be eligible to receive a bonus payment.

    3.3  Sign-On Bonus. The Company shall pay the Executive a guaranteed sign-on
         -------------
         bonus of $180,000, less applicable withholdings, in two (2)
         installments, with the first payment of $60,000 payable on the
         Executive's hire date and the second payment, in the amount of
         $120,000, payable on December 31, 1998.

    3.4  Option Grant. 
         ------------

         (a) The Company shall grant the Executive a stock option to purchase
    375,000 shares of common stock of the Company at an exercise price equal to
    90% of the IPO price, vesting in three (3) equal annual installments (except
    as otherwise provided in Section 5.3), with the first vesting to occur on
    the first anniversary of the Commencement Date. If, within six(6) months of
    the Executive's Commencement Date, the Company does not complete a public
    offering, the stock price on all of the above mentioned shares shall revert
    to $2.00 per share.

         (b) The Executive, if requested by the Company and the managing
    underwriter of the initial public offering of the Company's securities (the
    "IPO"), shall not sell publicly or otherwise transfer or dispose of any
    securities of the Company held by the Executive for a specified period of
    time (not to exceed 270 days), following the effective date of the
    registration statement for the IPO; provided that all then executive
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    officers, directors and holders of 5% or more of the outstanding stock of
    the Company enter into similar agreements. The Executive acknowledges that
    no representations have been made to him concerning the size, occurrence,
    valuation or timing of any IPO.

    3.5  Fringe Benefits. The Executive shall be entitled to participate in all
         ---------------
         fringe benefit programs that the Company establishes and makes
         available to its employees from time to time to the extent that
         Executive's position, tenure, salary, age, health and other
         qualifications make him eligible to participate.

    3.6  Reimbursement of Expenses. The Company shall reimburse the Executive
         -------------------------
         for all reasonable travel, entertainment and other expenses incurred or
         paid by the Executive in connection with the performance of his duties
         hereunder, upon presentation by the Executive of documentation, expense
         statements, vouchers and/or such other supporting information as the
         Company may request; provided, however, that the nature and amount of
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         such expenses shall be subject to the Company's expense policies as in
         effect from time to time.

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4.  Employment Termination.
    ----------------------

    The employment of the Executive pursuant to this Agreement shall terminate
upon the occurrence of any of the following:
 
    4.1  At the election of the Company, for Cause (as hereinafter defined)
         immediately upon written notice by the Company to the Executive. For
         purposes of this Agreement, "Cause" shall mean (a) a good faith finding
         by the Board, after notice to the Executive and an opportunity to be
         heard, of the failure of the Executive to perform his reasonably
         assigned duties, or the Executive's gross dishonesty, gross negligence
         or gross misconduct, or (b) the conviction of the Executive of, or the
         entry of a plea of guilty or nolo contendere by the Executive to, any
         felony;
 
    4.2  Thirty days after the death or Disability (as hereinafter defined) of
         the Executive. For purposes of this Agreement, "Disability" shall mean
         the inability of the Executive, due to a physical or mental disability,
         for a period of 90 days, whether or not consecutive, during any 360-day
         period to perform, with or without reasonable accommodation, the
         services contemplated under this Agreement. A determination of
         Disability shall be made by a physician satisfactory to both the
         Executive and the Company; provided that if the Executive and the
         Company do not agree on a physician, the Executive and the Company
         shall each select a physician and these two together shall select a
         third physician, whose determination as to Disability shall be binding
         on all parties; or

    4.3  At the election of the Executive, upon written notice of termination,
         for Good Reason (as hereinafter defined). For purposes of this
         Agreement, "Good Reason" shall mean (i) any significant diminution in
         the duties of the Executive under this Agreement or (ii) the Company's
         requirement that the Executive relocate beyond the greater New York
         metropolitan area, or (iii) if there is a change in control of the
         Company so that a single person or entity or an affiliated group of
         persons or entities has control of the Company (as control is
         understood under the Internal Revenue Code or securities laws of the
         US).

    4.4  At the election of the Executive, upon not less than two (2) weeks'
         prior written notice of termination, or at the election of the Company,
         upon written notice of termination.

    4.5  Upon the expiration of the Employment Contract.

5.  Effect of Termination.
    ---------------------

    5.1  Termination for Cause or at Election of the Executive. In the event the
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         Executive's employment is terminated for Cause pursuant to Section 4.1,
         or the Executive's employment is terminated at the election of the
         Executive pursuant to Section 4.4, the Company shall, through the last
         day of his actual employment by the Company, continue to pay to the
         Executive his base salary as in effect on the date of notice of
         termination and continue to provide to the Executive the fringe
         benefits available to him under Section 3.5 hereof, as of the last day
         of actual employment.
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    5.2  Termination for Death or Disability. If the Executive's employment is
         ------------------------------------
         terminated due to death or Disability pursuant to Section 4.2, the
         Company shall continue to pay to the estate of the Executive or to the
         Executive, as the case may be, for a period of 90 days after
         termination of employment due to death or Disability, the Executive's
         base salary as in effect on the date of termination.

