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Business education keeps turning to the Internet, and in a deal announced on Aug. 2, execs could be learning in Spanish on the Web by the yearend. Spain's Telefonica Media, Cisco Systems Spain, and IBM Spain have invested $96 million (100 million euros) in E-ducavīa, a joint venture to develop an online learning program for speakers of Spanish and Portuguese. Los Angeles-based Quisic (formerly University Access) will provide the online-learning content and courseware for E-ducavīa.
Analysts say this is the second-largest deal so far for e-learning companies with a focus on business education. The biggest was EDS's July 11 deal to pay nearly $150 million for DigitalThink to produce new e-learning programs for corporations. Quisic's addition to the E-ducavīa team adds to the building momentum in the education industry to embrace e-learning, especially within corporations.
"There are companies out there with 60% of their revenues coming from products that didn't exist 12 months ago," says Michael Moe, director of growth research at Merrill Lynch. "This is creating a tremendous solution to the gigantic problem in the knowledge economy: Without education, you're not relevant." The corporate e-learning market in the U.S. topped $550 million in revenue this year and is expected to grow to $11.4 billion by 2003, International Data Corp. predicts.
"GOOD MESSAGE." The Quisic deal highlights how Old Economy businesses are trying to capitalize on corporate e-learning. For IBM, it's a chance to employ its e-learning software, Lotus Notes, on a major program. Cisco Systems, of course, could sell more network routers for the content-rich medium. And Telefonica Media gets to prove that it's hip enough to swing its workforce -- most of which is in Latin America -- into the New Economy. And for Quisic? Having a relationship with such key players sends "a good message" to potential corporate clients says CEO Alec Hudnut.
The partners are in the process of determining how the revenue stream from E-ducavīa will be split. Eventually, they hope to sell the product to other companies to use for corporate training. Quisic, which expects to be profitable in 12 months, says the E-ducavīa deal should also help it in its next round of financing, after attracting $42 million in January.
A glance at Quisic's 1999 earnings makes this move into Portuguese and Spanish-speaking e-learning appear somewhat puzzling. The company has no track record in Latin America. But Hudnut argues that "no [e-learning company] is making a major push into Latin America." Nearly 40% of Quisic's $2 million in annual revenue came from Asia. However, Hudnut says a big deal in China is three to six months off. Indeed, the company began formal negotiations with Chinese officials in late 1999. Already, Quisic courses are being broadcast in English to students via Chinese television. "There's no reason why America's best export can't be intellectual capital," says Hudnut.
SPANISH GROWTH. For now, Quisic lacks a Spanish or Latin American B-school partner. To date, the company has attracted only U.S. and and non-Spanish European B-schools, among them the University of North Carolina, University of Southern California, University of Chicago, Dartmouth's Tuck School of Business, and London Business School. But by the end of 2000, experts expect to see Spanish B-schools lining up to offer content to Quisic, experts predict.
Carlos Cavalle, dean of IESE, a business school in Barcelona, says the school will meet with Quisic in the coming weeks to discuss how the school could approach e-learning. Neighboring schools, Instituto de Empresas and ESADE are in talks with the company, too. Mexico's ITESM, in Monterrey, has offered management education via distance education, primarily over cable TV, for 11 years.
Hudnut says Quisic is interested in that school's content, too. The payoff of Spanish e-learning for any B-school is clear: Lending content to a successful e-learning company would grant the B-school new revenue sources in an increasingly competitive and global market for business education.
Many B-schools and e-learning companies contend that business will soon be conducted only in English. But for Quisic, a chance to tap the market in Latin America, Europe, and the U.S. makes sense. And when three corporations with workforces totaling nearly 100,000 worldwide ante up workers and money to build a program, it may be time for more e-learning companies to learn that "business" in Spanish is empresa.
Copyright 2000, Bloomberg L.P.
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