Page 169 - Electronic Commerce

Chapter 3

Advertising-Supported to Subscription Model
Northern Light was founded in August 1997 as a search engine, but a search engine that
did more than search the Web. It also searched its own database of journal articles and
144 other publications to which it had acquired reproduction rights. When a user ran a
search, Northern Light returned a results page that included links to Web sites and
abstracts of the items in its own database. Users could then follow the links to Web sites,
which were free, or purchase access to the database items.
Thus, Northern Light’s revenue model was a combination of the advertising-supported
model used by most other Web search engines plus a fee-based information access
service, similar to the subscription services offered by ProQuest Dialog and Dow Jones
Factiva that you learned about earlier in this chapter. The difference in the Northern
Light model was that users could pay for just one or two articles (the cost was typically
$1–$5 per article) instead of paying a large amount of money for unlimited access to its
database on an annual subscription basis. Northern Light also offered subscription access
to most of its database to companies, schools, and libraries.
In January 2002, Northern Light decided that the advertising revenue it was earning
from the ads it sold on search results pages was insufficient to justify continuing to offer
that service. It stopped offering public access to its search engine and converted to a new
revenue model that was primarily subscription supported. Northern Light’s new model
generates revenue from annual subscriptions to large corporate clients. Its main products
today include Business News, Discovery—which searches life sciences conference
proceedings—SinglePoint—a search engine that runs on corporate databases—and MI
Analyst Text Analytics, a meaning extraction tool used in business research applications.

Multiple Changes to Revenue Models
Encyclopædia Britannica has developed one of the most respected brand names in research
and education. Beginning in 1768 as a sort of precomputer-age frequently asked questions
(FAQ) list, a group of academics developed the encyclopedia out of collected notes they had
made while conducting research and decided to publish them as a series of articles.
The company has been through a number of revenue model transitions as it
developed its current online business strategy. When Encyclopædia Britannica first moved
online in 1994, it began with two Web-based offerings. The Britannica Internet Guide was
a free Web navigation aid that classified and rated information-laden Web sites. It featured
reviews written by Britannica editors who also selected and indexed the sites. The
company’s other Web site, Encyclopædia Britannica Online, contained the full text and
pictures from the print encyclopedia. It was available for a subscription fee or as part of
the Encyclopædia Britannica CD package. Britannica’s intention was to use the free site to
attract users to the paid subscription site.
In 1999, disappointed by low subscription sales of Encyclopædia Britannica Online,
Britannica converted to a free, advertising-supported site. In terms of Web site traffic, the
new revenue model was a huge success. The first day the new free site, Britannica.com,
became available it had more than 15 million visitors, forcing Britannica to shut down for

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