Thursday, November 29, 2001

A Company That Offers an Online Library Lays Off Half Its Employees By SCOTT CARLSON Questia Media laid off half of its staff members this month. The company, which operates a database of nearly 70,000 e-books, has been trying to market its services to undergraduates, high-school students, and even some college libraries. However, the subscriptions -- at $19.95 a month -- have not sold as well as company officials had planned. Although Questia started the year with 280 employees, only 68 remain now. In May, the company laid off 140 employees as it slowed its production of digitized books. Ann M. Brimberry, a spokeswoman for the company, said the latest layoffs were an attempt to hunker down during bad economic times. "With the world events and the economic environment, it was prudent for us to conserve the capital and reduce expenses," she said, adding that the layoffs had hit every part of the company but mainly the engineering and operations departments. However, Ms. Brimberry said that the company had attracted more investors since the end of September and would announce the amount raised near the end of the year. From May until the end of September, the company attracted $16-million in venture capital. Before that, Questia had raised $135-million from investors. She added, "What we're seeing week over week is subscriber increases at a really good rate." She would not reveal that rate now, however; the company might release that information when it announces the new financing. Questia is not yet profitable, but company officials hope to be in the black by the end of 2002. Whether or not the company will ever reach that goal is a topic of skepticism among librarians -- even those who subscribe to the service. Elmhurst College, in Illinois, was one of the first colleges to get a campuswide subscription for its students, for this fall semester. Susan Swords Steffen, the director of the library there, said she would poll students at the end of the semester for their opinions of Questia. As of this week, she hadn't heard much, "which sort of indicates in my gut that if I don't know already, their reaction is not going to be much of anything," she said. Ms. Swords Steffen would not divulge how much the college had paid for the subscriptions but said it was a pittance compared with other online databases. "We approached it as an experimental thing," she said. "If there are good results, that's good. If they go out of business, it won't matter." Ms. Swords Steffen set up the deal with Questia after calling the company to complain about its aggressive marketing tactics on her campus. Last weekend, the company sent out an e-mail advertisement that encouraged people to buy gift subscriptions for students for the holidays. The ad urged people to "find out why Questia is better than the school library, public library, and Internet search engines," a claim that irked some librarians. Background articles from The Chronicle: Companies Find Academic Libraries a Key Target and a Tough Sell (5/18/2001) Digital-Library Company Plans to Charge Students a Fee for Access (12/1/2000) NetLibrary Files for Bankruptcy Protection, and OCLC Offers to Buy Its Assets (11/16/2001) Easy-to-print version E-mail this article

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