For nearly 250 years, the Encyclopaedia Britannica was a bookshelf-busting series of gilt-lettered tomes, often purchased to show that its owners cared about knowledge. It was the sort of physical media expected to die in the internet era, and indeed, the encyclopedia’s publisher announced that it was ending the print edition in 2012. Skeptics wondered how Britannica the company could survive in the age of Wikipedia. The answer was to adapt to the times.
Britannica Group runs websites, including Britannica.com and the online Merriam-Webster dictionary, and sells educational software to schools and libraries. It also sells artificial intelligence agent software that underpins apps like customer service chatbots and data retrieval.
Britannica has figured out not only how to survive, but also how to do well financially. Jorge Cauz, its CEO, said in an interview that the publisher enjoyed pro forma profit margins of about 45%.
The company is weighing an initial public offering, in which it could seek a valuation of about $1 billion, according to a person with knowledge of the deliberations.
That could provide a sizable return for the company’s owner, Swiss financier Jacob E Safra, who acquired the publisher in 1995 and, in a lawsuit filed in 2022, cited an investment bank in valuing Britannica at $500 million. The company says its websites draw over 7 billion annual page views a year, with users in more than 150 countries.
Britannica has come far from its origins in the 18th century as the publisher of a reference work put together by three Scottish printers. Over the years, the Encyclopaedia Britannica became a heavyweight of the knowledge business, both literally – the 32-volume 2010 edition, the last to run in print, weighed 129 pounds – and figuratively, drawing on contributions from thousands of experts. It also became an aspirational status symbol, with customers paying nearly $1,400 for that edition.
By the time the last Encyclopaedia Britannica was printed, the company had already started its suite of websites and educational software. Now it sees even greater opportunity in the growth of generative AI tools, which the company says can help make learning more dynamic – and therefore more desirable.
Cauz said Britannica had experimented with the technology over the past few decades. It acquired Melingo, the company that makes its AI agent software, in 2000 because of its strength in natural language processing and machine learning. And it has two technology teams, based in Chicago and in Tel Aviv.
The vertiginous popularity of chatbots like ChatGPT convinced executives that they needed to invest more in the space. Britannica now uses AI in creating, fact-checking and translating content for its products, including the online encyclopedia. It also created a Britannica chatbot that draws on its online encyclopedia’s stores of information, which Cauz said was more likely to be accurate than the more generalised chatbots that could be prone to “hallucinations.”
The firm has more projects powered by generative AI in the pipeline: an English-language tutoring software that will use the tech to power avatars and customise lessons for each student, a program to help teachers create lesson plans, and a revamped thesaurus for the Merriam-Webster website that can handle phrases, not just words.