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Educational technology experts say the purchase of ed-tech company by media mogul Rupert Murdoch鈥檚 News Corp. raises questions about how effective the partnership will be over the long haul, but they hope the inspires further large-scale private investment in the K-12 technology market.
They say the deal鈥攊n which bought 90 percent of New York City-based Wireless Generation for $360 million鈥攊s far from a certain success. While the media conglomerate鈥檚 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鈥攑erhaps 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鈥檚 third-largest media company, which counts the 20th Century Fox film company, Fox鈥檚 numerous TV enterprises, The Wall Street Journal, the New York Post, and book publisher HarperCollins among its holdings.
Question of Expectations
鈥淚t鈥檚 a very different business than any of the different businesses they鈥檝e been in,鈥� said Karen Billings, the vice president of the educational division of the Software and Information Industry Association, or SIIA, based in Washington. 鈥淓verything is a longer cycle. If they鈥檙e expecting revenue or profits over a traditionally shorter time cycle to satisfy investors, it鈥檚 going to be difficult to do.鈥�
In addition, the widespread perception of News Corp. as conservative in its political sympathies鈥攚ith its ownership of such outlets as the Fox News Channel鈥攃ombined with the for-profit nature of its new education endeavors may make building trust with many educators harder than it鈥檚 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 , an advocacy group based in Walnut Creek, Calif.
鈥淚 would tend to want to see more [investment] from the nonprofit sector,鈥� Mr. Lawrence said. He also suggested that News Corp. could seek partnerships with nonprofit groups.
鈥淚鈥檝e seen private-public partnerships in which nonprofits have been able to partner with companies and do great work,鈥� he said.
Opportunities Seen
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鈥檚 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鈥檚 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 91直播 in Education, the nonprofit corporation that publishes 91直播.
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.
鈥淚f we鈥檝e seen anything over the past decade, it鈥檚 that we don鈥檛 see as strong a line between practice and vendor,鈥� 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 . 鈥淲e see a lot of competitors in the education space really positioned as instructional partners [with educators]. 鈥� So when you鈥檙e getting to that partner level, there鈥檚 no question teachers trust other teachers.鈥�
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鈥檚 pledge to invest in technology throughout all aspects of the administration鈥檚 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.鈥檚 chairman and CEO, expressed his belief in the potential of the education market. 鈥淲e see a $500 billion sector in the U.S. alone,鈥� he said, 鈥渢hat is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching.鈥�
鈥楧ifferent Sort of Space鈥�
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 91直播 in Education, and the San Rafael, Calif.-based George Lucas Educational Foundation.
But in News Corp.鈥檚 for-profit venture, Mr. Lawrence of Computer Using Educators said he sees more of a parallel鈥攁lbeit an imperfect one鈥攖o 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鈥檚 educational programming, to lead several of its partnerships and initiatives.
鈥淭hey recognized, 鈥楬ey, we really don鈥檛 know this area,鈥欌�� said Mr. Lawrence, referring to Mr. Klein as the person to provide similar knowledge to his new employer. News Corp.鈥檚 education venture, Mr. Lawrence said, 鈥渟eems like it鈥檚 got the right pieces, as long as they understand it鈥檚 a different sort of space.鈥�
