Opinion – #Blackboard’s Moodle acquisition hopes?

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[You] have to wonder if the company isn’t getting ready for some grand, expensive gesture.  Main rival Moodle would be too expensive and might raise eyebrows in the government’s antitrust offices, but privately held Desire2Learn or Pearson division eCollege could be tasty tack-on targets.

That’s all grand but Blackboard’s stock fell because of a cloudy outlook. [from the Motley Fool investment blog: http://goo.gl/wh7u]

This is a quote from an article I read Wednesday when it was originally posted by Motley Fool.  Though I thought it was intriguing, I didn’t necessarily find it noteworthy at the time.  Now it’s been syndicated a few times and the more I think about it the more interesting the scenario seems.

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Blackboard, despite its acquisitions this year, its large market cap and hugely profitable licensing/SaaS model, seems that it might have trouble meeting its forecasts.  But they have a formidable line of credit and cash reserves (which usually means acquisition; this comes even after the Wimba/Elluminate buy-ups).

It’s interesting for 2 reasons I think:

  1. First is that analysts are now giving Moodle its much deserved credit as Blackboard’s main rival.  Its growing popularity and the several large-scale migrations from Bb to Moodle by colleges/universities recently have been a boon to Moodle’s growth momentum (not to mention the impending release of Moodle 2.0)
  2. What’s more interesting though is the thought that Moodle could be purchased by Blackboard (though purportedly it’s “too expensive”).  Rest assured that Moodle.org lays it out plainly about the Moodle code base in it’s documentation,

The copyrights to Moodle software can never be “sold” like they can for proprietary software. All our code is completely open source. The copyrights belong to hundreds of authors and they would ALL need to agree to any change in the license. Even if that happened, it would only apply to future code – all existing versions would remain under the existing GPL license and our large and very capable community of developers would simply fork from there and continue using and developing the GPL version [link].

Now, for Bb, perhaps no price is too high. But the state of Moodle (open source, GPL, community supported) is wholly derived from the experience and support of it’s userbase over the years.  Not to mention the fact that a good many teachers and administrators must feel great that the success of their LMS isn’t tied (in any way, shape or form) to the price of a stock.

I don’t think I am going too far out on a limb to say, if the price of Moodle is too high for Blackboard now, then Blackboard has already lost the LMS battle.

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14 COMMENTS

  1. Hi Joseph,

    Aren’t you missing part of the point? I agree on the fact that Moodle is Blackboard’s main rival (at least in the US). I think it’s fair to say that.
    But that Moodle is essentially developed and coordinated by a private company, and all businesses or community around it benefit from (if not “relies upon”) the actions and the good intentions of that private company.

    As we’ve seen through the purchase of Sun by Oracle, its unclear politics about the future of the MySQL, OpenOffice.org, OpenSolaris[1] and Java projects (between others), and the (very) recent patent lawsuit initiated by Oracle on Google for its use of Java in Android’s SDK[2], there are ways to damage an Open Source project, be it through intellectual property or not (just leave the main development team die and you see projects like MariaDB struggling to resurface, but the damage is done).

    The risk is still there to see the project suffer a big blow, and while we might all appreciate the clean moral principles of a strongly convicted Martin, no human is resistant to personal threats of some sort, which I am sure can happen when evil businesses are struggling to find easy solutions.

    So although I agree that it is made difficult, please keep watching the back of Moodle to avoid stuff like that to happen to you.

    I’m sure a lot of Java developers right now must be feeling a bit sick, but never thought before that this could happen…

    Yannick

    [1] http://sstallion.blogspot.com/2010/08/opensolaris-is-dead.html
    [2] http://www.entirelyopensource.com/Blog-and-Opinion/Oracle-sues-Android-hours-after-posing-as-open-source-advocate-at-LinuxCon-this-week

  2. Yannick, you make an excellent point. It’s a bit utopian of me to think that Moodle (and it’s staff) would be totally opposed to lots of $ (despite what they’ve posted on the web) and stranger things have indeed happened; your Sun example is telling.

    I guess, I do think it would be possible for such an acquisition, but unlikely. If in the event of a BB purchase of Moodle, MoodleNews would likely become Dokeos or Sakai News…(i.e. another OS contender would gain a lot of traction and probably quickly)

  3. Well, the Dokeos path seems fried to me (it’s the same risk as Moodle, probably a bit more advanced into the problem already – I know something about it, being its ex-lead-developer).

    In fact, that’s precisely why we started the Chamilo association[1][2], …but that’s a whole other story.

    The only safer conditions for Moodle would be:

    1. have a non-profit association with enough directors to avoid easy attacks (=purchase)

    2. have no legal structure at all and a high number of developers (= intellectual property owners)

    But in any case, having to find solutions to avoid a purchase of some sort would be a sad story for Moodle.

    Yannick

    PS: The lawsuit between Oracle and Google on Java is making a whole lot of noise today. Let’s see what happens there…

    [1] http://www.chamilo.org/en/news/welcome-to-chamilo
    [2] http://beeznest.wordpress.com/2010/01/19/exit-dokeos-enter-chamilo/

  4. Maybe a more interesting scenario might be: Moodle buys Blackboard.

    I wonder what might be the affect of a fund raising campaign, a-la Wikipedia, which raised $6.2 million in 2008 and $7.5 million in 2009 [1]? With $13.7 million, Moodle could buy 394,926 shares of Blackboard at today’s price of $34.69. Admittedly that’s only 14%, but in only a few years Moodle could become the controlling interest in Blackboard. I will also admit, Moodle’s 953,597 “registered users [2], are far fewer than Wikipedias “three million active contributors” [3]. While the number of registered users (those who administer Moodle sites) would obviously be less than average users (the millions of students who use the LMS for course work), I would suspect only the site admins would choose to donate (and only a percentage of those. Using Wikipedia’s numbers: 3 million users = 7.5 million dollars, Moodle might expect to raise $2,383,992. At this rate it would take several years to gain a controlling interest (all while “investing” in your competitor’s product).

    Another approach might be to request (or “license”) current and future Moodle adopters to donate the equivalent of one year’s licensing fees of whatever system they were on prior to Moodle. For example, if an institution was paying $20,000 annually to license Blackboard, that money would be paid to Moodle for the first year of use after implementation. According to North Carolina Community College System’s Feasibility Study Report [4] the average cost savings for implementing Moodle per campus is $21,817, and $11.66 per student. Using these numbers, the above “licensing” approach would yield $1,195,767,953 based on money raised from registered sites (54,809 registered validated sites [5] x $21,817) or $444,907,110 based on the number of users (38,156,699 users [5] x $11.66). Either of these amounts would provide enough to gain a significant interest in Blackboard at its current value of $1,189,520,100 ($34.66/per share x 34.29M shares).

    Thanks,
    Just thinking…

    [1] http://www.readwriteweb.com/archives/75_million_wikipedia_reaches_fundraising_goal.php
    [2] http://moodle.org/community/
    [3] http://online.wsj.com/article/NA_WSJ_PUB:SB125893981183759969.html
    [4] http://oscmoodlereport.files.wordpress.com/2010/08/moodle_feasibility_moottx_aug_10.pdf
    [5] http://moodle.org/stats/

  5. The Future link is definitely relevant (which is why it was posted/linked to in the original post). Thanks for the comment, it’s good to know that the ultimate choice is left to a user’s self-interest (which has definitely been a boon for Moodle thus far).

  6. It’s / Its – please distinguish them. Normally I wouldn’t point it out, but you made the error so many times in this article that I starts to compromise the quality of your prose which is otherwise quite engaging and illuminating.

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