Brittanica.com to cut free service, reduce staff

Brittanica.com Inc., the online business unit of Encyclopaedia Brittanica Inc., will no longer provide information at its Web site for free and instead will begin a subscription service for its online content as part of a restructuring announced yesterday.

As part of the reorganization, the company will lay off 68 of its 220 employees, most of whom work in Chicago. The cuts begin this week and will continue through June, according to a company statement. This is the second round of layoffs at the Chicago-based company. In November, 75 employees lost their jobs.

In addition, the company will heavily market other pay services, such as BrittanicaSchool.com, for students in kindergarten through high school.

The news comes less than 18 months after Brittanica.com launched its free service to an information-hungry online public.

A crushing surge of 10 million visitors forced the site to temporarily shut down when it first went online in October 1999, but that success apparently hasn't translated into monetary success for the subsidiary of Luxembourg-based Encyclopaedia Brittanica Holding SA.

Like many Internet pure-plays, Brittanica.com planned to raise revenue through advertising. With the Internet advertising business in a decline, however, the company had to look for new revenue sources.

"There was a time not along ago when most observers believed that Internet services had to be supported mainly through advertising," said Don Yannias, Britannica.com's CEO. "We are out there in the marketplace, however, and we're convinced that a diversified business model combining free and subscription-supported products is the road to success."

Brittanica was the first encyclopedia on the Internet when it launched with a paid, subscription service in 1994.

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