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eCollege.com Plans To Reach Profitability In 2001, A Year Early - financial planning - Brief Article

Educational Marketer - December 18, 2000

On the cusp of the new year, 4-year-old ecollege.com (Denver) has laid plans to reach profitability next year instead of in 2002 as analysts had anticipated, according to the company's CEO Oakleigh Thorne.

eCollege.com, which partners with educational institutions to create online campuses and which built its business primarily in distance learning, is eyeing new markets and realigning some of its management.

While Thorne is expected to lay out specifics on the company's 2001 plans later this week, he gave a hint of what's to come in October, when he discussed the company's third-quarter financial results.

Company strategy, he said, would be an all-out assault on the traditional campus market, with a teaching platform to integrate the Internet into courses and integration of back-end administrative systems.

eCollege Eyes Traditional Campuses

The attraction of the on-campus market, where competitors such as Blackboard (Washington) and WebCT (Lynnfield, MA) already are major players, is the growing number of college applicants, the need for colleges to trim costs and a student body that expects to work on computers in courses.

Almost three-fourths of traditional bricks and mortar colleges offer some online courses, according to industry estimates. "We now think that the on-campus market is very important, too," Thorne said.

Thorne said higher education was the company's primary market; only four of the 18 contracts the company signed in the third quarter were with corporations. Also, Thorne views virtual high school programs as an emerging market. That's a field that has attracted Apex Learning (Bellevue, WA), which is developing a track record in providing online Advanced Placement courses, and JonesKnowledge.com. (Denver), which won the course-delivery contract for the Florida Online High School (EM, Nov. 6). WebCT and Blackboard also are eyeing the field. eCollege.com's educational partnerships include the Kentucky Virtual High School and nine school districts around Seattle.

The year 2001 also may bring acquisitions of smaller companies similar to eCollege.com or partnerships with companies who offer solutions in the middle ground between portals and back-end systems.

Company Promotes Two Top Executives

As part of its internal realignment, the company last week announced the immediate promotion of two of its top executives. Chief operating officer Charlie Schneider added the title president, and chief financial officer Doug Kelsall added the title executive vice president.

The promotions signal the company's intent to align its management team so that there are no overlapping responsibilities, Kelsall told EM. Schneider, who has been with the company since June 1999, oversees the company's management committee and day-to-day operations. Kelsall, who joined eCollege.com in September 1999, oversees the company's finance, accounting and administrative functions.

Client List, Revenues Grow

With the company growing so quickly, there was a need to streamline the company's internal procedures, Kelsall said. "We're trying to drive our path to profitability sooner rather than later," he said.

Financially, the company, which went public in December 1999, earned revenues of $4.8 million in the third quarter, which ended Sept. 30, up 214% over the same period last year. The company's net loss was $8.5 million, up 118% over a year ago (EM, Nov. 6).

During the quarter, the company added 18 new clients, bringing the total number of customers to 198. The number of eCourse enrollments more than doubled in the fall 2000 academic term from fall 1999 to 31,838 students.

Contact: eCollege.com can be reached at (303) 873-7400.

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