Joel Klein announced that, upon leaving the NYC Department of Education, he will work for Rupert Murdoch’s News Corp, heading up a new online for-profit education venture. A few days later, it was revealed that News Corp had purchased Wireless Generation, a company that received millions of dollars in no-bid contracts from the Department of Education to operate their online learning project, known as the ” School of One” or “the Innovation Zone.” And before leaving office, Klein had already announced the city’s intention to radically expand online learning to four hundred of the city’s public schools over the next few years, with no proof of any positive effect on learning. In order to fund this expansion, the city has proposed to add one billion dollars in extra spending for technology in the school capital plan.

Cathie Black refused to respond to reporters who asked her if she would send her own children to a New York City public school if she had to do over again, and instead repeated the mantra of parental “choice.” But the implicit policies pursued by Bloomberg, which she has announced her intention to pursue, in effect prevent parents from being able to choose a public school for their children with reasonable class sizes.

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K-12 education has earned a reputation for a slow rate of innovation, analysts and industry executives say. Less than 2% of annual spending is on technology, compared with 4% in health care and 5.5% in construction, said Michael Moe, founder of Next Up Research.

But there are signs that the tide may be turning. Since April, almost $600 million has been pumped into online learning initiatives by a stable of investors that includes venture-capital firms Kleiner Perkins Caufield & Byers, Sequoia Capital and Benchmark Capital, as well as News Corp., Mr. Moe said.

“I do believe what’s going on now is creating the type of environment where you’ll see rapid change and outsize opportunities,” he said.

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Berkery Noyes, a leading independent investment bank serving the education, information and technology markets, announces that it represented Compass Knowledge Holdings, Inc. of Orlando, FL, in its merger with Embanet Corporation.  Effective today, the new entity is operating under the name Embanet-Compass Knowledge Group.  Since 1993, Compass has partnered with top-tier, not-for-profit academic institutions to help them plan, implement and operate successful online academic programs.  Compass provides the entire complement of online learning support services – including market research, program marketing, student recruitment, instructional design and technology, student retention support, faculty training and support, technical helpdesk, and online bookstores – enabling their partners to concentrate on delivering high-quality academics.  Founded in 1995, Embanet is a global leader in providing a full range of online learning services to postsecondary educational institutions. Embanet preserves academic integrity and maximizes student enrollment and graduation by providing capital and expertise in program development, marketing and enrollment, student services and technology support.  Financial terms of the transaction were not disclosed.

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