Blackboard, WebCT combining forces

The top two providers of learning management system (LMS) software and services for higher education, Blackboard Inc. and WebCT Inc., have announced an agreement to merge. The merger would leave the combined entity with more than 80 percent of the LMS market share in higher education, which includes the software platforms that drive online learning. The impending deal has a price tag reported to be approximately $180 million.

Blackboard says the transaction will combine two academic eLearning organizations into a single company with the client base, resources, and expertise to meet the rapidly evolving needs of educators around the world. But the deal also has the potential to squeeze out other LMS providers and reduce competition, some observers fear.

Both companies’ boards of directors have approved the merger. The combined firms will operate under the Blackboard brand. Blackboard President and CEO Michael Chasen will continue to serve in that capacity for the new entity.

The ultimate value of the deal will depend on WebCT’s cash balance at closing. Under terms of the agreement, Blackboard will acquire WebCT in a cash transaction for $180 million, which values the offer at approximately $154 million when considering WebCT’s Aug. 31 cash balance of $26 million.

According to Blackboard, more than 3,700 higher-education, K-12, corporate, government, and commercial academic institutions use solutions offered by the two organizations. A survey done by Market Data Retrieval (MDR), a provider of education market research, found that Blackboard and WebCT held the top two slots in the LMS market for U.S. colleges and universities in 2005. Blackboard held 51 percent of that market, while WebCT held 32 percent.

Another education market research firm, Eduventures Inc., estimates the 2005 eLearning platform market in higher education will reach $220.7 million, a growth rate of 17.9 percent. Eduventures also estimates the 2005 market for K-12 schools to be $136 million, with an expected annual growth rate of 5 percent over the next two years.

“The two companies combined create a powerhouse for the learning management system market, [leaving] a pack of smaller players–and open-source solutions–to jockey for position,” said Catherine Burdt, lead postsecondary analyst at Eduventures.

“This is a dominant market position in higher education … so their real opportunity will be in leveraging digital content and add-on services, as well as strengthening positions in K-12 and international markets,” Burdt said.

Another analyst, John G. Flores of the United States Distance Learning Association, agreed the merger would change the landscape of the eLearning market.

“WebCT and Blackboard both hold dominant positions in the LMS sector of the K-12 and postsecondary education markets. Combining the two companies should bring new services, products, capabilities, and an economy of scale,” said Flores.

“If the merger doesn’t accomplish these goals, other alternatives exist, and I’m sure new ones will be launched,” Flores continued. “The distance-learning industry is always in a dynamic state; hence, the merger should prove successful, if the needs of both WebCT and Blackboard customers are met.”

Tim Wiley, an Eduventures analyst for the K-12 market in the United States, said the numbers for Blackboard and WebCT in K-12 education are not as strong as those in higher education.

“Blackboard’s 2004 revenues from K-12 were $8.9 million, about 7 percent of the total LMS market,” Wiley said. “WebCT’s K-12 revenues are even less, about $2 million.”

But Wiley suggested that the merger of Blackboard and WebCT would lead to a larger K-12 market share for the new entity, because the larger company would have greater flexibility to accommodate the peculiarities of that market.

“Qualitatively, we’ve been saying all along that given the very fragmented nature of the K-12 market–based on geography, policy, customer size, and long sales cycles–consolidation in most market segments, and certainly LMS, is to be expected,” Wiley said.

Despite a more than 80-percent market share in higher education and analysts’ optimistic predictions, Blackboard CEO Chasen dismissed the idea that Blackboard is positioning itself to monopolize K-20 eLearning solutions.

“We’re far from having any sort of monopoly–we don’t have influence at that level. The [K-20] market is so big, and there are so many companies in this space, that there are a lot of competitors out there,” Chasen told an eSchool News reporter. “Certainly, we’re technically the largest [eLearning platform provider] for education [in the United States], but a relatively small piece of the overall market, which includes international education and corporate markets.”

He added: “One of the main reasons behind the acquisition is that WebCT has a great reputation for service and support. Through this merger, we can take some of WebCT’s best practices and really improve the level of service that we’re able to offer our clients.”

Blackboard says it plans to enhance and support both companies’ existing products, while also developing interfaces that will permit the existing product lines of both companies to interoperate with one another and with other applications. Over time, the company says, it will work to incorporate the features and characteristics of the two product lines into a single, standards-based product that incorporates scalable architecture, the use of web services, unparalleled ease of use, and flexible customization features.

“Given the alignment of our visions, technologies, and overall strategies, the combination of our two companies will advance the teaching and learning technology industry, benefiting customers worldwide,” said Carol Vallone, WebCT’s president and chief executive officer.

