How netting students adds up

September 17, 1999

Websites are expensive to set up, so colleges are turning to commercial firms to build bespoke portals. Jon Marcus reports.

Many United States universities are beginning this academic year with a real-life lesson in mathematics.

Here is the equation: the average American student spends 22 hours a week online, according to a New York market research firm. Collectively they pay out $93 billion a year for goods and sundries, not including tuition. An increasing proportion of that conspicuous consumption goes to vendors on the web - about $100 million, and that is projected to swell to $4 billion a year by 2002. But setting up campus computer networks just to serve university students can cost millions of dollars.

The solution? University "portals" that have let notoriously stingy US schools harness students' buying clout to their advantage by attracting private companies to design sophisticated campus websites at no cost to them.

The universities get distinctive high-technology identities that might otherwise have been beyond their means. The students get easier and faster access to online information, 24 hours a day. The companies recoup their investments by selling advertising to firms that covet the 18 to 24 year-old student market.

"More and more, schools have to treat their students as customers, and they do have to start looking at what they can offer themselves," said Laura Kvinge, spokeswoman for Campus Pipeline, one of the largest companies that builds such portals. "What we do is to bring them all of these tools to reach out and retain their students, which a university might not have the resources to do for itself."

It has not been a bad deal for Campus Pipeline, either. SCT, a leading vendor of administrative software for higher education, has become a major investor. Early advertisers have included Sun Microsystems, Dell Computer and Amazon.com.

The advertising appears on Campus Pipeline's "integrated portals", which let more than two million students at its 420 client universities register for classes, check their grades, access email accounts and pay tuition online. When they choose a course, the required books appear on the screen, along with the option to buy them from an online vendor. Each school's colours and logo are incorporated, and an online dictionary and thesaurus with links to research resources including, in many cases, the campus library is available.

University Ventures, a portal provider set to debut on October 1, will offer downloadable software for students. The package will include a tool called Catapult that simplifies web publishing, an MPEG-4 media player, and Emote, a software program to animate facial expressions in online virtual characters.

Critics complain the students are a captive audience and that the universities are in essence selling access to them for commercial motives. But the incentive is significant. When the Harvard Business School set up its own portal, it took two years and cost $11 million, not including the expense of constantly updating the content. Private portals hope to keep the patronage of students even after graduation, and well into their high-spending adulthood, by providing such things as free email and retail discounts.

Campus Pipeline also plans to take its service overseas. In addition to US universities such as Vanderbilt and the University of Nebraska, the company has client schools in the United Arab Emirates, Ireland and Canada.

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