Reference Software
Microsoft Encarta
In 1993 Microsoft's Encarta helped kill the printed encyclopedia, a multimedia reference on a single CD-ROM that made the expensive shelf of leather-bound volumes look obsolete. Then it was killed in turn. Wikipedia, launched in 2001, offered far more, for free, written by anyone, and Encarta's paid, closed, editor-written model could not compete. By 2009 Wikipedia had about 2.7 million English articles to Encarta's 42,000 and drew 97 percent of online-encyclopedia traffic, and Microsoft shut Encarta down.
- Company
- Microsoft
- Started
- 1993
- Ended
- 2009
- Encarta articles vs Wikipedia's 2.7 million
- 42,000
- Collapse speed
- Gradual
- Preventability
- Medium
- Lesson transfer
- Universal
- Last reviewed
- 2026-07-26
Narrative
The story
The ambition
For most of the twentieth century, an encyclopedia was a physical thing, a shelf of heavy, expensive volumes that a family bought once and that began going out of date the day it arrived. In 1993 Microsoft changed that. Encarta put a multimedia encyclopedia, text, images, sound, and video, on a single CD-ROM, drawing on content Microsoft had licensed from Funk & Wagnalls. It was cheaper than a print set, it was searchable, and it came bundled with new Windows computers. Encarta helped make the printed encyclopedia obsolete, and it was, for a while, the way millions of people looked things up.
The rise
Through the 1990s and into the 2000s, Encarta was a solid business. It sold as a CD-ROM and later a DVD, moved to an online edition with a subscription, and shipped in deluxe versions with monthly updates. The content was written and edited by professionals, which was its selling point: an encyclopedia you could trust because experts had produced it. Microsoft was doing to Britannica what a later generation of software would do to Microsoft, using a new medium to undercut an established, expensive incumbent.
The cracks
In 2001 a very different kind of encyclopedia appeared. Wikipedia was free, it was open, and anyone could write or edit it. Its quality was uneven at first and its model sounded absurd to people who valued expert curation, but it had two things Encarta could not match: it cost nothing, and it grew without limit because its labor was volunteer and worldwide. Encarta's closed model could not keep pace. A 2005 attempt to let users suggest edits still routed every change through Microsoft's editors and did not let outsiders create new entries at all.
The collapse
The gap became a chasm. By 2009 the English Wikipedia held around 2.7 million articles to Encarta's roughly 42,000, and, according to the web tracker Hitwise, Wikipedia drew about 97 percent of visits to online encyclopedias from US users while Encarta took just 1.27 percent. There was no longer a business. In March 2009 Microsoft announced it would discontinue Encarta; the websites closed on October 31, 2009, and the software stopped selling that June.
The aftermath
Encarta became a small case study in its own subject. The product that had disrupted the print encyclopedia with a new medium was itself disrupted, within a decade and a half, by a newer model it could not or would not adopt. Microsoft, facing broader cost-cutting that year, folded the effort. The irony was noted at the time that Encarta's own most complete obituary was its entry on Wikipedia, the thing that had replaced it.
The lessons
Encarta is a clean lesson in being disrupted from below by something free. Its content was good and its business was real, and none of that mattered once a free, open, and effectively infinite alternative existed. The transferable lesson is that when a competitor changes the economics of the whole category, a better-made version of the old thing is not a defense. Microsoft could have tried to embrace the open model, to make Encarta free and collaborative, but that would have meant destroying its own paid product, and it chose instead to defend the model until the model was gone. A closed, paid product rarely wins against an open, free one that is good enough, because good enough plus free plus unlimited beats excellent plus expensive plus finite.
Causal timeline
Failure Anatomy
- 1993
Encarta disrupts the print encyclopedia
Microsoft launches Encarta in 1993 as the first multimedia CD-ROM encyclopedia, undercutting expensive print sets like Britannica. [1]
- 1995
A paid, closed model
Encarta sells as a CD-ROM and online subscription, professionally edited and bundled with Windows, through the 1990s and early 2000s. [2]
- 2001
Wikipedia arrives, free and open
Wikipedia launches in 2001 with a free, crowdsourced model that anyone can edit. [3]
Stronger competitor - 2009
- 2009
Microsoft pulls the plug
Microsoft discontinues Encarta in 2009; the websites close on October 31 and the software stops selling that June. [6]
Failure to adapt
Structured analysis
What Went Wrong
Root causes
A paid, closed encyclopedia in a free, open web. Encarta's professionally edited, paid model could not match Wikipedia's free and open one, and Microsoft never opened Encarta up to real collaboration even as the open model won. [2] [3] [5]
Wikipedia, free and vastly larger. Wikipedia's crowdsourced model produced far more content at no cost and constantly updated, drawing the overwhelming majority of encyclopedia traffic away from Encarta. [3] [4]
Contributing factors
No one pays for what is free and better. Once a free, larger, constantly updated encyclopedia existed, the demand to pay for a smaller closed one evaporated. [4]
Immediate trigger
Wikipedia takes almost all the traffic. By 2009 Wikipedia drew about 97 percent of US online-encyclopedia visits to Encarta's 1.27 percent, leaving no viable business. [4]
Visible symptoms
1.27 percent of the traffic. Encarta's share of online-encyclopedia visits collapsed to a fraction while Wikipedia took nearly all of it. [4]
Warning signs
A half-measure at opening up. Encarta's 2005 attempt to accept user suggestions still required editorial approval and barred new entries, a sign it would not embrace the open model that was winning. [5]
Wikipedia's runaway growth. Through the 2000s Wikipedia's free article count raced far past Encarta's, an unmistakable sign of where readers were going. [3]
Affected groups
Evidence
Claims & sources
Every numbered marker in the analysis links to the claim it rests on, and each claim to its sources.
- [1]
Microsoft launched Encarta in 1993 as the first multimedia CD-ROM encyclopedia, built partly on licensed Funk & Wagnalls content, and it helped make the expensive print encyclopedia obsolete.
- [2]
Encarta was a paid, professionally edited product, sold on CD-ROM and later by online subscription (about $400 at launch, later $99) and bundled with Windows.
- [3]
Wikipedia, launched in 2001 with a free, crowdsourced model, overtook Encarta, and by 2009 the English Wikipedia had about 2.7 million articles to Encarta's roughly 42,000.
- [4]
By 2009, according to the web tracker Hitwise, Wikipedia drew about 97 percent of US online-encyclopedia visits and Encarta only about 1.27 percent.
- [5]
Encarta's closed, editor-reviewed model could not match Wikipedia's open collaboration, and its 2005 attempt to let users suggest edits still required staff approval and did not allow new entries.
- [6]
Microsoft announced Encarta's discontinuation in March 2009; the websites closed on October 31, 2009, and software sales ended by June 2009.
Sources
Microsoft To Shutter Encarta, Read All About It On Wikipedia
TechCrunch · 2009-03-30
Victim Of Wikipedia: Microsoft To Shut Down Encarta
Forbes · 2009-03-30
What Happened To Encarta and Why Microsoft Discontinued It
SlashGear · 2024-07-19
Microsoft kills MSN Encarta
The Register · 2009-03-31