News Corp. Sells Amplify to Joel Klein, Other Executives
Sale follows layoff of 500 employees
Amplify, the beleaguered digital education division of Rupert Murdoch's News Corp., was sold last week to a team of 11 Amplify executives that includes former New York City Schools Chancellor Joel Klein. The sale happened after massive layoffs within the division.
Larry Berger, whose company Wireless Generation's purchase by News Corp. five years ago had signaled the media giant's move into education, will lead Amplify as CEO under the new ownership.
The management team buying the education division was supported in the purchase by a group of private investors, according to a News Corp. announcement, which did not reveal terms of the sale. In August, News Corp. indicated that it had written off $371 million in losses from Amplify over the past year, and planned to put it up for sale.
News Corp. has invested $1 billion in the education division since 2010.
The two Amplify Education businesses conveyed in the sale were Amplify Learning, which provides core curriculum in a variety of subjects for K-12, and Amplify Insight, which provides analytics, data, and assessment. The failed Amplify Access, which sold tablet computers with a "K-12 learning system," has been discontinued, but the company will still support its ongoing project in the Guilford County, N.C., schools.
Berger has been serving as the CEO of Amplify Learning. Klein, the former Amplify Education CEO, will be moving to the new company's board of directors, according to an email that Berger sent to staff members Sept. 30, the day the sale closed. (Berger served as a board member of Editorial Projects in Education, the nonprofit corporation that publishes Education Week, from 2009 to July 2015.)
About 500 Amplify employees were laid off last week, although the company indicated that many are staying through part of a four-month transition. Berger referred to the layoffs in his email to the staff, saying the decision to "let some of our colleagues go" was necessary "in order to focus our resources and attention."
At its peak, Amplify had up to 1,200 people on its full- and part-time payroll, or acting as contractors, a former Amplify employee said.
Market Lessons Learned
Berger credited Klein with providing Amplify's vision of combining curriculum, analytics, and software, and helping to plan for the buyout. Klein will play a key role in providing "critical strategic advice," according to Berger's email to the staff.
Klein's vision for News Corp.'s involvement in education coincided with the Murdoch-led company's purchase of Wireless Generation for $360 million in 2010.
Co-founded by Berger, Wireless Generation represented the first leg of what was to become a three-pronged approach to providing digital education products and services through Amplify. Klein planned to leverage Wireless Generation's established assessment and analytics business, which had 400 employees when that company was acquired.
The Amplify sale last week represents a vote of confidence by the original leadership team, said Doug Levin, a consultant on the ed-tech market and a former head of the State Educational Technology Directors Association.
Levin had said earlier this year that News Corp.'s foray into the K-12 marketplace was another example in "a long history of education entrepreneurs who have crashed on the rocks because the market was not what they thought it would be."
But he views this latest development as a sign that members of the management team are willing to "put their money where their mouths are. "They did a lot of work in digital instructional materials," Levin said, and received some positive reviews. He pointed to two products, in particular, that have gained some traction: Amplify's gamification for middle school English and development of an Advanced Placement computer science MOOC (or massive, open online course) that Amplify released in 2013 and sold this August as Edhesive.
Berger, in his email to the staff, said he was "proud of the technology we've invented, the educational innovations we've pioneered, and the results we've delivered—and most importantly, of the team we've assembled."
"Larry Berger has been successful building a company in the past, and the industry and customers both benefited from his vision and implementation," said Karen Billings, the vice president and managing director for the Education Technology Industry Network of the Software & Information Industry Association. "And he knows what mistakes not to make in this go-around."
Vol. 35, Issue 07, Page 9