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.”

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