Blackboard Nears Profits
by Judith Rosen -- Publishers Weekly, 6/3/2002
In dot.com years, Blackboard Inc. in Washington, D.C., one of the leaders in education software, is practically middle-aged. Started by Matthew Pittinsky and Michael Chasen in 1997, the five-year-old firm anticipates becoming profitable late this year.
"In the third quarter of 2002, we'll be profitable," said Blackboard chairman Pittinsky. "Revenue will go to $70 million." According to recently released figures for fiscal year 2001, the company's revenues increased 291% last year to reach $46.5 million, a figure that makes Blackboard one of the largest online course management systems in the post-secondary school market. Its client base of universities, colleges and el-hi school systems is close to 2,400 schools in 45 countries, which translates into 5.6 million users. Some associations, corporations and commercial education providers also use Blackboard courses and/or its portal.
In part, Blackboard's rapid growth has been fueled by strategic partnerships with publishers, including Pearson Education, one of the company's early investors, as well as Elsevier and Thomson. Thomson will offer what Blackboard calls "course cartridges," or supplemental textbook content in digital form that is available through institution-run Blackboard Web sites. Currently Blackboard offers 1,100 distinct cartridges, with new ones being added monthly. Both Pearson and Elsevier already offer cartridges and will license Blackboard's technology to become online course providers themselves.
But Blackboard is not the only firm to prosper as universities add online components to their course offerings. "We and our competitors have seen massive adoptions," said Pittinsky. "It's almost to the point that there's an equal amount of digital content. All the major publishers are filling in that void, either because they don't want to lose a sale or to protect a sale."
The flip side of prosperity is that digital course providers are undergoing a shakeout. "What you're seeing," said Pittinsky "is that publishers want to partner with one or two companies that can deliver 60%–70% of the universities."
In order to insure market share going forward, Blackboard acquired the Prometheus software package developed by George Washington University early this year.
