McGraw-Hill Acquires 20% Stake In Area9, The Adaptive Learning Company Behind Its New Smart eBooks

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As a 95-year-old publishing company primarily known for its textbooks, McGraw-Hill is not usually the type of exhibitor one finds at the Consumer Electronics Show, let alone one to make a splash. Nonetheless, the company went to Vegas this year (er, rather its education division, McGraw-Hill Education went to Vegas) to show off some innovative new technology. Again, McGraw-Hill (or textbook publishers in general) not a name one associates with “shiny new technology.”

Yet, for some time now, McGraw-Hill Education and its President Brian Kibby have been on a mission to help the company transition from the dying world of print to digital, “augmented learning experiences” — and help create the eBook of the future. At CES, the company debuted “SmartBook,” its latest efforts in this regard: A digital, textbook for computers and tablets that works online and off. Building on the reservoir of student learning data collected from McGraw-Hill’s educational software suite, the digital eBook purports to adapt to the speed and skill-level of its readers.

As students progress through its passages and answer questions, the eBook tracks and assesses their activity, adjusting to their individual learning path. It highlights passages and offers voice instruction to walk students through the concepts they need to focus on, turning a static process into something dynamic and personalized.

While the debut of its SmartBook showed that McGraw-Hill has recognized how technology is transforming educational publishing and that it’s eager to play a part in the next generation, as is often the case for old world publishers, the technology itself is not entirely its own. The publisher partnered with Danish adaptive learning company, Area9, to develop SmartBooks — the same company and technology behind LearnSmart, McGraw-Hill’s adaptive learning systems that now has over 300 titles, 1.5 million students and has delivered over 1 billion questions to students.

Screen shot 2013-01-23 at 2.12.17 AMEager as it is to set itself apart from rivals like Pearson, Houghton Mifflin and even News Corp and help lead the transition to smarter, digital textbooks, without the technology, the chances of this are slim to none. Thus, it’s no surprise that McGraw-Hill has been anxious to retain the services of its technology partner, announcing today that it will acquire a 20 percent stake in Area9 Apps.

While the terms of the investment were not disclosed, the significant investment is the culmination of a longstanding partnership dating back to 2007. Since then, the two companies have worked together to develop products that bring personalized learning experiences into the classroom, leveraging adaptive technology to make learning more engaging and to help improve student outcomes.

As part of the agreement, the two companies will continue to work together to create new adaptive learning products — “both within and outside higher education,” according to the announcement.

For Area9, which was founded in 2006, the investment allows the company to reward its employees and founders and brings with it the security of knowing it will be able to continue to fund its R&D and will always have a customer. The company began in the early 1990s as part of the research of its founder, Dr. Ulrik Juul Christensen, into adaptive technology’s effect on the inefficiencies in medical training. After years of research and development, the founder applied Area9 technology to education, finding that adaptive tech could solve some of the same problems in learning and make it both more effective and efficient.

“Personalization is the Holy Grail of education,” the founder said in the announcement. “Through our work with McGraw-Hill Education, we’ve developed some of the most exciting technologies in the world in an effort to improve student performance by making learning more efficient … Now, as we deepen our relationship, I’m excited for the possibilities offered by creating new ones.”

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