Washington
Blackboard Inc., the educational-software company, is expected to announce today that it is buying one of its pluckiest competitors -- Prometheus, an educational-software project at George Washington University. Representatives of the company and the university declined on Monday to discuss the financial terms of the deal, but they did say that George Washington would become an equity stakeholder in Blackboard, a privately held company based here.
Blackboard officials said they would continue to support and develop the Prometheus course-management platform as a separate product for the foreseeable future, while the converged companies work on a long-term plan for integrating it with Blackboard’s competing platform. Blackboard will assume responsibility for all of Prometheus’s contract obligations, and will work to resolve the differences in their respective pricing models, according to Blackboard’s chairman, Matthew S. Pittinsky.
Both Blackboard and Prometheus have developed Web-based software for creating online versions of class rosters, course outlines, assignments, discussions, quizzes, and grade books. But the two organizations have taken different approaches to opening up their course-development platforms.
In what it calls a “community source” model, Prometheus makes the source code for its software available to its users to customize. Blackboard has kept its core code secret but has begun releasing chunks of what is essentially connector code intended to let customers integrate other applications, such as math-notation and virtual-lab programs.
“What Prometheus did is put a very high value on openness and universities’ sharing work,” said Bo Davis, managing director of Prometheus. Blackboard emulated that model in its own software even as it competed with Prometheus, he said. “They liked it so much, they bought the company,” Mr. Davis said.
Prometheus chose Blackboard over two other undisclosed suitors because Blackboard has a track record of maintaining multiple operating platforms for its various services, said Mr. Davis. “That made us feel better that they would support both learning-management systems,” he said.
Demand for community-source software is strong enough that if Prometheus disappeared, another company would take its place, Mr. Davis said. “It makes more sense for Blackboard to buy Prometheus to keep another competitor from entering the market,” he said.
Blackboard was also the safest choice from a financial standpoint, Mr. Davis said. Since its creation, in 1997, “Prometheus always had plans to spin out into a for-profit company,” he said. George Washington decided to minimize its risk by going with Blackboard, which is one of the top players in the learning-management arena, he said. It and WebCT are the leading providers of course-management software.
Blackboard and Prometheus have headquarters a few blocks from each other in downtown Washington -- also an important factor, Mr. Davis said. Merging with Blackboard spared Prometheus employees the hassle of relocating.
Mr. Davis and about a dozen of the 38 university staff members involved with Prometheus have accepted jobs with Blackboard. Mr. Davis will continue as managing director for Prometheus. Prometheus isn’t laying off any of its employees because of the merger, he said, as George Washington has offered to help remaining Prometheus employees find positions at the university during the next month or so. Any employees who don’t find positions will be offered severance packages.
Mr. Pittinsky said his company was interested in all aspects of Prometheus -- its technology, employees, and customers. Prometheus grew sharply in 2001, from 20 client institutions to 65. Blackboard officials characterized Prometheus as a successful undertaking that had “proven its mettle” and had acquired an “A list” of about 70 institutions as users, among them the Rochester Institute of Technology, Teachers College at Columbia University, and the University of California at Berkeley.
“Prometheus appealed to institutions that want to customize, particularly in the content area,” said Robert J. Abel, senior vice president for business development at CollegisEduprise, a higher-education technology-services company.
Prometheus is the fifth acquisition for Blackboard since its founding, in 1997, and three of those were companies originating in academe. Blackboard, which has more than 400 employees, reports annual revenues of about $50-million.
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