“The development, support, maintenance, and upgrade of each product line will continue into the foreseeable future,” Vallone said. “Over time–in the next generation of the product–we will bring the two products together. But that’s not going to happen for at least the next couple of years.”

Users of both Blackboard and WebCT are optimistic about what the merger will bring–though some are more cautious than others.

“I have had experience with both companies and view this merger as combining excellence with excellence to advance the eLearning industry,” said Jack Wilson, president of the University of Massachusetts. “I also see this combination as a way to … open the door to new opportunities for collaboration among institutions using different eLearning platforms.”

The University of North Texas, which has the largest number of online courses in the state of Texas, has been a WebCT customer for some time. Philip Turner, the school’s vice provost for learning enhancement, said he hopes the merger will lead to a better product.

“Of course, I think we feel a little scared,” said Turner. “I think that any time you face change in a learning management system when it’s integrated throughout your university, there will be some trepidation. But when you put those two companies together, the possibilities are probably endless.”

LMS software “is absolutely a mission-critical piece of the University of North Texas,” Turner said. The LMS learning environment “is the total university [experience] for 3,000 students that are totally online, and we have 38,000 enrollments that are in classes that use that platform. They use it for discussion, posting syllabi, grade books, and what have you.”

If Blackboard and WebCT do it right, he concluded, the merger “has the potential for some wonderful things. It has the potential to be problematic if they do it wrong. … We’ll certainly be a strong voice in guiding this, we hope, since we’re such a major user.”

Blackboard announced on Oct. 13 it will host two town hall-style information sessions at the higher education conference EDUCAUSE 2005, in Orlando, Fla. The forums will establish an open dialogue between members of the academic community and Blackboard and WebCT CEOs about the planned merger, company officials said.

The meetings are scheduled for the Orange County Convention Center, Room W204A, at 11:40 a.m. on Oct. 19 and at 2:20 p.m. on Oct. 20. Both sessions will be open to the public, the company said.

Blackboard went public last year. The initial public offering of its stock sold at $14 per share and reportedly raised $75 million. At market close on Oct. 13, shares of the stock–which trades on the Nasdaq under the ticker symbol BBBB–were up, closing at $23.71. WebCT is a privately held company.

Links:

Blackboard Inc.
http://www.blackboard.com

WebCT Inc.
http://www.webct.com

Eduventures Inc.
http://www.eduventures.com

Market Data Retrieval
http://www.schooldata.com

United States Distance Learning Association
http://www.usdla.org

University of Massachusetts
http://www.umass.edu

University of North Texas
http://www.unt.edu

EDUCAUSE
http://www.educause.edu/

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Former Ed Sec. Bennett resigns from K12 Inc.

William J. Bennett, former Education Secretary under President Reagan, has stepped down as chairman of virtual schooling provider K12 Inc. amid heavy criticism of remarks he made on his daily radio show last month.

Bennett’s comments on his show, “Morning in America,” came in response to a caller’s question regarding a recent book that suggested an increase in the abortion rate has helped reduce the crime rate.

Bennett said: “I do know that it’s true that if you wanted to reduce crime, you could, if that were your sole purpose, you could abort every black baby in this country, and your crime rate would go down.”

Bennett, who is an abortion opponent, went on to say that such abortions would be “an impossible, ridiculous, and morally reprehensible thing to do, but your crime rate would go down. So these far-out, these far-reaching, extensive extrapolations are, I think, tricky.”

In response to a backlash from many K12 customers, including Philadelphia schools chief Paul Vallas, Bennett resigned from the company’s board on Oct. 3.

“Given the controversy surrounding the remarks I made on my radio show, I am stepping down from my positions at K12, so that neither the mission of the company, nor its children, are affected, distracted, or harmed in any way,” Bennett said in a written statement. He has said all along that his comments were taken out of context by the news media and his critics.

Bennett co-founded the McLean, Va.-based K12 in 1999. The company runs virtual charter schools in at least eight states and the District of Columbia, and it provides curriculum services to more than 70,000 students in a variety of learning environments, including traditional public school classrooms, virtual schools, and home schools, according to its web site.

K12 Inc. said it has no relationship with, or involvement in, Bennett’s radio program. The opinions expressed by Bennett on his show are his alone, it said.

Links:

K12 Inc.
http://www.k12.com

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New iPods can hold 150 hours of video

cNEt’s News.com reports on Apple’s release of a new video iPod, new iMac, and updated version of the iTunes music store. The new iPod music player, which has a 2.5-inch screen, will retail for $299 or $399 and can hold more than 150 hours of video.

