Encyclopaedia Britannica now free

Pay-for site to be replace with free, with-ad version

Encyclopaedia Britannica is expected to announce Tuesday that it plans to split off its digital properties into a separate company and overhaul its Britannica.com Web site, making the encyclopedia's database free to users for the first time.

The site will be free, but it will have corporate sponsors and commercial links. So when Johnny starts doing that report on the moon landing or the Trojan Horse he won't need to subscribe -- but he will need to sift through some sales pitches for toys, books and other items.

The new company, called Britannica.com, will house all of Encyclopaedia Britannica's digital assets, which include both its free and fee-based Web sites, as well as its CD-ROM and DVD businesses. Encyclopaedia Britannica chief executive Don Yannias will leave that post and become CEO of Britannica.com.

Asked whether Britannica.com was considering an initial public offering of its new digital company, one official said, "We're not ruling out any options at this point." Paul Hoffman, 43, now senior vice president of editorial, will become president of the slimmed-down Encyclopaedia Britannica, which will retain the firm's print assets. The company does not plan to name a new CEO for the print operations.

The moves are designed to take advantage of the rapidly growing online marketplace, in which users prefer to retrieve information over the Web rather than crack open a book. Many publishing analysts say Britannica, a closely held Chicago company, is behind the curve in capturing consumers amid the Internet revolution. The latest moves are the company's third stab at a consumer reference site. But analysts reacted positively to the new site. "If there is anything that was predesigned for the Internet, it was the Encyclopaedia Britannica," Yannias said.

Beginning Tuesday, users of the free site will have full access to the print encyclopedia's content as well as articles from 75 magazines, including Fortune, Newsweek, Entertainment Weekly and Science. Previously, the britannica.com site primarily offered reviews of Web sites, in essence giving a seal of approval to the reliability of information found in certain places on the Internet. It also carried news from washingtonpost.com and Newsweek.com. The company previously charged $5 a month for an individual subscription to the online encyclopedia.

The now-expanded free site will have paid advertisements and sponsorships from companies, including computer seller Gateway and flower seller 1-800Flowers.com. Revenue is also expected to come from sales of educational toys and products from the site's online store, which is being developed. The company also plans to announce a deal with Barnes & Noble through which Encyclopaedia Britannica's site will offer a list of books relevant to users' searches.

The company will continue to maintain a site for subscribers that will remain free of advertising (www.eb.com). That site will be aimed mainly at academic institutions. But the company is hoping to extend the appeal of that site to younger students. On that site, the company plans to offer material from Compton's Encyclopedia through a licensing deal with Mattel Learning unit.