Educational technology experts say the purchase of ed-tech company Wireless Generation by media mogul Rupert Murdoch’s News Corp. raises questions about how effective the partnership will be over the long haul, but they hope the Nov. 22 announcement inspires further large-scale private investment in the K-12 technology market.
They say the deal—in which News Corp. bought 90 percent of New York City-based Wireless Generation for $360 million—is far from a certain success. While the media conglomerate’s expansive resources may be unparalleled within the relatively small ed-tech business sphere, News Corp. may find it challenging to define its footprint in that world—perhaps one of the reasons it also recently announced the hiring of outgoing New York City Schools Chancellor Joel I. Klein as an executive vice president in the office of the chairman, where he is expected to help oversee educational endeavors.
Further, observers say, the longer, slower business cycle that typifies the education market may take some adjustment on the part of the world’s third-largest media company, which counts the 20th Century Fox film company, Fox’s numerous TV enterprises, The Wall Street Journal, the New York Post, and book publisher HarperCollins among its holdings.
Question of Expectations
“It’s a very different business than any of the different businesses they’ve been in,” said Karen Billings, the vice president of the educational division of the Software and Information Industry Association, or SIIA, based in Washington. “Everything is a longer cycle. If they’re expecting revenue or profits over a traditionally shorter time cycle to satisfy investors, it’s going to be difficult to do.”
In addition, the widespread perception of News Corp. as conservative in its political sympathies—with its ownership of such outlets as the Fox News Channel—combined with the for-profit nature of its new education endeavors may make building trust with many educators harder than it’s been for the philanthropic ed-tech efforts of Microsoft co-founder Bill Gates and film producer George Lucas, said Mike Lawrence, the executive director of Computer Using Educators, an advocacy group based in Walnut Creek, Calif.
“I would tend to want to see more [investment] from the nonprofit sector,” Mr. Lawrence said. He also suggested that News Corp. could seek partnerships with nonprofit groups.
“I’ve seen private-public partnerships in which nonprofits have been able to partner with companies and do great work,” he said.
For its part, Wireless Generation, which provides software, systems, and services for more than 200,000 educators and 3 million students, according to its website, will operate as an independent subsidiary under News Corp. The company’s current executives, including Chief Executive Officer Larry Berger, will retain a 10 percent share of the company and stay on board to guide its initiatives, such as Wireless Generation’s partnership in the School of One pilot program in New York City that aims to use technology to create personalized learning programs for students.
Mr. Berger serves on the board of trustees of Editorial Projects in Education, the nonprofit corporation that publishes Education Week.
Whether News Corp. expands its ed-tech reach, either by purchasing other companies or absorbing them through Wireless Generation, remains to be seen. If it does, ed-tech experts say, the operation will need to bring in other education figures like Mr. Klein, as well as frontline educators, to gain the trust of people in the field.
“If we’ve seen anything over the past decade, it’s that we don’t see as strong a line between practice and vendor,” said Patrick Riccards, the executive director for communications and public affairs at the American Institutes for Research, in Washington, and the writer of the blog Eduflack. “We see a lot of competitors in the education space really positioned as instructional partners [with educators]. … So when you’re getting to that partner level, there’s no question teachers trust other teachers.”
At the same time, observers say the investment by News Corp. should be taken as a sign that more businesses are seeing financial opportunities in education technology, both because of existing market conditions and because of federal policy promises. President Barack Obama’s pledge to invest in technology throughout all aspects of the administration’s education budget, instead of as a separate budget item, is an encouraging sign for News Corp. and other potential investors, according to Mr. Riccards, even though there is no dollar figure for all proposed federal education technology spending.
In a press release on the purchase of Wireless Generation, Mr. Murdoch, News Corp.’s chairman and CEO, expressed his belief in the potential of the education market. “We see a $500 billion sector in the U.S. alone,” he said, “that is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching.”
‘Different Sort of Space’
Other big-name ventures in the ed-tech sector have been mainly philanthropic, such as those of the Seattle-based Bill & Melinda Gates Foundation, which also provides grant support to Editorial Projects in Education, and the San Rafael, Calif.-based George Lucas Educational Foundation.
But in News Corp.’s for-profit venture, Mr. Lawrence of Computer Using Educators said he sees more of a parallel—albeit an imperfect one—to Silver Spring, Md.-based Discovery Education, a provider of live-streaming educational resources. Discovery Education purchased United Streaming in 2003, and in 2005 hired education champion Hall Davidson, who had experience as a classroom teacher and as a developer of children’s educational programming, to lead several of its partnerships and initiatives.
“They recognized, ‘Hey, we really don’t know this area,’” said Mr. Lawrence, referring to Mr. Klein as the person to provide similar knowledge to his new employer. News Corp.’s education venture, Mr. Lawrence said, “seems like it’s got the right pieces, as long as they understand it’s a different sort of space.”