The times they are a-changin': Pearson buys Connections Education for $400 million
As if the world needed further evidence that online learning is getting bigger by the day, on Thursday, UK-based educational products publisher Pearson PLC dropped $400 million to buy Maryland-based online learning provider Connections Education.
For those who follow education news and online education news in particular, this is a big deal.
Connections Education operates – often in partnership with the state’s department of education or a more specific bureau – 23 public online schools in 21 states, and one national private online high school as well. Connections’ schools boast more than 40,000 students this school year and they expect to earn approximately $190 million in revenue in 2011.
Open Education Solutions CEO Tom Vander Ark, who has ties to both companies, broke down what it all means in depth. But there was one point I thought was particularly salient.
The shift to personal digital learning is happening faster than most observers suggest--we're riding an exponential curve not a straight line. Pearson gets that and has been very thoughtful about managing the Innovator's Dilemma.
At this point, there really shouldn’t be any doubt. Personalized online learning is coming, and no matter how hard traditionalists and skeptics try to push back, it is going to play a huge role in shaping the future of education.
Michael Horn, cofounder of educational think tank Innosight Institute and one of the Sloan Consortium’s ten most influential people in online education pretty much confirms it in his take on the acquisition for Forbes.
But Horn also raises an important point about the issues Pearson faces as one of the industry’s leaders:
The challenge for Pearson now is can they manage the “innovator’s dilemma” properly and maintain their leadership in this industry, or will they have acquired a disruptive company only to let the mainstream business take its assets and kill its distinctive processes and priorities.
To put that in laymen’s terms, Pearson needs to make sure it balances its business interests with the educational innovation and success they trumpet so loudly.
This will be the most critical issue Pearson faces in the near future and, just a few days after the acquisition announcement, there was evidence of how difficult this balancing act will be.
On Sunday, The New York Times wrote about Pearson’s non-profit arm providing cushy trips to State Education Commissioners in states that have large business contracts with Pearson.
Pearson is now in a unique position to become one of the world’s most comprehensive learning companies, and to help shatter the negative connotation for-profit online learning still carries. But they need to make sure they wield that power responsibly.