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Britannica.com Bows Subscription-Based Services

Britannica.com Inc. Wednesday revised its business model to add pay services.

The paid services will include BritannicaSchool.com, a Web-based resource for the K-12 market, which will premier this summer. The focus of the site will shift toward reference, education and learning content, and away from topical features.

The altered business plans includes the layoffs of 68 of the Chicago-based company's 220 employees.

The catalyst behind the restructuring is a decline in advertising revenue, according to Don Yannias, Britannica.com CEO. "There was a time not long ago when most observers believed that Internet services had to be supported mainly through advertising," he said.

"We are out there in the marketplace, however, and we are convinced that a diversified business model combining free and subscription-supported products is the road to success."

The move is a good one, Emily Meehan, senior analyst at The Yankee Group told internetnews.com. "Frankly, I was surprised that the company launched as a free site. Britannica.com has killer content and a tremendous brand with a value that is already established," she said. "People were used to paying for that and I think, now, the company is in a better position than an Internet pure play to charge for content."

This restructured business strategy is the way the Web is headed, she added. "In light of the way the marketplace, Web-based subscriptions are the way to go. Britannica.com has content that is needed and used by large organizations, such as universities," she said.

"Further, they have a well-known brand and established offline relationships. By starting with this type of model, they can move into streaming and integrate distance-learning opportunities. It is definitely a good business move," she said.

The company will explore additional premium services for both the consumer and education markets, according to Tom Panelas, a spokesperson for Britannica.com Inc.

"Britannica has had extensive experience with subscription products on the Internet since launching Britannica Online in 1994," he said. "That product was the first encyclopedia on the Internet and one of the first information services to be supported by subscriptions and site licenses."