    5.3  Termination by the Executive for Good Reason or at Election of the
         ------------------------------------------------------------------
         Company. If the Executive's employment is terminated by the Executive
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         for Good Reason pursuant to Section 4.3 or at the election of the
         Company pursuant to Section 4.4, the Company shall, during the
         Severance Period (as hereinafter defined), continue to pay to the
         Executive his base salary as in effect on the date of notice of
         termination and continue to provide to the Executive the fringe
         benefits available to him as of the date of notice of termination under
         Section 3.5, except during the Severance Period no options shall vest.
         Further, a pro rata share of the performance bonus referenced in
         Section 3.2 shall be paid to the Executive covering the period from the
         beginning of the calendar year up to the date of termination. For the
         purposes of this Section 5.3, the performance bonus referenced in
         Section 3.2 shall be calculated as 50% the Executive's annual base
         salary. For purposes of this Agreement, the "Severance Period" shall
         mean a period of six (6) months after such termination. Notwithstanding
         the above, if the Executive's employment is terminated for any reason
         during the first three (3) months of employment, there will be no
         severance benefit payable to the Executive. If a termination for
         reasons other than Cause occurs after three (3) months employment but
         before the first anniversary of the Commencement Date, option vesting
         shall be accelerated so that as of the termination date, one-third or
         125,000 of the options granted shall be vested. In the event that
         termination for reasons other than Cause occurs at any time following
         the first anniversary of the Commencement Date, those options otherwise
         scheduled to vest on the next vesting date specified in Section 3.4
         shall be accelerated and shall vest, on a pro rata basis, for each full
         or partial month that Executive remained employed by the Company
         through the termination date. The Executive shall have three (3) months
         after the termination date to exercise the vested options. If this
         paragraph conflicts with any applicable Stock Option Agreement, this
         paragraph shall control.

    5.4  Termination at Expiration of Contract. If, prior to September 13, 2001,
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         the Company has not offered to renew the Employment Contract on terms
         at least equal to those contained herein as modified during the
         Employment Period by mutual agreement of the parties and for a term of
         not less than one (1) year, the Company shall continue to pay the
         Executive his base salary in effect on the date of termination for a
         period of six (6) months after such termination and Executive shall
         remain eligible to receive a performance bonus, calculated in
         accordance with Section 3.2. The Company shall also provide to the
         Executive during the Severance Period, the fringe benefits available to
         him under Section 3.5.

    5.5  Survival. The provisions of Sections 3.3, 5.2, 5.3 and 5.4 shall
         ---------
         survive the expiration or termination of this Agreement under the
         circumstances specified in those Sections for the periods specified in
         such Sections. Sections 6 and 7 shall survive the termination of this
         Agreement.
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6.  Non-Compete.
    ------------

    (a) During the Executive's active employment and for the Severance Period,
the Executive will not:

        (i) be a partner, stockholder (other than as the holder of not more than
    one percent (1%) of the total outstanding stock of), officer, employee,
    consultant, director, joint venturer, investor or lender of or to America
    Online, Inc., CompuServe Corporation, Microsoft Network, AT&T WorldNet,
    Netcom On-Line Communications Services, Inc., EarthLink Network, Inc.,
    MindSpring Enterprises, Inc., or any corporation or other entity acquiring
    any of the foregoing; or involved in providing services that compete
    directly with Prodigy; or

        (ii) directly or indirectly recruit, solicit or induce, or attempt to
    induce, any employee or employees of the Company to terminate their
    employment with, or otherwise cease their relationship with the Company; or

        (iii) directly or indirectly solicit, divert or take away, or attempt to
    divert or to take away, the business or patronage of any of the clients,
    customers or accounts, or prospective clients, customers or accounts, of the
    Company, including but not limited to those clients, customers or accounts
    which were contacted, solicited or served by the Executive while employed by
    the Company.

    (b) If any restriction set forth in this Section 6 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

    (c) The restrictions contained in this Section 6 are necessary for the
protection of the business and goodwill of the Company and are considered by the
Executive to be reasonable for such purposes. The Executive agrees that any
breach of this Section 6 will cause the Company substantial and irrevocable
damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief.

    (d) Unless the context otherwise requires, all references in this Section 6
and in Section 7 below to the "Company" shall include all current or future
subsidiaries or affiliates of the Company.

