Online Education

In August of 2012 the online education company, Coursera, had drawn in a million users, a faster launching than either Facebook or Twitter. Coursera offers free college courses, all of which are taught by faculty members from 33 universities around the country. In less than a year, Coursera has attracted $22 million in venture capital and has created a ton of buzz. The co-founders, computer science professors at Stanford University, watched with amazement as enrollment passed two million last month, with 70,000 new students a week signing up for over 200 courses, including Human-Computer Interaction, Songwriting and Gamification.  

Other approaches to online courses are emerging as well. Universities nationwide are increasing their online offerings, hoping to attract students around the world. New ventures like Udemy help individual professors put their courses online. Harvard and the Massachusetts Institute of Technology have each provided $30 million to create edX. Another Stanford spinoff, Udacity, has attracted more than a million students to its menu of massive open online courses, or MOOCs, along with $15 million in financing. All of this could well add up to the future of higher education — if anyone can figure out how to make money.

Coursera has grown at warp speed to emerge as the current leader of the pack, striving to support its business by creating revenue streams through licensing, certification fees and recruitment data provided to employers, among other efforts. But there is no guarantee that it will keep its position in the exploding education technology marketplace. For their part, Ms. Koller and Mr. Ng proclaim a desire to keep courses freely available to poor students worldwide. Education, they have said repeatedly, should be a right, not a privilege. And even their venture backers say profits can wait.

Right now, the most promising source of revenue for Coursera is the payment of licensing fees from other educational institutions that want to use the Coursera classes, either as a ready-made “course in a box” or as video lectures students can watch before going to class to work with a faculty member.

While there is currently no profit stemming from these online education ventures, the future is still looking bright ahead. Expect to see this trend become the norm.