Software giant Microsoft Corp. (MSFT) announced Monday that it is discontinuing its MSN Encarta encyclopedia Web sites and will stop to sell Microsoft Student and Encarta Premium software products, which reportedly is decided due to pressures from lack of sales amid strong growth of Wikipedia and other free sites in the online reference market.

The Redmond, Washington-based company, in a notice posted to its MSN Web site, stated that it will discontinue its Encarta Web sites worldwide on October 31, 2009, excluding Encarta Japan, which will be closed after two months on December 31. Meanwhile, Microsoft will cease to sell Microsoft Student and Encarta Premium software products worldwide by June 2009.

As part of clarification to its subscribers, the company, on its FAQ page, said the decision to exit the Encarta business was part of Microsoft's goal to deliver the most effective and engaging resources.

Encarta has been a popular product around the world for many years. However, the category of traditional encyclopedias and reference material has changed. People today seek and consume information in considerably different ways than in years past, the company said in the notice.

According to Wikipedia, Encarta's complete English version, Encarta Premium, consists of more than 62 thousand articles, photos and illustrations, music clips, videos, among other things as of 2008, and is available by yearly subscription or by purchase on DVD-ROM or multiple CD-ROMs. Many articles can also be viewed online free of charge, a service supported by advertisements.

The initiation of Encarta by Microsoft was through the purchase of non-exclusive rights to the Funk & Wagnalls Encyclopedia incorporating it into its first edition in 1993. Microsoft also bought Collier's Encyclopedia and New Merit Scholar's Encyclopedia and incorporated them into Encarta. In July 2006, Websters Multimedia, a US subsidiary of London-based Websters International Publishers, took over maintenance of Encarta from Microsoft. The latest version is Encarta Premium 2009, released in August 2008.

Microsoft had reached the pinnacle of business by publishing Encarta on CD-ROMs and packaging copies of it with PCs running its Windows operating system, thus creating a tough time for traditional print publishers like Encyclopaedia Britannica Inc.

Microsoft noted that its vision is that everyone around the world needs to have access to quality education, and we believe that we can use what we've learned and assets we've accrued with offerings like Encarta to develop future technology solutions.

Meanwhile, certain media reports suggested that the decision to cease Encarta websites could be due to lack of sales, in the midst of tremendous growth of Wikipedia, which is coordinated by the nonprofit Wikimedia Foundation, and other free reference sites. Wikipedia is said to be a repository of more than 10 million reference articles produced by volunteers in over 260 languages, including more than 75 thousand active contributors.

Microsoft, in the notice, added that from October 31 onwards, Encarta will no longer be available on MSN Explorer, but all other aspects of MSN Explorer service will be unaffected by this change. Additional information on the Encarta decommission will be posted by the MSN Explorer as it becomes available on Member Center and through direct subscriber communications.

The company also said that MSN Encarta Premium monthly and annual subscribers who have an active subscription as of April 30 will receive a refund to their credit card prorated for any subscription fees paid beyond that date. They will continue to have access to MSN Encarta Premium until the service is discontinued on October 31. Refunds will be issued on April 30, and the credit should be posted to subscribers' credit card account within 2-3 business days.

In addition, the company noted that although the sale of Student and Encarta Premium software will be stooped by June 2009, Microsoft will continue to release updates to current versions of Encarta in the U.S. and international markets through October 2009 and in Japan through December 2009.

Microsoft has not changed its technical support policy for software, and the technical support will be available for Microsoft Student and Encarta Premium for 3 years.

Regarding a question of whether Microsoft will discontinue other education software products, the company said it is not making any other announcements at this time. By changing our product offerings and both adding and discontinuing products, Microsoft looks for ways to deliver the most effective technology offerings to help make teaching and learning more engaging and relevant in the 21st century, the company said.

Last year, Microsoft said it would stop selling OneCare, its consumer antivirus product, while its rival Google Inc. (GOOG) has discontinued Jaiku, Mashup Editor, Dodgeball, Catalog Search, Google Notebook and Print Ads reportedly in response to pressure from the deteriorating economic conditions.

MSFT closed Monday's regular trading session at $17.48, down $0.65 or 3.59%, on a volume of 50 million shares, against a 3-month average volume of 75 million shares. In the past 52 weeks, shares have been trading in a broad range of $14.87 - $32.10.

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