Education Inc.

Makers of Online Systems Merge

Blackboard buys up rival in course-handling market.

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The educational software company Blackboard Inc. announced its acquisition of its biggest rival last week, giving it the lion’s share of the market for online management of higher education courses.

Besides being widely used in colleges, Blackboard’s online course-management system is used in an estimated 1,200 school districts nationwide. Blackboard allows teachers to post their course materials on the Internet, including homework assignments, syllabuses, and other resources. Teachers and students can also communicate online through the system.

Based in Washington, the company is buying Lynnfield, Mass.-based WebCT for $180 million. Blackboard will absorb WebCT’s 1,480 institutional customers, 274 employees, and about $26 million in cash.

WebCT controls 27 percent of the higher education market for the online management of courses, compared with Blackboard’s estimated 54 percent of the market. So the deal will give Blackboard more than 80 percent of that market, according to analysts.

The effect of the merger on the K-12 market is likely to be more muted, said Timothy Wiley, an analyst for Eduventures Inc., a Boston-based market-research firm that tracks business activity in education.

He noted that only 8 percent of Blackboard’s revenues last year came from the K-12 market. That market, composed of some 14,500 school districts spread across the country, is very fragmented, he said.

“It’s not going to create the same waves as in the postsecondary market,” Mr. Wiley said.

However, Patrick M. Supanc, the senior director of K-12 markets for Blackboard, said that elementary and secondary education has been the fastest-growing client segment for the company for the past two years.

Vol. 25, Issue 09, Page 8

Published in Print: October 26, 2005, as Makers of Online Systems Merge

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