Information Rules

2	Pricing Information

The Encyclopedia Britannica has been regarded as a classic reference work for more than two hundred years. And, as a classic, it has commanded a premium price: a few years ago a hardback set of the thirty-two volumes of the Britannica cost $1,600.

In 1992 Microsoft decided to get into the encyclopedia business. The company bought rights to Funk & Wagnalls, a second-tier encyclopedia that had been reduced to supermarket sales by the time of the purchase. Microsoft used the Funk & Wagnalls content to create a CD with some multimedia bells and whistles and a user friendly front end and sold it to end users for $49.95. Microsoft sold Encarta to computer original equipment manufacturers (OEMs) on even more attractive terms, ...