Sales: $125 million (2006 est.)
Stock Exchanges: NASDAQ
Ticker Symbol: ECLG
NAIC: 511210 Software Publishers; 514191 On-Line Information Services
The advent of the Internet brought many possibilities to the world, among them the chance for online learning. eCollege.com was one of the earliest companies to take advantage of this trend, creating a myriad of information services and "eLearning" opportunities for higher education. eCollege.com, created in 1996, went public in 1999 and has since become a premier source of online curricula for school districts, community colleges, universities, and businesses worldwide.
IN THE BEGINNING
Robert N. Helmick III was a Colorado-based attorney who had served as general counsel for several colleges and universities. As the cost of a college education continued to rise in the 1990s, Helmick believed the increasing reach of the Internet would be the perfect venue to support online learning programs. The result was Real Education, Inc., formed in Denver, in 1996. Real Education was a pioneer in the development of custom-designed online instruction programs, what Helmick believed was a way to "webify" education for millions of off-campus or "distance" students. By January 1997 Real Education had designed its first eLearning system and boasted delivery of a complete online educational package in 60 days for prospective clients. Within six months the fledgling firm had its first customer: the University of Colorado.
After signing the University of Colorado, Helmick hoped to have two dozen clients within four years. Although he envisioned postsecondary learning as Real Education's primary source of income, the company could tailor its online programs to the needs of businesses, school districts, and even individual schools. Helmick need not have worried as Real Education (renamed eCollege.com) picked up several customers and easily surpassed his original client goal, hosting online programs for dozens of high profile clients by the end of 1998. Early customers included California State University (at Hayward), DeVry University, Drexel University, the University of Pennsylvania, Seton Hall University, and the University of Virginia. By the end of 1998, revenues reached $1.7 million, though start-up costs kept the firm in the red with a net loss of $7.3 million.
By 1999 eCollege was in the midst of transformation: the firm had reincorporated in Delaware; prepared for an initial public offering (IPO), and brought in new faces to run the company as Helmick decided to relinquish control of daily operations. He announced that Oakleigh Thorne, a Chicago entrepreneur who was among the company's earliest investors, would be the company's new chief executive and would share duties of the board's chairmanship. Thorne was a founding partner in the Chicago-based Blumenstein/Thorne Information Partners, LLC, with Jack Blumenstein, who was already a member of eCollege's board.
The company went public on the NASDAQ on December 15, 1999, seven months after its filing. Five million shares were offered at $11 each and share prices closed at $14.25 for the day. eCollege netted just over $56 million for expansion, which went into hiring executive management as well as a nationwide sales force. The company's workforce had reached 300, double the previous year's figure, so eCollege could adequately service the burgeoning online educational market, estimated at $1 billion and climbing.
At the time of its IPO, eCollege had nearly 150 clients or "educational partners" using its primary product lineup of eTeaching Solutions, CampusPortal, and eService Solutions. The company's electronic tools helped customers set up online learning resources at a time when more and more students enrolled in higher education programs did not live in campus housing. eTeaching Solutions, which consisted of an eToolKit, the eCompanion, and eCourse materials, gave clients all the tools necessary to set up online courses, including administrative needs and ways to communicate with students.
CampusPortal and eService Solutions were exactly as named; the Portal was what eCollege called its "window to the Web" that each client customized to its needs. The eService Solutions offered answers to design and hosting questions, and offered tech support to students and faculty. While the future seemed bright for eCollege, with increasing enrollments for every semester as clients expanded their course offerings, the coming crash of the dot-com market would soon take its toll.
CHANGING OF THE GUARD, 2000–03
As eCollege entered the new century, Helmick was co-chairman with Thorne but had one foot out the door. He was gone within nine months. Despite struggling through the tech bust, eCollege still signed new customers and had nearly 200 "virtual" campuses nationwide with hundreds of online courses. The company had also partnered with one of these clients, the Kentucky Board of Education, to create the Kentucky Virtual High School project, offering a full online curriculum to the state's 200,000 high school–aged students. It was the first program of its kind and received rave reviews from educators and Kentucky Governor Paul Patton.
Enrollment in eCollege-designed courses reached about 25,000 students by the spring of 2000, had 15,000 more in the summer, and grew to 34,000 for the fall semester. Educational partners numbered over 200 with colleges and universities of all sizes, including the University of Massachusetts at Amherst, Bismarck State College (North Dakota), Strayer University, Texas Christian University, and many more. eCollege had even begun offering scholarships to prospective online students, and by 2001 eCourse enrollment mushroomed to 60,000 in the spring, 30,000 in the summer, and 60,000 in the fall, the majority of whom were working women. Revenues for 2000 and 2001 rose accordingly, to $12.5 million for 2000 and $19.8 million for 2001. While eCollege's contracts and revenues increased, expenses continued to mount and the firm had yet to earn a profit. Net losses for 2000 and 2001 were $28.9 million and $12.3 million, respectively.
eCollege provides all of the necessary technology and services in an integrated approach to power the profitable growth of online distance programs. The company focuses on supporting the success of its customers by teaming with institutions to generate high student satisfaction, strong program retention and enrollment growth. As the only eLearning outsource provider focused on developing full programs, we support some of the largest and fastest growing online degree, certificate and professional development programs in the country.
