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 by John Rubino |
The Internet, inevitably, has failed to live up to its
early hype. Security is still too iffy for large-scale commerce, modems
are too slow to handle complex graphics, and phone service is too easily
interrupted.
But the biggest deficiency is content: Most of the stuff that's available on-line is identical to what can be had by dialing an 800 number or visiting the corner newsstand. |
So until the entrepreneurs of cyberspace create products unique to their medium, the Web will remain, so to speak, heat without light. Unique content, however, is coming. And one area that's ripe for it is education.
Consider the contrast between courses at a traditional college and an Internet-based "cyberuniversity." With the former, you show up, more-or-less washed and clothed, at a room of the school's choosing at a time of its choosing. Then you sit among strangers while a person at the front of the room either drones on about things you already know or glosses over things you can't quite grasp.
On-line, however, you choose the time, pace and order of presentation, and the duration of the lesson. If you crave a little psychoneuroimmunology at 4 a.m., and you happen to be naked with a big glass of wine in your hand, no problem, just log on and go for it.
If you don't understand something, press a button and it repeats. When you've got it, move on. If you get stuck, e-mail the teacher, whose response will be waiting the next time you log on.
You, not the institution, control the learning process. For everyone who hated the regimentation and waste of traditional colleges, this really, really resonates.
But the advantages of "asynchronous remote learning" become even more apparent when the scene shifts to corporate training programs. Moving from the classroom to the Web will allow employees to learn at their own pace. It will also allow them to call up "modules" on specific subjects as the need arises.
One writer calls such on-demand learning "kanbrain," a play on the Japanese term for just-in-time inventory delivery. The name is unlikely to stick, but the point is a good one: If it works, this could be one of the first tangible ways that the Internet raises the productivity of white-collar workers.
Private colleges such as Phoenix University have been offering on-line degree programs for a few years, and the idea is beginning to catch on in Virginia, thanks in part to McLean-based UOL Publishing (UOLP, $13).
UOL takes courses that have worked in other forms and converts them to an interactive, on-line format. It introduced its first Web-based demo course in November 1995 and got paid for a course for the first time less than a year ago.
Since then, it's been aggressively building a library of "courseware" by partnering with people who offer popular classes in the off-line world and buying out competitors. It now has more than 200 different courses and/or corporate training modules.
UOL and George Mason University in Fairfax are creating on-line graduate business courses, for example. The first will be a statistics class, followed by accounting. If these work, the concept will be extended to introductory economics, English, mathematics, psychology, sociology and astronomy.
Last year was a busy one for the company. In June UOL and Autodesk agreed to develop a "virtual campus" system to serve as a central location for Web users to buy and master Autodesk software. In July UOL bought Cognitive Training Associates, a Texas-based developer of just-in-time, skills-based training for the electrical and health-care industries. In October Cheyenne Software agreed to use UOL's technology for the delivery of courseware related to its software products, and in December UOL raised about $17 million in an initial public offering. UOL wants to grow even faster, so the coming year should be full of new partnerships and major acquisitions.
As for how to value its stock, well, that's another one of those assumptions about assumptions deals. UOL currently has minimal revenues and big start-up losses. But based on its recent activity, its top line at least should grow dramatically. Once UOL is a going concern, says Ulric Weil, an analyst with Arlington-based Friedman, Billings, Ramsey & Co., you can compare it with other companies in the field of high-tech training. Those firms are "valued very richly" - often at 30 to 40 times their earnings, he says.
There's sure to be a gigaquad of competition if the demand for Web-based education explodes, says Weil. But "the market is going to grow so quickly that UOL doesn't need a dominant share to do all right."
That's it for now, class. To summarize today's lessons: If cyberschool lives up to its hype, this could be one of the growth stories of the coming decade. And UOL, because of its early prominence in the field, bears watching.
John Rubino, a free-lancer who specializes in public companies, is writing a book about investing in local stocks.
© 1997, VIRGINIA BUSINESS MAGAZINE