Hail Britannica! Encyclopedia revs up on Internet

Encyclopaedia Britannica was the most prestigious reference work on the broad range of human knowledge in the years before the 21st century when information was commonly distributed in tightly bound, ink-covered pages known as ''books.'' The Encyclopaedia Britannica was widely admired as comprehensive and authoritative. It was aggressively promoted to parents by a skillful, guilt-inducing sales force.

Still, when revolutionary changes in information technology occurred at the end of the 20th century, Britannica proved far too slow-moving. Between 1995 and 2000, Britannica watched helplessly as the market in encyclopedia books all but evaporated as consumers turned to the Internet for all reference needs. A venerable repository of knowledge for nearly three centuries, Britannica was itself doomed by the Age of Information.

''Oh Spirit of Encyclopedia Entries Yet to Come,'' cried Ebenezer Britannica, ''answer me one question. Is this the shadow of an encyclopedia entry that will be or is it the shadow of an encyclopedia entry that may be, only?

''Spirit, hear me! I am not the encyclopedia that I was. Assure me that I yet may change these shadows you have shown me by an altered business model. I will honor the World Wide Web in my heart and try to keep it all the year. Oh tell me that I may sponge out these current profit statements!''

Britannica was better than its word. It embraced the Internet. In October 1999, it put all 32 volumes on the Web, making its entire product available for free. Britannica hoped to be blessed with hundreds of millions of dollars -- perhaps billions even! -- in advertising revenue. It yearned to one day hear it said that Britannica knew how to exploit the Web, if any information provider possessed the knowledge.

Or it could be that this time around, the spirits showed up too late.

Christmas week gives no sense of a life and death struggle here in the Britannica Centre in Chicago. On floor after thoroughly nondescript floor, men and women in cubicles bang away at computer keyboards, performing functions both ancient and brand new as far as the 231-year-old Britannica is concerned.

The encyclopedia may have been late in molding itself to the computer age, but it is now fully mobilized. If Britannica does not find salvation on the Internet, there will be no salvation.

Although bowed, at Britannica there is still a touch of the royal's ego, enough to suggest that more is at stake than the survival of an old encyclopedia company. The Internet may save Britannica, they say here, but Britannica can deliver to the Internet the one attribute the Web is commonly seen as lacking: authority.

In many cases, it's impossible to tell who is behind the information available on the Web and whether it can be believed. Britannica is believed. ''Britannica's hallmark has always been credibility,'' says Afrodite Mantzavrakos, one of the managers of the company's Web site, Britannica.com.

Even today, few turn away requests from Britannica. ''The wonderful thing about this job is that we can absolutely approach the finest scholars in the world,'' says senior editor Jeff Wallenfeldt. ''I can say that there isn't anyone who won't take our calls.''

Still, no amount of prestige was going to keep Britannica afloat if it did not adapt itself to the World Wide Web. The Internet made vast amounts of information available to anyone with a keyboard and a modem. Consumers didn't feel compelled to shell out $2,000 for an encyclopedia set when oceans of material were available for free on the Internet. Britannica was no longer competing with World Book and other encyclopedia companies. Its chief competitor was the PC itself. It was no contest.

''Parents saw the personal computer as an educational investment that cost about the same as our set of encyclopedias,'' says Tom Panelas, Britannica's director of communications. ''At the same time, a lot of those PCs had encyclopedias on CD-ROM bundled into the purchase price.''

True, the early versions of those encyclopedias, including Microsoft's Encarta (a descendant of the grocery store staple, ''Funk & Wagnalls'') were woefully inferior to Britannica. But PCs themselves were the gateway to the Web and its limitless information. Hardly anyone saw the need for a PC and a set of encyclopedia. Sales of Britannica's sets reportedly dropped by as much as 80 percent. (As a privately held company, Britannica is not required to reveal financial information, so it doesn't.)

In fairness, Britannica tried to answer the demands of the Web. In 1994, it actually became the first encyclopedia to go on the Web, making itself available to universities and other educational systems for a stiff license fee. That same year, it produced a primitive CD-ROM version of itself. In effect, though, the CD-ROM robbed business from the printed encyclopedia, and its sales were not enough to sustain the company. As a sign of the times, in 1996, the company laid off its legendary sales force, which as recently as the 1980s had numbered 2,200.

''They went through all sorts of contortions trying to prop up a dying business model,'' says Philip Evans, co-author of ''Blown to Bits,'' a book about how established companies responded to the demands of the Internet. The chapter on Britannica is titled ''A Cautionary Tale.''

Britannica's half measures did not solve the problem. The company kept proving itself too slow, too tentative, too wishy-washy. It still clung to the idea of deriving its revenue from tangible products. Oblivion was straight ahead. ''They were being pushed off the cliff,'' says Michael Godwin, an editor of E-Commerce Law Weekly.

At Britannica, they readily admit to these sins of the past. ''Up until (the sale), the previous management was not ready or willing to address the changes that were going on in the marketplace,'' says Kent Devereaux, a senior vice president at Britannica.com.

The candor may seem refreshing, but it's like a Democratic administration passing judgment on its Republican predecessor. After the 1996 sale, Britannica's new ownership threw out the entire management. Devereaux, 41, is part of the new team. With a background as a business consultant in the Internet, he arrived at Britannica a little more than a year ago with the assignment of helping rescue a dying enterprise.

The world learned of the grand restoration plan on Oct. 19, when the entire Encyclopaedia Britannica -- all 32 volumes and 44 million words -- went online for free. Britannica took the action with virtually no advertising and only one news release. But the response was explosive. Hundreds of thousands of Internet users tried to access the site in the first days, which forced Britannica to take itself off-line until it could greatly expand capacity.