The company earned the first of many distinctions in 2001 when it was named as one of Colorado's fastest growing tech companies, as compiled by Deloitte & Touche. eCollege went to earn the same rank the following year, 2002, as it continued to grow. Revenues for 2002 reached $23.7 million, with significant increases in student enrollment and added courses. Enrollment fees accounted for three-quarters of the year's revenues, which rose 19 percent from 2001. A total of just over 222,000 students were enrolled in eCollege's courses nationwide, a substantial leap from the previous two years. As the company continued to gain ground, it still had a net loss for the year of $4.9 million.
The next year, 2003, proved pivotal as the company reached profitability for the first time in the second quarter, and bought Utah-based Datamark, Inc., a marketing services firm, in the fourth quarter. In folding Datamark's operations into the company, eCollege divided its expanding services into two distinct units, eLearning and Enrollment (Datamark), with a variety of products integrated into each segment. By the end of the year eCollege had 285 educational partners in North America comprised of elementary and secondary schools and districts, private and public universities, community colleges, and state educational systems.
eCollege also earned accolades in 2003 as Colorado's Top Company of the Year in the tech, media, and telecommunications segment (designated by UMB Bank, Deloitte & Touche, and ColoradoBiz magazine); garnered the APX or Achieving Performance eXcellence award from Training magazine; and was touted as a "premier postsecondary eLearning provider" by Eduventures, Inc. Revenues for 2003 climbed to $36.9 million and the company recorded its first profit, earning net income of $600,000. Stock prices rose as high as $26.71 for the year, their highest point since going public four years earlier.
ONWARD AND UPWARD, 2004 AND BEYOND
By 2004 eCollege had 500,000 students enrolled in its clients' online courses. The company went global that year with a customer in Sri Lanka, and also moved its headquarters from Denver's Monaco Street (where its eLearning offices remained) to North LaSalle Street in the bustling hub of Chicago. Its wholly owned subsidiary, Datamark, Inc., kept its offices in Salt Lake City, Utah. The company also recorded two major new achievements: it was named Technology Company of the Year at the Colorado's Software and Internet Association's Apex Awards, and more importantly, was named to Forbes magazine's Top 25 Fastest Growing Technology Companies for both 2004 and 2005. The latter year proved even better than the previous, as eCollege surpassed the $100 million mark in revenues for the first time ($102.9 million), a healthy 15 percent over 2004's $89.3 million.
In 2005 eCollege online course or "distance" enrollments climbed to 770,000 and the firm prepared for another milestone, its tenth anniversary. eCollege had come a long way from one client in 1997 to hundreds of educational partners in the United States, Canada, and Asia. The company was again named to the Forbes Top 25 Fastest Growing Tech Companies, and in 2006 eCollege continued to sign new customers, including Texas A&M University and international education and information services provider Thomson Higher Learning.
With a decade under its belt, eCollege remained at the forefront of the online education market, though many competitors had sprung up since its formation. One of them, Blackboard, Inc., had been awarded a patent in 2006, which eCollege believed was invalid. eCollege filed a lawsuit against Blackboard alleging the patented technology was already in use by eCollege (as Real Education, Inc.) back in 1997, before Blackboard had even been founded.
- Real Education, the predecessor to eCollege.com, is founded in Denver, Colorado.
- The University of Colorado becomes the company's first customer.
- eCollege.com goes public on the NASDAQ.
- The company is ranked as one of Colorado's fastest growing tech companies.
- Datamark, Inc., of Utah is acquired by the company.
- eCollege makes Forbes magazine's top 25 list of Fastest Growing Technology Companies for the first time.
- eCollege celebrates its 10th anniversary.
Despite the lawsuit, eCollege's future was secure as established colleges, universities, and school systems throughout the United States and Canada came to the company for their online course needs. To supply its customers with cutting edge educational tools for course content, eCollege numbered many of the world's top educational publishers among its partners, including Bedford, Freeman & Worth; Elsevier; Houghton Mifflin; McGraw-Hill; Pearson; Thomson Learning; and John Wiley & Sons; as well the American Museum of Natural History and the Monterey Institute of Technology and Education. eCollege continued to best analysts' quarterly projections for the late 2000s, and was expected to bring in revenues of $125 million for 2006.
Blackboard, Inc.; Jenzabar, Inc.; SkillSoft Public Limited Company; SunGard Higher Education Solutions; VCampus Corporation.
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