Could News Corp. Scandal Touch Ed. Division?

By Ian Quillen — July 15, 2011 2 min read
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When News Corporation announced its entry into the education industry last fall, some educators criticized the move, fearing an ulterior motive from the world’s second-largest multimedia conglomerate.

Now, with fallout from a cellphone hacking scandal at the News Corp.-owned News of the World in the United Kingdom reaching stateside, it appears concerns over the ethics of the Rupert Murdoch-owned conglomerate could also plague its education businesses, according to a report in the New York Daily News.

According to the report, New York City-based Wireless Generation, the first, and to-date only, company purchased as part of News Corp.'s education venture, could be affected in its endeavors by its association with its parent company, including in a $27-million contract already awarded to Wireless Generation by New York state’s department of education.

That contract for student data software already utilized by some New York City schools could be denied by the state controller based on a state review process that would consider the business ethics of affiliated firms, the story says. Some critics have expressed specific concerns regarding Wireless Generation because it would have access to student data with the contract, and the recent News of the World scandal involved a data breach.

Wireless Generation officials maintained, both in conversations with the Daily News and with Education Week, that the company acts independently of News Corp., and further, that connecting the phone hacking scandal by News of the World about a decade ago and data sharing involving a company acquired in the last nine months was an unreasonable stretch in logic.

Larry Berger, co-founder and chief executive officer of Wireless Generation, also sits on the Board of Directors at Editorial Projects in Education, the nonprofit corporation that publishes Education Week.

For context, a BBC graphic shows the total revenue News Corp. generated in 2010, broken down across various industries—including newspapers, cable news, motion pictures, and other (which is where Wireless Generation would fit).

News Corp. began it’s dive into education last fall by announcing the hiring of outgoing New York City Schools Chancellor Joel Klein, and shortly after purchasing 90 percent of Wireless Generation, an education software company known best for its involvement with School of One, for $360 million.

Before the recent News of the World scandal, the division appeared to be heading toward expansion, with the addition of former Charlotte-Mecklenburg (N.C.) superintendent Peter Gorman, former New York City schools chief operating officer Kristen Kane, and the Startl entrepreneurial support group’s founder Diane Rhoten.

Klein had also told the Financial Times that the company was poised to grow its division through acquisitions. It’s unclear whether that process will be slowed or halted because of the scandal, for which Klein has become an adviser to News Corp. based on his legal background and distance from the situation.

Look to the Digital Education blog and Education Week for more on this situation as it unfolds.

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A version of this news article first appeared in the Digital Education blog.