The Magazine for Leaders in Education: Thomson buys, then shuts down harcourt’s higher education web site – News: noteworthy people, programs, funding, and technological advances in the world of higher education

Thomson buys, then shuts down harcourt’s higher education web site – News: noteworthy people, programs, funding, and technological advances in the world of higher education – Brief Article

Al Branch

Faced with the prospect of pouring hundreds of thousands of dollars, if not millions, to properly brand it, Thomson Corp. shut down the Harcourt Higher Education: An Online College Web site it picked up when Thomson bought some of Harcourt’s assets for $2 billion earlier in the year. The move came as a surprise to some, but it is a cautionary tale of the difficulties of establishing an online distance education venture (www. harcourthighered.com) in an already crowded market. In recent years, the distance education market has exploded with companies trying to reach not only traditional four-year students, but also the millions of adults who are thinking about brushing up on certain skills, finishing their college education or learning whole new endeavors.

“It was so early in the game for them (Harcourt) that they didn’t have a lot of customers for the Web site,” Kristen McCarthy, a Thomson spokesperson, told Matrix. McCarthy did not know the exact number of customers the Web site had, but Matrix estimates that it was fewer than 25.

“It did not fit into Thomson’s future e-learning plans,” she added.

Just what those plans are was not disclosed. Attempts to reach Ron Dunn, who heads up Thomson’s online initiatives, were unsuccessful.

The Harcourt site offered dozens of individual courses in several core higher-education disciplines, and offered bachelor’s and associate’s degrees in:

* Science in Business

* Science in Health Studies

* Science in Information Technology.

In addition, the online college also offered certificate programs in:

* E-Commerce

* Marketing Research and Analysis

* Marketing

* Health Administration

* Health Services Marketing

* Health Services Accounting

* IT Project Management

* IT Network Systems Integration

* IT Internet Practitioner.

Part of the problem for Harcourt–and other online distance learning companies–lies in what kind of alternatives they can provide potential students. While Harcourt spent millions creating its online college, using its respected curriculum content to flesh out its course load, it lacked a bricks-and-mortar alternative for students who want to meet occasionally with a live instructor face-to-face.

To some, this may sound as though it defeats the purpose of online distance education, but not to market analyst Peter Appert, managing director of Deutsche Banc Alex Brown, who believes it was a drawback for Harcourt.

“Standalone distance learning entities are finding it very challenging in today’s marketplace,” Appert says. “It’s hard for them because they don’t have a traditional classroom component to leverage it.”

Appert calls it a “blended solution,” where distance learning companies offer different ways to take course. He was quick to add, however, that there are exceptions to the rule, namely Apollo Group’s online University of Phoenix, which has become a dominant brand in the industry. But, for many, without a classroom alternative, some students are still skeptical.

“Harcourt had spent tens of millions on the effort already, so I thought Thomson might stick with it,” Appert says. “But, I guess Thomson didn’t want to pour more money into it. Pure-play distance learning entities are finding it difficult because without alternatives, they find it hard to reach critical mass without spending a lot of money to do so.”

Trace Urden, senior analyst at the investment bank W.R. Hambrecht, takes it a step further, stressing that Harcourt’s problem was beyond not having traditional classroom alternatives.

“At the end of the day, I think it comes down to whether you are getting anything that people, namely employers, will care about. It’s about the impact that a degree from a place like Harcourt will give you on your resume,” Urden says, adding that building a brand that will offer such respect as a traditional college is not something that can be accomplished with “TV advertising.”

Urden also points to the fact that Thomson has a financial interest in Unext.com, another online distance education provider, that would have likely frowned upon competition from the Harcourt site. Unext.com has deals with Stanford University, University of Chicago and Columbia University, among others, to help give its degrees some weight.

“The higher education and adult education market hasn’t really panned out at all, so Thomson’s move was a good leading indicator on how companies are considering it. It was a rational decision, partly because Thomson really isn’t into that arena,” Urden says.

COPYRIGHT 2001 Professional Media Group LLC

COPYRIGHT 2001 Gale Group