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,’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 spokesperson, Tom Panelas, Wednesday. He predicted the site
will be back up by early next week.

Traffic to 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, 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 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.”

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