In 1993, Encyclopedia Britannica had the most profitable year in the company’s history. Two years later, the company was nearly bankrupt and was sold for below book value. What happened in those two years?
Most folks would say that Britannica was done in by Microsoft Encarta. In 1993, Microsoft purchased rights to the Funk & Wagnalls Encyclopedia, created an electronic version, changed the name to Encarta, and began bundling Encarta with new computers. Encarta could be purchased off-the-shelf for around $50. Britannica sold for around $1,200. Competition from Encarta killed Britannica.
Or, did it?
Did the fact that Encarta was faster, more accessible and cheaper kill Britannica or was something greater at work here? My contention is that there was something greater at work: a paradigm shift. By paradigm shift, I mean a complete change in thinking or belief system that allows the creation of a new condition previously thought impossible.
Britannica was approached by Microsoft in the late 1980s regarding the Encarta project, but Britannica declined to become involved. Read More
Originally posted 2013-11-13 10:00:00.