7.  Proprietary Information and Developments.
    -----------------------------------------

    7.1  Proprietary Information.
         ------------------------

    (a) The Executive agrees that all information and know-how related to the
activities of the Company, whether or not in writing, of a private, secret or
confidential nature concerning the Company's business or financial affairs
collectively, ("Proprietary Information") is and shall be the exclusive property
of the Company. By way of illustration, but not limitation, Proprietary
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Information may include inventions, products, processes, methods, techniques,
formulas, compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, and customer
and supplier lists. The Executive will not disclose any Proprietary Information
to others outside the Company or use the same for any unauthorized purposes
without written approval by an officer of the Company, either during or after
his employment, unless and until such Proprietary information has become public
knowledge without fault by the Executive.

    (b) The Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings, or
other written, photographic, or other tangible material containing Proprietary
Information, whether created by the Executive or others, which shall come into
his custody or possession, shall be and are the exclusive property of the
Company to be used by the Executive only in the performance of his duties for
the Company.

    (c) The Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (a) and
(b) above, also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Executive in the course of the Company's business.

    7.2  Developments.
         -------------

    (a) The Executive will make full and prompt disclosure to the Company of all
inventions, improvements, discoveries, methods, developments, software, and
works of authorship, related to the activities of the Company, whether
patentable or not, which are created, made, conceived or reduced to practice by
the Executive or under his direction or jointly with others during his
employment by the company, whether or not during normal working hours or on the
premises of the Company (all of which are collectively referred to in this
Agreement as "Developments").

    (b) The Executive agrees to assign and does hereby assign to the Company (or
any person or entity designated by the Company) all his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. The Executive also
acknowledges that all work fixed in a tangible medium of expression shall be
deemed a work made for hire under the US Copyright Act such that the work is
owned by the Company at the moment of creation.

    (c) The Executive agrees to cooperate fully with the Company, both during
and after his employment with the Company, with respect to the procurement,
maintenance and enforcement of copyrights and patents (both in the United States
and foreign countries) relating to Developments. The Executive shall sign all
papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignment of priority
rights, and powers of attorney, which the Company may deem necessary or
desirable in order to protect its rights and interests in any Development.
<PAGE>
 
    7.3 Other Agreements. The Executive hereby represents that his performance
        -----------------
of all the terms of this Agreement and as an employee of the Company does not
and will not breach the terms of any agreement with any previous employer or
other party to refrain from using or disclosing any trade secret, confidential
or proprietary information, knowledge or data acquired by him in confidence or
in trust prior to his employment with the Company or to refrain from competing,
directly or indirectly, with the business of such previous employer or any other
party.


8.  Notices.
    --------

    All notices required or permitted under this Agreement shall be in writing
and shall be deemed effective upon personal delivery or upon sending, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown above, or at such other address or addresses as either party
shall designate to the other in accordance with this Section 8.

9.  Pronouns.
    ---------

    Whenever the context may require, any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns and pronouns shall include the plural, and vice versa.

10. Entire Agreement.
    -----------------

    This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement, except that the Agreement
Regarding Confidential Information, the Prodigy Business Conduct Guidelines, and
other documents executed on the commencement of employment, shall remain in full
force and effect.

11.  Amendment.
     ----------
 
     This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.

12.  Governing Law.
     --------------

     This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of New York in the United States, without reference
to conflict of law principles.

13.  Successors and Assigns.
     -----------------------

     This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns, including any corporation
with which or into which the Company may be merged or which may succeed to its
assets or business; provided, however, that the obligations of the Executive are
personal and shall not be assigned by him.

14.  Miscellaneous.
     --------------

        14.1 No delay or omission by either the Company or the Executive in
     exercising any right under this Agreement shall operate as a waiver of that
     or any other right. A waiver or consent given by either the Company or the
     Executive on any one occasion shall be effective only in that instance and
     shall not be construed as a bar or waiver of any right on any other
     occasion.
<PAGE>
 
          14.2 The captions of the sections of this Agreement are for
     convenience of reference only and in no way define, limit or affect the
     scope or substance of any section of this Agreement.

          14.3 In case any provision of this Agreement shall be invalid, illegal
     or otherwise unenforceable, the validity, legality and enforceability of
     the remaining provisions shall in no way be affected or impaired thereby.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.


                                PRODIGY COMMUNICATIONS CORPORATION


                                By:    /s/ Samuel Salameh
                                       -------------------------------
                                Title: Chairman and, CEO
                                       -------------------------------

                                EXECUTIVE


                                /s/ Andrea S. Hirsch
                                --------------------------------
                                Andrea S. Hirsch