The U.S. Department of Justice indicated last week that it would allow Blackboard Inc. to take over WebCT Inc., paving the way for the two education-software companies to merge within the next few months.
Michael L. Chasen, president and chief executive officer of Blackboard, said he expected the merger to take place in March or April. “We’re going to make plans about how to operate as a combined company,” he said.
Both companies sell content-management software to academic, corporate, and governmental organizations. The combined company will run under the Blackboard name and is expected to become the dominant player in the market.
During a routine antitrust review of the merger, the Justice Department interviewed various college officials, asking what effect such a merger would have on them. The department also asked for more information from the two companies in December, a request that delayed the takeover. Blackboard officials had originally hoped to combine the companies by the beginning of the year.
But last week the department closed its investigation without taking any action, effectively giving its seal of approval to the deal.
Mr. Chasen said Blackboard would continue to support WebCT software after the merger.
In the coming years, as new products are created, he said, the two companies’ computer systems will be combined into one.
“Over time, naturally, the systems are going to converge,” Mr. Chasen said. “It’s not like someone is going to wake up one morning and see a brand-new system.”
Eduventures Inc., a market-research company based in Boston, estimates that Blackboard has 45 to 50 percent of the college course-management market, and that WebCT has 35 to 40 percent of the market.
Taking into account a few overlapping institutions, the newly merged company could have 65 to 75 percent of the higher-education market, according to Eduventures’ estimate.
Other companies, such as eCollege and Desire2Learn Inc., also sell course-management software to colleges.
Richard N. Katz, a vice president of the education-technology consortium Educause, said the bigger Blackboard will not pose any sort of monopolistic threat to higher education.
The course-management market is so easy to enter, he said, that big software companies, such as Microsoft and Oracle, or open-source projects, such as Sakai and Moodle, could well become players in the future.
“I’m not going to lose sleep over it,” Mr. Katz said. “In the longer term, I think Blackboard is going to have to be a very competitive entity.”
http://chronicle.com Section: Information Technology Volume 52, Issue 24, Page A37