Acquiring Blackboard would make strategic sense for Google, Microsoft or Cisco.
Price matters, and Blackboard is expensive at a market capitalization of $1.46 billion. But if the acquisition makes good strategic sense, the price over the long-run (a few hundred million here, a few hundred million there) makes little difference.
Google is sitting on $33 billion in cash and short term investments, Microsoft $43 billion, and Cisco $39 billion. They can each easily afford to make a major bet on higher ed, and buying Blackboard would be the fastest way to enter this market in a big way.
YouTube cost Google $1.65 billion in in 2006. WebEx came with a $3.2 billion price tag for Cisco in 2007. Looking at Microsoft's acquisitions, I'm surprised by how reluctant Redmond has been to make any big moves. Compared to Cisco, Google (or Oracle), Microsoft doesn't appear to have an appetite for large purchases.
Blackboard makes sense for Google, Microsoft or Cisco if you believe that the worldwide postsecondary education market is set for exponential growth (as I do).
Today, the higher ed story is Western, place-based, face-to-face, and largely state funded. The story of 21st century higher ed will be global, technologically mediated, distributed, mobile, and market driven. Blackboard would be one piece of the puzzle to becoming an education focused company.
Google, Cisco and Microsoft each have the scale, technological infrastructure and worldwide reach to be major players in the education market over the next 40 years. What they lack is not only a learning management platform (that is just software), but deep experience in partnering with the academic side of institutions and a culture of aligned with the business of teaching and learning. Cisco and Microsoft know CIOs, Google knows students, but none of these companies is as integrated into the day-to-day business of creating and delivering courses as Blackboard.
You might be critical of Blackboard's software, but the shortcomings in the platform should be balanced against the company's long history of building relationships with schools and software partners. Google, Microsoft and Cisco already do a great deal of business in higher ed, and although each would position an LMS differently, the ability to offer a learning management system would both complement their current product lines and services and offer new avenues for growth and expansion.
Most big acquisitions are eventually seen as mistakes. Think Time Warner and AOL; Mercedes and Chrysler; eBay and Skype; Sprint and Nextel; HP and Compaq - all of them bad (okay - maybe HP had done okay - but I don't get it).
Blackboard represents an opportunity.