Opinion
Money & Finance Opinion

What DeVry’s Entry into Online High Schools Means for Virtual EMO K12

October 20, 2007 1 min read
  • Save to favorites
  • Print

DeVry Inc., a publicly held firm you probably associate with television ads for adult technical education, is coming to public schooling. Today it signed an agreement to acquire Advanced Academics Inc., a venture-backed provider of online education for high school. AAI’s clients include virtual high schools formed by school districts and as charters as well as traditional “bricks and mortar” public schools who employ online courses to supplement their own teaching and learning capacity.

I bring this transaction to readers’ attention because of previous edbizbuzz postings about “virtual EMO” (Education Management Organization) K12’s proposed initial public offering, an opportunity I have not embraced. On the one hand, DeVry’s entry into the market says that at least one investor believes online public education is something to consider, so maybe K12 is worth looking into. I don’t disagree. My view is that on review K12 is a risky investment, for reasons stated earlier.

One of those reasons was that others will enter a market in a service that is becoming commoditized. Public education doesn’t need the “turnkey solution” to online education it required even five years ago. More important, it will need it much less five years from now.

State education agencies in particular are setting up their own online activities and seeking courses, professional support and technical infrastructure. Like the bricks and mortar EMOs, the virtual EMO is only a contractor who can be replaced. As it builds capacity in its public school partner, it necessarily looses bargaining power to its client. Lots of providers can offer something that goes into an online school, and administrators are moving towards becoming their own general contractors. My own work listing RFPs weekly for several years through K-12Leads and Youth Service Markets Report leads me to argue that this car is fast being cut up for parts.

A second reason was that more powerful providers would find the market attractive and reap whatever benefits may have been created by K12’s “first mover” efforts. DeVry’s acquisition of AAI is presented as evidence.

Investing now in DeVry is to invest in a firm that has diversified its risks - and just maybe added to the pipeline for its post-secondary students. Investing in K12 is to make a bet on a firm that’s placed all its eggs in one basket.

Related Tags:
Funding/Budgets

The opinions expressed in edbizbuzz are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Data Webinar
Education Insights with Actionable Data to Create More Personalized Engagement
The world has changed during this time of pandemic learning, and there is a new challenge faced in education regarding how we effectively utilize the data now available to educators and leaders. In this session
Content provided by Microsoft
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School & District Management Webinar
Accelerate Learning with Project-Based Learning
Earlier this year, the George Lucas Educational Foundation released four new studies highlighting how project-based learning (PBL) helps accelerate student learning—across age groups, multiple disciplines, and different socio-economic statuses. With this year’s emphasis on unfinished
Content provided by SmartLab Learning
School & District Management Live Online Discussion Principal Overload: How to Manage Anxiety, Stress, and Tough Decisions
According to recent surveys, more than 40 percent of principals are considering leaving their jobs. With the pandemic, running a school building has become even more complicated, and principals' workloads continue to grow. If we

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Money & Finance Opinion There Is No Bubble in Educational Technology: Not For Businesses That Actually Make Sense
Many people are wondering whether there is a bubble in educational technology. Has too much venture capital been invested in the sector? Have valuations gotten too high? My answer is that there is a bubble in ideas that won't work and a dearth of capital for ideas that can work.
Matt Greenfield
4 min read
Money & Finance Opinion Nice Test Scores, Can I Buy You?; The Future of Financing Talent
A Company called Fantex recently announced it will be selling stock in football superstar Arian Foster, SEC-approval and all. With this breakthrough, is it only a matter of time before we can invest in the future earnings of promising kindergartners?
Tom Segal
7 min read
Money & Finance Opinion EdTech Titans of Industry: A Reflection
This week marked the second annual EdTech Titans of Industry event in New York City featuring some of the top players in education: Diane Rhoten, Jonathan Harber, Gates Bryant, and George Cigale. Here are some of the highlights..
Tom Segal
3 min read
Money & Finance Opinion Mark it a Ten: Tech Acquirers Enter the World of Education
With the rise of ed-tech over the past few years, we have seen a steady stream of publishers, media companies, and private equity shops acting on the back-end of the venture market as the ultimate acquirers. But we have not seen a major technology company jump on board... until now, with Amazon's purchase of TenMarks
Tom Segal
3 min read