ESSAY
RANDALL STROSS


This is the end for Encarta, the encyclopedia that Microsoft introduced in 1993 and still describes boastfully on its Web site as“the No.1 best-selling encyclopedia software brand for the past eight years.”Microsoft recently announced that sales would soon cease and that the Encarta Web site, supported by advertising, would be shut down later this year.

It’s hard to look at the end of the Encarta experiment without the free and much larger Wikipedia springing immediately to mind. But Encarta arguably would have failed even without that competition. The Google-indexed Web forms a virtual encyclopedia that Encarta never had a chance of competing against.

Encarta was conceived pre-Web and had a long gestation. In 1985, Bill Gates envisioned a CD-ROM encyclopedia as a“high-price, high-demand”product with the potential of becoming as profitable to Microsoft as Word or Excel. Early in the project’s history, a focus group of prospective customers was convened, and participants said they would happily pay $1,000 to $2,000 for a multimedia encyclopedia on CD-ROM. But at the time, no one foresaw the collapse of prices in the information economy. When Encarta was finally ready, Microsoft set its price at $395.

Encarta sold poorly, gaining only 3 percent of the market six months after its release, according to Microsoft.

Microsoft’s sales managers were frantic, begging the team to give them a“$99 Encarta.”The Encarta team relented, but said it was to be only a temporary reduction for the 1993 holiday sales season. Martin Leahy, a Microsoft sales manager, told any colleague who would listen,“You realize, don’t you, the price is never going up again, right?”It never did.

The $99 Encarta was a success. Over time, the price of the product fell even more. Earlier this year, Microsoft sold Encarta as a downloadable product for $29.95; most recently, it was marked down to $22.95.

Gary Alt, who joined Microsoft in 1995 , spoke with pride of the editorial work that he and his Encarta team had done. Fifty people were on the team in 2000, at the peak of Microsoft’s editorial investment in Encarta, he said.

That investment, however, seems to have gone unnoticed by Encarta’s users. Tom Corddry, a senior manager at Microsoft from 1989 to 1996 who headed up its multimedia publishing unit, said,“The editors overestimated the way students would say,‘This has been carefully edited! And is very authoritative!’”

Encarta would have been discontinued long before now if it hadn’t extended its natural life span by finding a market in international spots beyond the reach of the Internet, Mr.Corddry said.“That bought Encarta some time,”he added.

Encarta could not compete, however, against the Web and Google. Microsoft soon learned that the public would no longer pay for information once it was available free.