Running round in Circles

2. Running round in Circles Jason Plent Managing Director

3. The first edition of Britannica states the following: “A Cyclopaedia ought to explain , as much as possible, the order and connection of human knowledge”

4. Our mission This is what we have with the web: Order – automated process Connection – liberation of information But what the first edition didn’t say was take away the friction And what do I mean by that?

5. I mean not knowing - that is what creates friction in my life Not knowing the progress of something, or the context of something, is what prevents you from evaluating success and doing more of it

6. And when you think of it, today’s successful hunters and gatherers are those who hunt and gather for information successfully Not always the information you expect Guess what the most successful SMS messaging service is in Finland

7. What though? Am talking about the Net? No not really – I’m talking about digital connectivity Because anyone on the Net cant be seen not to talk about WAP, and any WAP developer has to know about enhanced TV, and so on Why, because they are cool And they are cool for longer if they take away the friction

8. Because for the first time anyone can talk to anything In Helsinki a few months ago I saw someone buy a coke with their phone Soon the fridge might talk to the shop and cut out the middle man – me (and I cant wait)

9. So where are they and what do they want, these people who are so cool? The answer is they are everywhere soon Italy has gone from 500k to 9 million people online in months it seems And we are not even looking at the Italian WAP market yet

10. 4.9% 4.5% 25.7% 35.7% 11.5% 58.3% 45.9% 13.5% Europe Asia US All other We need to focus on an increasingly global online marketplace Online Household Distribution Worldwide 1999 2002

11. Where do they live in Europe?

12. What do they want all these people? I’m not sure But maybe…

13. Valued vs. Commodity Content

14. What will that give you?

15. Where will you sit?

16. How will you keep them coming in?

17. So, what does Britannica want to do?

18. Britannica.com Mission To be the world’s most trusted source of information, knowledge and learning through digital media.

19. Current responsibilities and market opportunities Encyclopædia Britannica Holding, S.A. (Luxembourg) Encyclopædia Britannica, Inc. Britannica.com Inc. • Non-English language rights • Print products • Global English language electronic rights • CD-ROM / DVD-ROM • United Kingdom, Australia, India

20. Britannica.com Market Segments Britannica.com Inc. Business to Consumer (B to C) Business to Business (B to B) • Britannica.com • Britannica.co.uk • Britannica.com.au • CD-ROM / DVD-ROM • Syndicated Products • Alternative Platforms • BritannicaSchool • BritannicaU • Syndicated Products

21. Britannica.com Competitive Advantage Britannica.com’s strategy is based on the following four competitive advantages The power of the Britannica global brand Exclusive access to EB’s unique IMARS search Exclusive access to Britannica.com, EB and other third-party content Editorial expertise applied to the “Seals of Approval” (SOAPS) strategy

22. Britannica.com Competitive Advantage In a recent study, Britannica scored higher on familiarity than most other Internet brands (4th out of 36 brands) THE BRAND Yahoo!80% AOL 77% CNN 70% Britannica 60% Amazon.com59% Excite 56% Lycos 55% New York Times 36% Source: Ashcraft Research, June 1999

23. Britannica.com Competitive Advantage Electronic distribution rights to the highest quality content CONTENT • The Encyclopædia Britannica database, the most comprehensive and authoritative in its class • The Britannica Internet Guide, the Web’s best sites selected by Britannica’s editors • Original online editorial content including features from internationally renown contributors such as Nelson Mandela, the Dalai Lama, and others.

24. Britannica.com Competitive Advantage Britannica.com will bestow its “Seals of Approval” (SOAPS) on the best content, products, and information services available SOAPS • Partnerships with The Washington Post, Newsweek, The Guardian, and News Interactive for custom, localized news • 100 category-leading magazines in Arts & Entertainment, Science, Health, Technology, Finance, Sports and Politics • Merriam Webster and Oxford English dictionaries • The Britannica.com store offers quality products recommended and selected by Britannica’s editors • Products limited to Britannica’s core value proposition of knowledge and learning (e.g., educational toys, books, etc.)

