San Francisco - Microsoft on Tuesday announced that it was terminating its Encarta online encyclopedia, as the world's largest software company found it too difficult to compete with the challenge of its collaborative competitor Wikipedia.

Microsoft said it would discontinue all editions of Encarta on October 31, 2009 except for Encarta Japan, which would be discontinued on December 31, 2009.

Encarta was launched in 1993 as a pet project of Microsoft chairman and founder Bill Gates who saw the project as a great way to showcase the power of computers.

A generation of elementary and secondary school students honed their research skills using the Encarta discs that came free with many computers.

While it quickly overshadowed printed encyclopedias, it itself became obsolete following the launch of Wikipedia in which thousands of unpaid volunteers contributed to an online encyclopedia.

According to online tracking firm Hitwise, Wikipedia accounted for over 97 per cent of all online encyclopedic visits in the US in January. Wikipedia says it has over 2 million articles on its site, compared to 68,000 for Encarta.