Amazing (but not really unexpected) news today…Blackboard and WebCT will be merging. There will be only one company, called “Blackboard.” Blackboard was already pretty much the de facto monopoly on proprietary CMS’s, but now, by absorbing their only realistic competitor (in terms of numbers), they’re really going to be the Microsoft of CMS.
Will any open source initiative (Sakai, Moodle, anybody?) have any chance at making a breakthrough? Or a breakin?
Here’s the official word, in bonafide, verbatim, corporatese:
We are writing you today to directly communicate some momentous news. Earlier today, WebCT and Blackboard signed a formal agreement expressing our intent to merge our companies.
This decision is one that has been made based on careful consideration by both entities. We believe that this union will have a positive impact on the global e-Learning community and on the individual clients of both companies. We want to communicate the rationale behind the merger and to provide some of the early details on what this news means for you.
By leveraging the best of Blackboard and WebCT, we believe we can improve the online learning experience for educators and students worldwide. As a single company, we will bring together some of the brightest, most experienced talent in the e-Learning industry, and we will be uniquely positioned to share and deliver proven best practices to the combined client base. Most importantly, the combined Blackboard and WebCT community of practice will represent the largest and most comprehensive network of e-Learning practitioners in the world. We will work diligently to bring this community together to broaden access to shared expertise, reusable technologies, faculty and developer networks, and to promote exemplary course programs.
The combined company will continue to develop, innovate, upgrade, improve and support both Blackboardâ€™s and WebCTâ€™s products, WebCT Vista and WebCT Campus Edition, and Blackboard Academic Suite and Blackboard Commerce Suite. Following the merger, the combined company will be actively engaged in industry standards efforts. We will develop common, standards-based APIs, based on Building Blocks and PowerLinks, that will allow the existing product lines to interoperate with one another as well as provide a means for clients of both Blackboard and WebCT to share their applications, innovations and experiences with the global client community. Over time, the combined company will incorporate the best features and usability characteristics from the two product lines into a new, standards-based product set.
While we are eager to realize the benefits of combining our clientsâ€™ collective expertise and designing future solutions, we remain overwhelmingly focused on your success today. We will continue to maintain the same level of commitment to support and service level agreements, and there will be no interruption in the service you receive today. As we build this new community, we will maintain and enhance each companyâ€™s current commitment to advisory boards as well as user groups and mailing lists.
We expect the merger of Blackboard and WebCT to be finalized later this year or early next year, subject to regulatory and other approvals. The combined company will be named Blackboard and will be led by Blackboardâ€™s current President and CEO, Michael Chasen. We are pleased that several members of WebCTâ€™s executive team will remain with the combined company and join Blackboardâ€™s existing executive management team, including Chris Vento as Sr. VP of Technology and Product Development, Peter Segall as Sr. VP of Education Strategy, and Barbara Ross as Sr. VP of Integration Strategy. Karen Gage will be joining the Marketing group as a VP. Carol Vallone, WebCTâ€™s CEO, will continue with the combined company as a consultant focused on client relations and strategy. Until the merger is complete, however, each company will continue to operate independently.
In closing, we would like to thank you for your institutionâ€™s business to date and request your input as we embark on this next phase of e-Learning. Please plan on joining us at EDUCAUSE 2005 in Orlando, Florida to learn more from our corporate presentations. The presentations will be held on Wednesday, October 19, 2005, 11:40 AM EST in Meeting Room W204A and on Thursday, October 20, 2005, 2:20 PM EST in Meeting Room W204A. Additional information will also be available at www.Blackboard.com/WebCT. In the mean time, if you have any questions, please do not hesitate to contact your current account manager.
We look forward to our continued partnership, hearing your thoughts and answering any questions you might have.
Chairman, President & CEO
Michael L. Chasen
President & CEO
2 thoughts on “Worlds Collide”
Open source and smaller more adept companies will certainly rise in profile as the merger between the two leaders is only an attempt by the money managers to stave off the competition by size rather than by a quality LMS. It is the venture capitalists and shareholders driving this merger between WebCT and College Acquisition Sub, Inc. (a subsidiary of Blackboard). There was cash sitting in both companies ($26 million in WebCT and $99 million in Blackboard. Itâ€™s too bad the driving force was not focused on taking that cash and investing it into a better product. Mergers cost a lot of money – in addition to the cash, $80 million for this particular merger has to be borrowed from a Credit Suisse in the Cayman Islands and will have to be paid down by BB. This loan and the hundred + million in cash could have gone a long way into R&D. Nothing has changed as both Blackboard and WebCT were mired in trouble anyway stemming from a fundamental problem of design and scalability when compared to the truly scalable LMS vendors out there like Desire2Learn and others. All this merger will do is discourage WebCT staff and anger WebCT customers who hated Blackboard in the first place but now must come to them with cap-in-hand. All competitors and the whole new genre of Open Source LMSs will find more space to grow as a result of this merger. 1 + 1 = 0.9
Thanks, Steve. I hope you’re right, but I’m far from optimistic. I see campus after campus making the Blackboard choice, and once they’re in, they tend to stay in.
I certainly agree that the cash could have been used to much better purposes!