U21 goes online just as market tumbles

September 14, 2001

An online university was created last week by Universitas 21, the global consortium of 18 research-intensive universities, and Thomson Learning.

The launch comes in the midst of a downturn in world stock markets that has hit the valuations of learning companies. It also coincides with the publication of a study of the global online education market that paints a picture of a sector facing falling investment and more mergers.

Markets and Opportunities 2001, a report by Eduventures. com, finds that revenues in the sector rose by 8 per cent to reach nearly $105 billion (£72 billion) last year. The post-secondary education market, worth $9.3 billion, was the sector's third highest revenue generator, following primary and instructor-led training.

The $50 million, Singapore-based U21 operation will be owned jointly by U21 members and Thomson Learning, a part of Thomson Corporation, which is listed on the Toronto and London stock exchanges.

U21 managing director Chris Robinson said only the University of Michigan did not want to participate in the venture. Peking and Edinburgh universities have yet to decide whether to take part.

Because the joint-venture company, to be called U21global, will be owned jointly by the participating institutions and Thomson, the universities will be much more than just service providers, Mr Robinson said. U21 will develop its own course materials rather than simply act as a broker for existing ones.

Thomson, which will have a 50 per cent share in the business, will provide management services. It will also oversee content production, and it may provide or customise some content, Mr Robinson said. U21 will provide the quality assurance framework via its subsidiary U21pedagogica.

The launch of U21global followed long negotiations - U21 had signed a memorandum of understanding with Thomson late last year.

Mr Robinson said the process was more complex than had been anticipated, but that setting up a new e-learning operation with so many parties was never going to be simple. Toronto University dropped out of U21 earlier this year after a dispute over the conditions of the global venture.

Under the U21global deal, each university will still be allowed to conduct its own online learning activities using its name and logo.

Alan Gilbert, chair of U21's implementation committee and vice-chancellor of the University of Melbourne, said the participating institutions were confident about the venture's academic integrity and commercial viability because "the fundamental business architecture, brand value and market demand are right, and Thomson is a superb partner".

The first students are expected to start in January 2003 with Southeast Asia the initial target market.

Thomson is investing $25 million in the venture. Universities will contribute a similar sum, with each adding $500,000 to $5 million. U21global will now seek a chief executive.

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