Did Microsoft Kill Britannica.com?

Earlier this week, Encyclopaedia Britannica, Inc. responded to its troubles by announcing that it will split its digital properties off into a separate company and revamp its Web site to offer the contents of its 32-volume set online for free.

Following in the footsteps of other populare-commerce Web portals, Britannica.com’s site will be supported only by its corporate sponsors. The new Britannica.com will also be home to all of Encyclopaedia Britannica’s digital assets, which include both its free and subscription-based Web sites.

Desperate Move?

Additionally, rumors are swirling around this once-solid organization that an IPO could be in the offing.

Analysts point out that the company is hoping to emulate the success of other dot-coms such as Amazon.com or Yahoo! by giving away information that it used to sell in bound volumes for about $1,250 (US$).

However, many industry observers feel that even though Britannica is finally making a bold foray into the e-commerce arena, it may be too late. In fact, they think that the company could soon bite the dust.

After all, just 10 years ago, the privately held company boasted of $650 million in revenue and a sales force of 2,300. In 1998, the company generated only $300 million in sales.

While Britannica won’t confirm the number of its current sales force, some analysts believe it has greatly diminished. In fact, house calls by sales people were dropped in 1996.

Paying The Price For Spurning Microsoft

Much of Britannica’s current problems can be traced to the day a few years ago when it turned down Microsoft’s offer to produce its encyclopedia on a multimedia CD-ROM.

Microsoft then teamed up with discount-market encyclopedia publisher Funk & Wagnalls to produce and release a colorful multimedia version in 1993.

Trying to fight back, Britannica came out the next year with its own version, but it was criticized for its low graphics. It didn’t do well.

Is It Too Late?

What Britannica has experienced is a classic example of what can happen when a company allows itself to be swamped by new technology. Certainly, those wagon makers who scoffed at the idea of the automobile would be able to relate.

Nonetheless, even though the outlook for Britannica is not good, I still think the company has more than an even chance to recover and prosper for at least two reasons.

First, after being in business for 231 years, the name Britannica is synonymous with the term “encyclopedia.” This association is a powerful branding asset that money can’t buy. In fact, it is so powerful that Microsoft wanted to use it.

Add this branding power to the dynamics of a growinge-commerce economy — not to mention Britannica’s proven content — and I believe that the company definitely has the ingredients for a major comeback.

What do you think? Let’s talk about it.