News Corp., which recently hired outgoing New York City Public Schools Chancellor Joel Klein, has reached a deal to buy educational technology firm Wireless Generation for $360 million in cash in what observers see as the first of many moves into the ed-tech market for Rupert Murdoch’s media giant.
News Corp., which owns the controversial Fox News cable network, is buying a 90-percent stake in Wireless Generation, while founder and CEO Larry Berger, Chief Operating Officer Josh Reibel, and Chief Product Officer Laurence Holt will split the remaining 10 percent and will continue to manage the company.
Privately held Wireless Generation, which is based in Brooklyn, N.Y., provides mobile and web software, data systems, and professional services that enable teachers to use data to assess student progress and deliver individualized instruction. It was launched in 2000 and counts more than 200,000 teachers and 3 million students across the country as users, News Corp. said.
“When it comes to K through 12 education, we see a $500 billion sector in the U.S. alone that is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching,” said Murdoch, News Corp.’s CEO, in a statement. “Wireless Generation is at the forefront of individualized, technology-based learning that is poised to revolutionize public education for a new generation of students.”
Wireless Generation also builds large-scale data systems that centralize student data, give educators and parents more visibility into the learning process, and foster professional communities of educators with social networking tools. The company is a key partner to New York City’s Department of Education on its Achievement Reporting and Innovation System (ARIS), as well as on the city’s School of One initiative.
News Corp. said in November that it was hiring Klein to help it find education startups to invest in, particularly those that use technology to improve instruction. Klein, who starts with News Corp. in January, will occupy a newly created position as executive vice president and office of the chairman, and he will report to Murdoch directly.
The move has led some education observers to wonder if other large enterprises will turn their eyes—and open their wallets—to the educational technology industry as well.
“It’s very interesting. And in a way, not surprising,” said Kathy Mickey, a senior education analyst with Simba Information. Mickey said companies in other industries have owned parts of educational technology firms, or entire ed-tech businesses, for quite some time, although it doesn’t happen very frequently.
“I think what Mr. Murdoch is doing is going after services and tools,” she said, noting that education company Pearson has done the same on a large scale in recent years and is likely to follow the acquisition of Wireless Generation very closely.
The move is likely a signal that News Corp. will focus largely on mobile technology and the delivery platforms it offers, Mickey said.
“I think the main point is the way education will be delivered,” she added. “I think the emphasis for News Corp. will probably be on tools, resources, and services rather than content. I would not be surprised to see Mr. Murdoch buy a content company, but I think what’s happening is that we’re looking at the way learning is done and how to help schools get to their desired level of student achievement, so you’re talking about a process. And if you’re talking about that, you’re talking about the kinds of resources that technology can help very well.”
Industry insiders have speculated that News Corp.’s purchase of a company that produces mobile technology for education also might be linked to Murdoch’s $30 million investment in The Daily, a subscription-based digital newspaper designed specifically for tablets, including Apple’s iPad.
The New Zealand Herald reported that “News Corp is creating a subscription news product for the iPad called The Daily that will cover national general interest news, according to two sources.”
The Daily is expected to be launched in early 2011, and industry insiders and blogs are reporting that it will have a $0.99-per-week subscription rate.
The Financial Times reported that investments in educational technology initiatives are increasing, despite strained school budgets, and that News Corp.’s purchase will place the company on a playing field with larger, more established education publishing companies—many of which, like News Corp., are looking toward mobile solutions as alternatives to clunky school textbooks. http://www.ft.com/cms/s/0/f9260e1a-f6b7-11df-b434-00144feab49a.html#axzz16yzCj6QG