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Britannica.com Finds Transition Tough

The transformation of Encyclopedia Britannica into a new-age electronic media company apparently is not going off without glitches.

As Internet users rush to access its newly free Web content, Britannica.com's servers have been swamped, and the company has had to close its virtual front doors until it can beef up its systems.

"We don't want people to go to the site and be frustrated, so we've put up a message explaining the situation, and as soon as we've got it working at a capacity with which we're comfortable, we'll bring it back up," said Britannica.com spokesperson, Tom Panelas, Wednesday. He predicted the site will be back up by early next week.

Traffic to Britannica.com surged from next to nothing to more than 10 million unique visitors per day since the announcement last week that the company has made the entire contents of its famous, multivolume encyclopedia available on the Web for free. According to search site Lycos Inc. (LCOS), Britannica was the fifth most popular user search last week, topping even baseball and actress Pamela Anderson.

The present outage is egg on the face for Britannica, just as busy signals were for America Online a year and a half ago, but according to Philip Evans, a senior vice president with the Boston Consulting Group, it's a short-term problem that should not overshadow the company's remarkable strategic turnabout.

"They might become the Yahoo of scholarship and well-validated knowledge on the Web," said Evans, co-author of the forthcoming Harvard Business School book, Blown to Bits, which examines how technology is obliterating old business models.

Evans said Britannica belatedly recognized that content is not necessarily king on the Web, and instead, the true value of its brand might be to serve as an Internet navigation service. To this end, Britannica.com is using its encyclopedia as a kind of loss leader, and has assembled a directory of recommended web sites, signed content partnership deals with several newspapers and magazines, and built an online store containing educational toys, gifts and other items.

But as chronicled in a chapter by Evans and co-author Thomas Wurster, Britannica spun its wheels for years before it realized its present opportunity. While Microsoft was launching Encarta on CD-ROM for around 50 dollars, Britannica was still clinging to the idea that its book-format content remained more valuable -- all the while failing to recognize what Evans said is the real reason why some parents were willing to spend more than $1,000 on an encyclopedia.

"It's a guilt sale," said Evans. "The business model was never based on the content. Parents felt like they hadn't done enough for their kids, Johnny wasn't doing very well in school, so they bought him a set of encyclopedias."

According to Evans, when electronic encyclopedias cannibalized books five years ago, parents just began pouring those guilt dollars into a different medium -- the personal computer -- for the same reasons, and for about the same amount of money.

Panelas of Britannica.com confirmed that the company has moved away from being solely a creator of content to becoming an aggregator as well. But he insisted that the site will have an edge over other portals.

"The same standards of quality that we have imposed for over 200 years on the encyclopedia itself apply to what goes onto the site, whether its our content or that from our partners. It will be Britannica quality."