Wednesday, October 24, 2001

3 Companies That Sell Course Software Say They Are Raking in Money By MICHAEL ARNONE Arlington, Va. The top three providers of course-management software -- Blackboard, eCollege, and WebCT -- will see their first profits next year, their chief officers announced Tuesday. Blackboard saw its first positive cash flow in September, said Matthew S. Pittinsky, the company's chairman. Oakleigh Thorne, eCollege's chairman and chief executive officer, said the company expects to be in the black in the first quarter of next year. WebCT forecasts it will turn a profit sometime next year, said Peter Segall, the executive vice president for information and management practice at the company. The three companies say they are raking in money and customers at a time when capital investment in online education has plummeted and many companies have either merged or folded entirely. Consolidation in the industry has led to profitability for a few top companies that have a critical mass of market share. The men spoke at a forum on platforms for managing online courses during the Online Universities Conference, which began here Monday and ends today. Mr. Pittinsky credited the sales surge to more institutions' buying and upgrading their Blackboard systems for the start of the new academic year. Because of that seasonal rise and fall of buying activity, Blackboard will post financial losses for October and November, but he expects the company to see positive cash flow again in December and become profitable by the middle of next year. Mr. Thorne, of eCollege, said that company is "almost at the break-even point." From 2000 to 2001, eCollege saw an 80-percent increase in sales to its top 30 customers, Mr. Thorne said. Blackboard and eCollege reported their financial results Monday for the third quarter of 2001. Blackboard posted $15-million in revenues for the quarter, a 324-percent increase over the same period last year and $1.5-million more than in the second quarter. Officials of eCollege saw a 42-percent increase in revenue over last year's third quarter, to $5.5-million, and saw its net loss decrease by 74 percent, to $2.4-million. WebCT expects to be profitable next year because it has matched all expectations for sales, revenue, and deferred revenue for the past year, Mr. Segall said. The company enjoyed a 314-percent increase in sales and saw its customer base rise to 2,265 institutions from 1,544, a 47-percent increase. The company has sold 150 of its new campus servers, exceeding its goal so far for the year. Each server costs more than $40,000. The only publicly traded company of the three, eCollege, released all of its financial data. Blackboard and WebCT, which are privately held, released limited data. WebCT declined to give exact figures for its financial results. Easy-to-print version E-mail this article

Tuition increases at public and private colleges are largest in years, survey reports University group discusses earmarks again, but reaches no agreement MacArthur Foundation names 23 as fellows for 2001 NCAA edges closer to paring several division I-A members Harvard U. will make professors justify their approach to grading Report calls for new efforts to halt academic brain drain from Africa Court orders Web company to name professor behind "Truth at ULM" site Colleges turn to bandwidth "shapers" to throttle needless use 3 companies that sell course software say they are raking in money