any electronic interactive system that delivers information to users via telephone lines to personal computers (personal computer) (PCs) or via cables to terminals. Such a service provides information, usually in text form, about news, education, business, entertainment, shopping, and more. Some also provide message services and graphic and audio information. The term videotex was formerly applied to electronic interactive systems of this type.

Online services are managed by a host, or gateway, system that maintains a base of information accessible to satellite users. Users of so-called “dumb” terminals (i.e., those without processing capability) connected to mainframe or midrange computers simply access the information base via programs stored on the system. PC users typically “log on,” or access the host, through a modem (a modulating device that allows computers to communicate digital, or binary, data over conventional analog telephone lines). A PC software program serves as an interface between the server and a PC, allowing the user to maneuver through the online system and select different databases using a keyboard or a mouse.

National and regional online systems usually have local telephone numbers that PC modems can call to access either a local information base or an indirect long-distance connection, thus reducing extraneous long-distance telephone fees. Some online systems allow users to download (copy) large volumes of information onto a local memory storage device, which also minimizes the time the user is connected to the online system.

Besides offering a multitude of different information bases, ranging from full-text journal libraries to reports of missing children, online services allow users to, for example, reserve airline tickets, buy stocks, purchase groceries and consumer goods, and communicate with other users. In exchange for the service, users, or subscribers, typically pay a monthly membership fee. They may also pay to connect to various databases on the service or to download information. Popular national online services in the United States, each of which permits users to access numerous information services, include America Online, CompuServe, and Prodigy.

Online systems, notably France's Minitel service, emerged during the 1970s as government-sponsored computer time-sharing networks. They were popularized in the United States during the 1980s, primarily to communicate legal, business, and news information to PC users. A chief hurdle to the success and improvement of online systems has been slow information retrieval, largely a corollary of the modulation process.