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Opinion: Unfair Katrina windfall for online ed

In his “On Education” column for The New York Times, Samuel G. Freedman examines U.S. Senate Bill 1715’s provision that would exempt “proprietary” online colleges aiding Hurricane Katrina victims from restrictions in the Higher Education Act that normally prevent them from receiving any federal grant money loaned to students. Normally, a school must prove that no more than 50 percent of its students are enrolled online in order to receive such money. Freedman questions the motives behind this Katrina education relief bill, noting that it could reward a lot of institutions with questionable business practices. (Note: This site requires registration.)

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Game developers build arcade for research

The Athens News of Athens, Ohio, reports that the Games Research and Immersive Technology Lab program at Ohio University will begin testing some of its new educational video games on local students at a new arcade it has set up in Athens. The researchers will use the arcade as a labratory to test the “function and usability of various kinds of computer games and serious games.” Researchers also hope that students taking part in the arcade project will develop a greater interest in studying programming and digital technology.

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Study: Overzealous filters hinder research

The internet-content filters most commonly used by schools block needed, legitimate content more often than not, according to a study by a university librarian. Her report was presented at the American Association of School Librarians (AASL) conference in Pittsburgh last week.

Better communication between technology staff and classroom teachers is the key to ensuring that school and library internet filters, installed as part of a federal effort to protect children from inappropriate online content, do not preclude students from accessing legitimate educational materials, the new study found.

Presented Oct. 8, the study chronicles the difficulties confronted by two educationally diverse groups of English students assigned to conduct term-paper research with filtered internet access in a high school media center.

Using the experiences of this school as a typical example, the study’s author, Lynn Sutton, director of the Z. Smith Reynolds Library at Wake Forest University in North Carolina, finds that internet filters are apt to block legitimate educational content. Tech-savvy students, meanwhile, argue that administrators should have more faith in their judgment and ability to deal with inappropriate content, and they blame the school–not their teachers–for prohibiting them from conducting sound, unbiased research, the report said.

The U.S. Department of Education estimates that 90 percent of K-12 schools today employ some sort of web filtering technology in adherence with guidelines set forth as part of the Children’s Internet Protection Act, the five-year-old law that requires libraries to install filters or surrender federal funding, including eRate discounts on telecommunications services and internet access.

But, based on her findings, filters overstep their bounds in many cases, Sutton says. And, whether teachers simply are too busy to follow up with technology staff to request access to legitimate sites, or–worse–technology staff aren’t responsive enough to the needs of classroom teachers, too often educationally useful sites aren’t removed from these filters’ block lists, despite the ability of administrators to remove them at the local level.

“Even at risk of losing federal funds, school districts should carefully consider whether filtering is necessary–or necessary at all grade levels,” Sutton wrote. “If the decision is made to filter, communication among students, teachers, librarians, and technology administrators is critically important to minimize the negative effects of filtering.”

Sutton, who conducted the study as part of a doctoral dissertation, wrote that students were “frustrated, annoyed, and angry” when blocked by internet filters in their schools, especially when attempting to access content sought in relation to classroom assignments.

As part of the study, Sutton interviewed two distinctly diverse classes of English students: an advanced rhetoric class and a basic composition class. Both had been assigned to conduct term-paper research using internet-connected computers in the school library.

Prohibited through a confidentiality agreement from revealing the name of the school she performed her observations in, Sutton could say only that it was a large suburban institution in Michigan with more than 1,500 students.

In almost all instances, she said, students experienced both “underblocking” and “overblocking” of online content. Underblocking, explained Sutton, is when inappropriate content somehow sneaks past the school’s web filter. Overblocking is when legitimate educational content is blocked because it is deemed inappropriate by the technology.

“The majority of students felt that the school’s internet filter hindered their work in doing internet research for their papers,” Sutton wrote in her report.

In interviews conducted during her stint with the advanced rhetoric class, Sutton said, 12 of 14 students complained that the filters presented “a hindrance to their research.”

“Students were upset that they weren’t being given enough credit for how to handle these types of things,” added Sutton, who said she received a similar response from students in the lower-level composition course.

In many cases, she said, students told her that much of the content they’re prohibited from viewing in school they encounter in their daily lives, either at home or elsewhere. What’s more, she found, when students can’t access the information they need, many of them are savvy enough to get around the protections.

“Students in the study were adept at getting around the filters,” she pointed out.

When confronted with a blocked web site, she said, students confessed to a number of tactics for getting to the content anyway. Depending on the technology, she said, students simply switched web browsers, changed their browser settings–or even waited until they got home to conduct their research.

