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Imagining an Amazon Purchase of Kaplan
August 6, 2013 - 9:00pm

To be clear.  Kaplan, the for-profit education company owned by the Washington Post, was not included in the sale to Jeff Bezos.

Bezos bought the newspaper.  Amazon is not part of the deal.

Before you got all the facts, did you have an initial reaction to the news of the purchase?

To put it another way, if instead of Bezos privately buying the newspaper the news had been Amazon buying the entire Washington Post company (including Kaplan), what would you have thought?

Would a for-profit education company be a good fit for Amazon?  

Would an Amazon purchase of Kaplan be a good or bad thing for the higher education industry?  For students?  For taxpayers?

Personally, I'd be totally excited if Amazon ever decides to get into the for-profit education business.

Why:

Underinvestment:   

My sense is that there is not enough money coming into the for-profit education space.  This is perhaps a contrarian view. 

The for-profits have had a terrible couple of years. The twin shocks of tightening government rules and a recession have depressed revenues and depleted student ranks.  Many observers are wondering how the for-profits will deal with the growth of low-cost competency based degree programs.

The business problems of the for-profit sector has scared away investment, as funders have soured on the idea that proprietary higher education can provide consistently high returns. This is a mistake. 

The next few years will witness a shakeout of those for-profit institutions that do not provide value, and the ascension of a smaller number of proprietary players that offer a superior educational value proposition.

An Amazon purchase of Kaplan would accelerate the rejuvenation of the for-profit sector. 

Amazon has the resources to invest in higher education for the long-term, and a corporate culture dedicated to providing long-term customer value over short-term profits.  

Higher education, even for-profit higher education, is a long game.  Building a trusted brand and discovering methods to improve educational productivity may take years and years. The payoff will be once the brand is built, and the the quality foundation is laid, that blended and online education can scale to meet global demand.

Innovation:

We need to try some new things in higher ed.  We need a breakthrough as big as the iPod and iTunes was for music, as big as the Kindle and the Kindle store was for books.

In both of those cases the innovation involved a combination of software and hardware.  An ecosystem not a product.   

Imagine if Amazon owned Kaplan.  What would a Kindle Fire built from the ground-up for learning look like?   

Maybe the innovation would be on how education is funded. Could an Amazon support really good courses by subsidizing instructional costs with hardware purchases, materials purchases, advertising, or opt-in data collection?  Maybe

All these ideas may scare the pants of you.  Perhaps you are thinking the last thing the world needs is for Amazon to do for higher education what it has done to books (and booksellers).  

It all depends on your perspective. 

Because of Amazon I am reading way more books than I ever read in the past. You?

I'm spending more money on books, and I am not buying my books at the bookstore, but I'm a much happier reader. You too?

Does higher ed exist for the students or for us?  (Leaving aside our knowledge creation role for one moment).

Can we imagine some future where higher ed gets much better for those people that need a degree or a credential, but at the same time worse for us?

The reality is that an Amazon purchase of Kaplan would not actually disrupt our higher ed world.  The campus based, bundled educational experience is more durable (and more valuable) than we give it credit.   

We should be confident enough to welcome new competitors and new entrants, even if these new competitors remain firmly in the world of speculation and imagination.

How do we get Bezos excited about higher ed?

 

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