1997: What is World Book's value proposition?

AUDIENCE MEMBER: Good morning, Mr. Buffett and Mr. Munger. This is Nancy Jacobs (PH) from Omaha, a shareholder for about four years now.

Before I leave today, I’m planning to purchase the World Book on CD-ROM for my ten-year-old daughter. And I’d like a few words from either one of you, or both of you, about why I’m making the right choice.

And second, does purchasing World Book over a competitor give her a somewhat improved chance of becoming a brilliant billionaire investor?

WARREN BUFFETT: Practically guarantees it, but go ahead. (Laughter)

AUDIENCE MEMBER: OK. I’m buying, then.

WARREN BUFFETT: Charlie, you want to — you love to talk about World Book.

CHARLIE MUNGER: Well, I think World Book is clearly the class of the field. They have every word in the English language graded for reading comprehensibility, and the articles are cleverly written so the difficulty of comprehension rises slightly as you go through it.

And it’s very user-friendly to young people. And since it’s something you want to encourage, making it user-friendly is wonderful. I also find that with whatever intellect I have, it’s more user-friendly to me. And so I think it’s a hell of a product, either for the young people or the old.

And for a quick reference system, I don’t think there is anything better.

Personally, I like the reading version, being an old-fashioned fellow. And I can hardly imagine a world where the wise people don’t do a lot of reading.

Now, maybe we’re going to have wise people in the future who spend all their time in front of screens in the course of getting that wisdom. But I doubt it. That’s all. (Laughter)

I think you may have bought a wonderful product, but I would have the other one, too. (Laughter)

WARREN BUFFETT: The product you see there was the joint development, and was launched in January of this year in conjunction with IBM. IBM has been our partner in that product. I believe it’s being bundled into all the IBM PCs now being sold. So they’ve worked very well with us. Frankly, there’s a book, even, that deals with this.

Bill Gates did a very good job of developing a product that was bundled with millions and millions and millions of PCs. It’s called Encarta. It’s actually Funk and Wagnalls. He hates it when that comes out, but they changed the name to Encarta, which was smart of him. (Laughter)

And there are a few people in this room who were witness to a demonstration four or five years ago in Bermuda, where in connection with Encarta, they showed the moon and the earth.

And the moon bumped into the earth in this. And I just, I don’t know why it sticks in my mind. I thought I would mention it today, that the — (Laughter)

But his is doing very well. So apparently there are a number of people that don’t care about the fact the moon and the earth collide, but in the World Book the moon and the earth never bump into each other. (Laughter)

He’s done extremely well with Encarta, incidentally. I mean, it was a masterpiece of moving into an area and pushing hard. And you know, I tip my hat to him, but now we’re going to —

CHARLIE MUNGER: Yeah, we copied him.

WARREN BUFFETT: Yeah, we copied him. Right. (Laughter)

OK, Nancy, be sure to buy the print version, too, so Charlie will respect you. (Laughter)