Big Investments Being Made in Online Education

Investing in online education has become big business. Since the beginning of September, news reports have surfaced of $5.7 million in venture capital going to a Chicago-based education startup called eSpark Learning. At the same time, the Canadian firm Desire2Learn reversed its strategy of not using external funding and raised $80 million.

eSpark, described by its founder and CEO as the Pandora radio for education, targets students in grades K-8. Students are given a custom playlist of apps and then asked to rate how much they like the app or how much they are learning, similar to the way Pandora listeners rate songs played, according to an article in TechCrunch.

Desire2Learn, which develops cloud-based learning systems, changed its funding strategy, in part, to keep up with the rapid pace of change in the online learning market. Blended learning programs, personalized learning, and open online courses have all contributed to that growth. Desire2Learn has responded by hiring 200 new employees in the past year, according to a report in Reuters.

Finally, the online educational startup Straighterline recently announced it will begin allowing college professors to attract online students to their for-credit courses through Straighterline and even set their own price for the course.

The company landed $10 million in investment capital last April and plans to use the funds to expand its marketing to institutions across the country. It already offers online learning in nearly 40 courses for a fee of $99 a month and a $39-per-course registration fee. Its long-term goal is to create a platform where students can pick and choose courses created by professors for credit.

“The idea is the student has those choices,” Burck Smith, founder of Straighterline, told The Baltimore Sun. “It’s really an experiment in creating a market for professors and students to meet up.”

Apple Keeps Grip on App Store Purchases

The New York Times’ report that Apple declined to approve the Sony Reader e-book app because in-app sales wouldn’t go through Apple sparked much hand-wringing in tech circles. Many felt Apple’s move would encompass not only the Sony Reader app, but also Kindle and Nook apps for the iPad, iPhone, and the iPod touch.

Then, blogger John Paczkowski of the Wall Street Journal reported an official statement from Apple claiming no change has been made to its guidelines for developers, but that it will now require apps to offer customers the ability to purchase items both outside the app and within the app.

The change is already in place for customers who buy through iTunes, allowing Apple to earn a cut for facilitating the purchase without forcing all content to be bought through iTunes. This means Amazon, for instance, can still sell content through its web site or Kindle device, but iOS Kindle app users will have to sync purchases to their iPhone, iPod touch, or iPad and Apple will get a cut of the proceeds.

The question now is how will Amazon, Barnes & Noble, and Sony respond? It’d be hard for a company such as Amazon to back away from the iOS platform now, particularly with its “Buy Once, Read Everywhere” promotional campaign. It would also be difficult to build a new sales site that allows customers to buy both from Apple and Amazon, or from Apple alone.

Sony posted a note on its web site saying it’s trying to find other ways to work with Apple, including avoiding the App Store commission altogether.

XanEdu and NYU Stern School of Business to conduct iPad pilot

According to a recent press release, XanEdu, provider of custom coursepacks and textbooks, has partnered with the NYU Stern School of Business to conduct a program-wide iPad pilot for MBA students. Instructors at the university will use XanEdu’s system to publish course materials that students can access on the iPads. The course materials will include digital note taking capabilities and collaboration tools. Throughout the pilot, students will be asked to provide feedback to help determine if the iPad app meets the needs of the students.