November 15, 2000 9:00 PM PST

Britannica.com cuts staff

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Britannica.com crippled by user volume

October 20, 1999
The online arm of Encyclopaedia Britannica has laid off about 16 percent of its staff, a sign that online educational sites are also under pressure to reach profitability.

Earlier this month, chief financial officer Jim Hurley and editor at large Bob McHenry both resigned, a Britannica.com representative said.

Britannica.com, a privately held company based in Chicago, gave notice to 75 U.S. staff members late Wednesday afternoon, the company said. Cutbacks were spread throughout several departments including editorial, product development, marketing, e-commerce and technology at the company's headquarters. After the layoffs, the company will employ 390 people internationally.

Britannica.com's sister company, Encyclopaedia Britannica, will not be affected by the layoffs. Britannica Online, its subscription-based reference site in operation since 1994, also will remain static.

Britannica.com chief executive Don Yannias said the layoffs are part of measures to help the company operate more efficiently and reach profitability sooner. Britannica.com offers information online for free, as opposed to the subscription model of Britannica Online, which has no advertising on the site and is geared more toward students and schools.

"As is the case with most dot-coms, the dramatic change in the way the financial community now evaluates Internet companies means we must reach profitability as quickly as possible," Yannias said in a statement.

"The path we are embarking on will make us a stronger company and should enable us to achieve the type of success financially that we have realized editorially."

Britannica.com, which is the online venture of 232-year-old reference guide Encyclopaedia Britannica, launched with much fanfare a little over a year ago. The site said it would place its entire 32-volume set, which sells for $1,250 in print, on the Internet for free, along with news feeds from newspapers, magazine articles, and a Web search directory. On the first day, it suffered an outage from too much traffic.

More than a year later, after stark changes in the dot-com climate, the company said Wednesday that it will begin scaling back editorial costs by licensing material from other publishers. The company also plans to launch a redesigned site early next year with improved advertising and e-commerce opportunities.

"As we go forward, we will continue to listen to our customers and look for ways to bring customers what they want, in the most compelling and cost-effective way possible," Yannias said.

Encyclopaedia Britannica is also developing an educational site for teachers and students called Britannicaschool.com. The site, which will launch later this year, will feature study guides and extensive school resources, as well as curriculum updates for teachers. It will be run as a subscription service for school districts and individuals.

Since September, Britannica.com has become increasingly popular among Web visitors. The reference site ranked in the top 100 of most-visited Web sites in September, according to Nielsen/NetRatings, up from 187th in August.

Luxembourg-based Encyclopaedia Britannica Holding owns Britannica.com.

 

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