It's Sept. 1, the first day of classes at Georgetown University, and roommates Charnella Palaby and Lauren Caselli are checking out their Blackboards. But that doesn't mean they're looking at chalk-smudged diagrams at the front of the classroom. Instead, the 19-year-olds are using software from Blackboard Inc. (BBBB) that's changing the very notion of going to school. Palaby and Caselli can fire up their laptops and go online to get assignments, take tests, listen to Spanish-language drills, even join in a discussion of Dostoyevsky's Crime and Punishment. Thanks to Blackboard, they can pursue classroom activities anytime, anyplace. "If I misplace my syllabus, it's always there on Blackboard," says Palaby, a government major from San Francisco.
What these two sophomores take for granted is a technology that earlier generations of collegians may not even know exists. Matthew S. Pittinsky and Michael L. Chasen founded Washington-based Blackboard in 1997 after graduating from American University, and since then it has taken the world of higher education like frat boys storming a football field. More than 2,000 schools are using Blackboard as this term opens, including more than half of all U.S. colleges and universities. The $53 million that Blackboard raised in an initial public offering this June will help it continue this overhaul of education. "In the next 10 years online teaching and learning will be part of the DNA of educational institutions," says Pittinsky, 32, Blackboard's chairman.
The technology doesn't replace classroom instruction, as many online schools do. Instead, Blackboard is designed to complement what happens in class. It gives students one centralized site on the Net to get course outlines, lecture notes, and reading materials. It also lets them take tests, hand in papers, watch videos, and participate in cyber-discussions that can bolster in-person lectures.
Consider one course taught at Georgetown, Shall Microbes Inherit the Earth? Before each class, assistant biology professor Heidi G. Elmendorf starts a discussion online so the face-to-face discourse can take off from a higher plane. Each of the 55 students is required to make at least one posting. One online session started with students relating their own experiences of popping antibiotics for the sniffles and morphed into sophisticated observations on how overuse of the drugs makes bacteria more resistant to antibiotics. Says Carrie Andolina, a Georgetown junior who took the class last year: "I'd rather respond to something another student suggested than read a paragraph and write about it."
ROOM TO GROW
Blackboard is changing extracurricular life, too. The technology lets schools put everything from fraternity Web sites to health-care services online. Blackboard also provides a system that lets students use their ID cards as debit cards. They can swipe their IDs to pay for books, laundry, or late-night munchies. And the payment system lets them go to the Web to check past transactions or the remaining balance on their cards. If her balance is low, Georgetown's Caselli can use the Blackboard site to transfer money from her bank to her university account.
Pittinsky thinks the company has plenty of room to grow. Blackboard has publicly targeted annual growth of 20% to 25%. One reason: Some 86% of its customers buy only one of its five products, according to estimates from Merrill Lynch & Co. (MER), so there's plenty of opportunity to sell more products to existing clients. On top of that, Blackboard is increasingly targeting American K-12 schools and foreign universities, markets that Credit Suisse First Boston (CSR) figures are worth about $2 billion. CSFB projects that the company will boost revenues 19% this year, to $110 million, while it earns $7.8 million, compared with a loss of $1.4 million last year.
NO NEW HIRES NEEDED
Blackboard faces an array of smaller competitors. But the biggest threat lurks in the leafy groves of academe. The Sakai Project, an open-source software initiative led by Stanford University, Massachusetts Institute of Technology, the University of Michigan, and the University of Indiana, offers the prospect of free software to budget-conscious schools. The $6.8 million project has already launched the first version of its offering. "There's no way a centralized system can innovate fast enough to keep up with all this stuff," says Bradley C. Wheeler, Sakai's vice-chairman.
Still, the most likely scenario is that Blackboard and other commercial software will coexist with open-source products. The key reason: Free software requires technical support, and only the largest universities typically have enough techies on staff to manage it. "A Blackboard license costs roughly the same as a senior programmer's $100,000 job," says Serge Goldstein, academic services director at Princeton University, a Blackboard customer. "If you hire an additional staffer [to tend to the software], you've just blown your savings."
As Blackboard and its rivals slug it out, teachers are figuring out new ways to take advantage of the fast-evolving technology. For one exam, Duke University history professor John Herd Thompson used Blackboard to juxtapose two video clips. One, from True Grit, showed John Wayne's bloody shootout with Ned Pepper, while the other showed Canadian Mountie Sam Steele facing down a desperado without drawing a gun. Wayne riddles his nemesis with holes; Steele says: "Men don't wear pistols in Canada." Students then wrote an essay comparing perceptions of the U.S. and Canadian Wests. With John Wayne shooting it out on students' laptops, getting an education may never be the same.
By Catherine Yang in Washington