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  • YouTube, WebEx and Blackboard

    By Joshua Kim December 13, 2010 4:15 am EST

    Acquiring Blackboard would make strategic sense for Google, Microsoft or Cisco.

    Price matters, and Blackboard is expensive at a market capitalization of $1.46 billion. But if the acquisition makes good strategic sense, the price over the long-run (a few hundred million here, a few hundred million there) makes little difference.

    Google is sitting on $33 billion in cash and short term investments, Microsoft $43 billion, and Cisco $39 billion. They can each easily afford to make a major bet on higher ed, and buying Blackboard would be the fastest way to enter this market in a big way.

    YouTube cost Google $1.65 billion in in 2006. WebEx came with a $3.2 billion price tag for Cisco in 2007. Looking at Microsoft's acquisitions, I'm surprised by how reluctant Redmond has been to make any big moves. Compared to Cisco, Google (or Oracle), Microsoft doesn't appear to have an appetite for large purchases.

    Blackboard makes sense for Google, Microsoft or Cisco if you believe that the worldwide postsecondary education market is set for exponential growth (as I do).

    Today, the higher ed story is Western, place-based, face-to-face, and largely state funded. The story of 21st century higher ed will be global, technologically mediated, distributed, mobile, and market driven. Blackboard would be one piece of the puzzle to becoming an education focused company.

    Google, Cisco and Microsoft each have the scale, technological infrastructure and worldwide reach to be major players in the education market over the next 40 years. What they lack is not only a learning management platform (that is just software), but deep experience in partnering with the academic side of institutions and a culture of aligned with the business of teaching and learning. Cisco and Microsoft know CIOs, Google knows students, but none of these companies is as integrated into the day-to-day business of creating and delivering courses as Blackboard.

    You might be critical of Blackboard's software, but the shortcomings in the platform should be balanced against the company's long history of building relationships with schools and software partners. Google, Microsoft and Cisco already do a great deal of business in higher ed, and although each would position an LMS differently, the ability to offer a learning management system would both complement their current product lines and services and offer new avenues for growth and expansion.

    Most big acquisitions are eventually seen as mistakes. Think Time Warner and AOL; Mercedes and Chrysler; eBay and Skype; Sprint and Nextel; HP and Compaq - all of them bad (okay - maybe HP had done okay - but I don't get it).

    Blackboard represents an opportunity.

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Comments on YouTube, WebEx and Blackboard

  • Posted by Tim Roberts on December 13, 2010 at 6:30am EST
  • "You might be critical of Blackboard's software, but the shortcomings in the platform should be balanced against the company's long history of building relationships with schools and software partners."

    Ok? I would argue that it is their relationship building skills that need the most work. Anyone close to this industry knows that Bb is in big trouble with their renewals, with a substantial part of their customer base moving to alternatives. Why buy a product and company that clients are walking away from? Google or MS could build a better platform from scratch for far less than it would cost to buy Bb.
  • Posted by Tim on December 13, 2010 at 6:30am EST
  • BTW Mr Kim. Why are you beating this horse to death? I mean how many blog posts about Blackboard getting bought can you possibly write?
  • Posted by Steve Foerster , adjunct IT instructor at a Midwestern community college on December 13, 2010 at 7:45am EST
  • Everyone seems to agree that Blackboard's software is unremarkable and that the point to buying them would be to buy their customer base. True enough -- but Google is already using a different strategy to shimmy its way into university IT departments: free Google Apps for Education.

    It would make more sense for Google simply to create their own LMS that integrates with the services they already offer, perhaps also taking advantage of the software they wrote for Wave, and including e-textbooks through their new online bookstore. Even if they do have a hell of a lot of it lying around, they don't need to pay money to take on Blackboard's problems.
  • Getting kinda sad
  • Posted by James on December 13, 2010 at 9:30am EST
  • I second Tim's question. Why are you so obsessed with this topic?

    But the main issue is that, other than a tiny bit of vague handwaving about the cost of customer acquisition (which isn't a problem for Google, Microsoft, or Cisco, all of which have healthy and growing higher ed businesses), you have utterly failed to explain why this acquisition would be a good deal for the buyers. OK, maybe the global post-secondary market is about to take off, but is there any real data to show that Blackboard has an advantage there? From what I can tell, Moodle is crushing them in the Pacific Rim and large swaths of EMEA. Cisco has way more presence in East Asia higher ed than Blackboard does, Microsoft sells a lot of Sharepoint to higher ed in Europe, and so on. None of these companies will buy Blackboard at this price. Google and Microsoft probably wouldn't buy it at any price. (Why would Microsoft buy a Java-based product?)

    Let go of this one already.
  • Posted by Bryan Alexander , Senior fellow at NITLE on December 13, 2010 at 11:00am EST
  • I agree with Steve: it makes more sense for Google to keep growing their own set of tools. Gcourses wouldn't be hard to launch. Same for MS w/Sharepoint. Both suites offer much CMS functionality already.

    What might be more desirable for these players is the huge pile of content locked up in BB silos all over the US.

    For Google, that silo nature is probably a deal-breaker. Can G. spider BB content?
  • Posted by Steve Foerster , adjunct IT instructor at a Midwestern community college on December 13, 2010 at 1:45pm EST
  • There probably is some interesting content to be found in spidering various Blackboard installations, but there's also a lot of overlap. If Google did release an LMS, they could achieve something functionally similar by offering course modules that were designed to be used with e-textbooks found specially in their own new e-bookstore. Treeware textbook publishers already do this by offering related Blackboard course modules to instructors.

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