“They would say, ‘Why am I even doing this here?'” said Sutton. For students who have computers at home, she explained, sometimes it’s just easier to find what they need online when the filters aren’t an impediment to what they perceive as their academic freedom.

For students who don’t have online access from home–or some other venue outside of school–the problem is more severe, she said.

“When you have a digital divide, some kids only have filtered access from school on a wide variety of issues”–from abortion, to sex education, to world history, Sutton explained, citing a common criticism of internet filtering. “The real problem,” she added, “is that the school is only letting through one view of society that the school deems appropriate for children to see. And that … is discrimination.”

But that doesn’t mean filters are useless, she said.

On the contrary, Sutton said, students in the basic composition course, while annoyed with the filters, also agreed they were necessary. In fact, eight of 13 students told her that despite the hindrance presented by web filters, the technology itself was needed to protect schools from the liabilities associated with allowing students to view inappropriate content, including online pornography and other lewd materials, while at school.

Instead, the problem seems to lie in how the technology is administered and applied.

It’s a problem she attributes mainly to a lack of communication between administrators and busy classroom teachers, many of whom, she said, don’t take enough time to understand how the filters work. In many cases, she said, teachers simply accept the technology as an inconvenience and don’t actively work to solve the problem, which can be done to some degree merely by adjusting the filter settings.

“There was a significant disconnect between the district’s technology administrators and the classroom, which resulted in an undercurrent of frustration and hopelessness at effecting change,” Sutton wrote in her report.

During interviews with school technology staff, Sutton said, it became clear that a major problem with school-installed web filters isn’t the technology itself, which can be adjusted, but rather that the school technology director often is not informed of the challenges faced in the classroom.

Too often, “the technology director just installs the filter,” she said. “He isn’t aware of the problems people are having. And no one ever tells him.”

Aside from working with technology staff to adjust the filter settings so more relevant content gets through, Sutton suggested that teachers and administrators also poll their students for advice.

Students, she noted, are full of ideas. The students she interviewed for her report suggested that administrators and teachers work together to devise different filter settings for different age groups of students; that they use a filter for a trial period before purchasing it to make sure that it fits the needs of the school; that they consider installing pop-up blockers as an alternative to constrictive filtering devices; and that administrators consider giving teachers and librarians more control over the filters, perhaps allowing them to turn the devices on and off based on the nature of the project and the level of supervision afforded each individual student.

In then end, Sutton said, it’s up to school leaders to decide “whether the filter is creating more harm than good.”

Links:

American Association of School Librarians
http://www.ala.org/ala/aasl/aaslindex.htm

American Library Association
http://www.ala.org

Z. Smith Reynolds Library
http://www.wfu.edu/Library/

U.S. Department of Education
http://www.ed.gov

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Content filters a boon to repressive regimes

The New York Times reports that many Western companies are supplying internet filtering technologies to repressive regimes determined to control what citizens in their countries are able to see online. Human rights groups are alarmed by this trend, which includes efforts by major U.S. companies to help the Chinese government restrict internet usage. (Note: This site requires registration.)

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Newspaper asks voters to back ed-tech goals

In a strongly worded opinion piece, the Connecticut Post of Bridgeport, Conn., urges voters from Shelton, Conn., to approve a $2.5 million referendum that would bring hundreds of computers into Shelton’s classrooms. The vote, scheduled for Nov. 8, aims to improve the state’s lowest student-to-computer ratio of only one computer for every seven students. That ratio falls below both federal and state mandates.

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Online dictionary helps define good research

With more than 100 million visitors to its site since 2003, TheFreeDictionary.com has developed a reputation as a multifaceted, virtual research hub for students and teachers. Not only can visitors use this free web site to look up words–it features more than 1 million entries for words in general use–but they also can access a virtual encyclopedia, thesaurus, and reference guide, among other tools. Students and teachers can use the site’s flagship interactive dictionary feature to look up definitions, synonyms, antonyms, and usage examples from classic literature, as well as audio/phonetic pronunciation guides and word etymologies. The site also includes repositories for more obscure terms, including those specific to the medical, legal, and computer professions, as well as thousands of photos and diagrams. All information is either assembled by the site’s editorial staff or obtained from other recognized, premier reference sources, developers said. “Most dictionary sites just ‘dump’ information onto a page. We decided to make our web site not only the most comprehensive, but also the most organized and intuitive of all the dictionary sites,” said Nick Simonov, president of Farlex Inc., the parent company of TheFreeDictionary.com. The idea, according to Simonov, is to provide every student and teacher who visits the site with “an array of information that paints a rich, complete picture of the entry in question.”

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