2 Leading Online Outsourcers Merge, Consolidating a Market

More and more colleges are hiring for-profit companies to build and market their online programs, a controversial practice that worries some observers. This week the online-outsourcing industry is going through a significant consolidation. Two of its leading competitors, Embanet and Compass Knowledge Group, are merging.

In the announcement, the companies billed the move as a “winning combination” for their clients, a long list of nonprofit institutions that includes well-known names like Northwestern University and George Washington University. That list is likely to grow: “In the next five years, we expect nearly four million new online learners will come into this market,” said Steve Fireng, chief executive of Embanet.

The question now will be whether a larger company is a better one, says Jay A. Halfond, dean of Metropolitan College and Extended Education at Boston University, which uses both Embanet and Compass. The corporate marriage, he says, will create “some interesting ethical challenges.”

“Will they be able to host competing programs from different universities, and build firewalls that reassure their university affiliates?” Mr. Halfond asked in an e-mail to The Chronicle. “We in higher education are accustomed to institutions that are built to last centuries—so working with dynamic, ever-changing for-profits can be very challenging in the volatility of their ownership, structure, growth, and staffing. It is not always a natural marriage, and like all marriages is based on trust, so it will be interesting to see whether this new company is better able to reassure universities of its stability and reliability.”