25. Britannica.com Competitive Advantage Exclusive access to EB’s proprietary indices will provide aunique sustainable advantage SEARCH • IMARS (Information Management and Retrieval System), comprehensive information structured in an inter-relational database system • The most comprehensive index and thesaurus in the English language, a result of tracking knowledge for the last 232 years • Enables superior search precision and relevance • Permits incorporation of additional third-party content databases into the service

26. Britannica.com - beyond the Business Plan Growth Opportunities • Content e-commerce and product line expansion • Wireless platforms (Palm VII, WAP, Symbian) • Content Syndication (KnowledgeWire, Internet Guide) • Synergies with EB, Inc. for non-English language markets • University Market

27. Britannica.com - Marketing Strategy Four Metrics • Revenue per user (RPU) - Increase to $10 by 2002 • Cost per user (CPU) - Decrease to $3 by 2002 • Churn - Reduce to below 5% per month by 2002 • Usage - 500m+ page views per month by December, 2002

28. CustomerLoyalty Britannica.com Marketing Strategy Distribution Syndication Optimization • E-Commerce • Sponsorships • Anchor Tenancies • Syndication • Distribution • Meta Search • Reverse Engineering • E-Commerce Traffic Stimulation Search

29. Britannica.com Target Market Quantitative research confirms that Britannica.com’s offering is highly relevant to a broad, educated, and relatively affluent segment representing a variety of psychographic profiles • Age 25-49, $50K+ income, college graduate parents, children, and high school students • Knowledge workers (teachers, researchers, journalists, professors) • Passionate hobbyists who share common attitudes • Confident thinkers -- ordinary smart people -- in need of continual intellectual stimulation • Internally motivated • Culture explorers • Magazine lovers • News junkies

30. Britannica.com Marketing Strategy Distribution • Content Syndication - Britannica Internet Guide, KnowledgeWire, Britannica Quiz, etc. • Search Engine Optimization - 72,000 meta-tagged articles • Strategic Alliances - Best of breed content, search engine and Internet Service Provider partners • Affiliate Program - 120,000 editor-selected web sites • CD ROM - OEM deals

31. Britannica.com - Product Strategy Key Product Features • Superior search featuring branded content • Everyday relevant content • Dynamic in-depth channel content • Unique treatment of current events, “news in context” • Community tools & technology

32. Britannica.com advertising launch - SuperBowl, 2000 • Britannica.com - March 29, 2000 - Enhanced search • Britannica.com - April 26, 2000 - Redesigned interface • Britannica.com - May 15, 2000 - Australia soft launch • Britannica.com - July 1, 2000 - United Kingdom soft launch • Britannica.com - September 15, 2000 - Community features Britannica.com - Product Roll-Out

33. Britannica.com – What next? Education

34. Britannica.edu - The Opportunity The Education Market is Huge $660B Education market is 10% of GDP $7B $7B Source: Quality Education Data Inc., U.S. Dept. of Education Supplies Text Materials

35. Britannica.edu - The Opportunity There are 65 Million Students 50 Million K-12 Students 15 Million Higher Ed Students One-third of higher education students are part-time Source: Quality Education Data Inc., U.S. Dept. of Education, and U.S. Census Oct. 1999.

36. Britannica.edu - The Opportunity The Online Education Market Is Growing 42M 50% 10% 17M 1999 2002 1996 1999 K-12 Users Classroom Penetration Source: Quality Education Data Inc., U.S. Dept. of Education

37. Britannica.edu - he Opportunity Online School Access Becoming Universal 95% of U.S. K-12 schools now have some form of internet connection, up from 35% in 1994 and 78% in 1997. Education is now online. Source: U.S. Dept. of Education (1994-1997 data).

38. Britannica.edu - The Competition No Single Player Dominates the Market Portal: AOL, LycosZone, Yahoo! General Media: MaMaMedia, MTV Online Ed Media: Classroom Connect, Family Education Network, HighWired.com Publishers: BigChalk.com, Copernicus, Scholastic Online, New York Times Learning Network Courseware: MediaSeek, Lightspan Parntership, Computer Curriculum Corporation Systems Providers: ZapMe!, National Computer Systems, LearningStation.com

39. Britannica.edu - the Vision To be the leading provider of online content and community services to the education sector

40. Britannica.eduStudy Guide

41. Any reason to doubt? • Overhyped investment – not that some aren’t actually undervalued, but are we now looking at just names, Urls or a key individual? • .com has magical powers, trading has become like vote for you favourite web site. This is dangerous. Did you see the markets last week? • Has anyone made money (except perhaps Yahoo and AOL)? • Its not cheap to do all this stuff on the web • It doesn’t work properly • Are people really buying advertising space? • Only opticians pay for eyeballs • You need a personal experience • No one likes shopping on the web

42. Any reason to be scared in Italy? • Last year, 32 firms came to the bourse in Milan, compared with 18 in 1998 and 11 in 1997. Investment bankers, who are vigorously seeking out fresh candidates, say around 300 firms are waiting to float, and the queue is growing. Until the early 1990s, Italy's stockmarkets were equivalent to under 15% of GDP. Thanks to listings (and also privatisations), that figure is now 63% and is continuing to rise. • Scrutiny, stocks and sales

43. Grazia Mille Any questions? Per informazioni jplent@britannica.co.uk