The Financial State of the Union

The Education Industry Investment Forum has created a survey that asks for your opinion on the current financial meltdown?

Who is to blame? What happened?

Click Here to take survey

Where will this take us?

Click Here to take survey

Have we started a global recession?

Click Here to take survey

Results will be posted Tuesday afternoon.

Wachovia Did Not Fail, But Citigroup Takes Them Whole

It happened over the weekend. Wachovia and Citigroup worked with the government to secure another stunning transformation in banking caused by the subprime collapse.

According to an AP story, Citigroup will buy Wachovia's banking operations.

Citigroup Inc. will acquire the banking operations of Wachovia Corp., one of the nation's largest banks, in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.

The FDIC asserted that Wachovia didn't fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

Of course they didn't fail. Citigroup bought their US$42 billion in losses.

Notice that a government entity becomes a shareholder in a bank. Someone please correct me if I am wrong, but is this normal?

Wachovia to Merge with Citigroup?

Wachovia has started talking to Citigroup about a possible merger.

Friday's Panelists

Just before the weekend, but not before you are ready to leave your desk for home, here are some new commitments to the panels in March 2009.

The Education Industry Investment Forum proudly welcomes:

Vishal Garg, Founder, MyRichUncle.co
Mark Pelesh, Executive Vice President – Legislative and Regulatory Affairs, Corinthian Colleges
Jennifer House, President, Red Rock Publishing
Dayna Stewart, CEO, Camelot for Kids
Karen Symms Gallagher, Dean, Rossier School of Education, USC
Cathy Snood, Assistant Director, Huntington Junior College
Barbara Dryer, CEO, Connections Academy
Joy Smith, Director – Business Development, Florida Virtual Schools
Alfred DeSeta, President and COO, Penn Foster College
Kenneth Hartman, Academic Director, Drexel eUniversity Online
Michael Connelly, CEO, Mosaica Education
Toby Chu, CEO, CIBT Education
Rex Bird, President, Laurel Springs School
Michael Cooney, Chairman, Wisconsin Education Aids Board
David Dies, Executive Secretary, Wisconsin Educational Approval Board
Jo-Ann McDevitt, Vice President – Sales, Marketing and Business Development, Association of Education Publishers
Jeff Shelstad, Co-Founder and CEO, Flat Earth Knowledge
Christopher Stephen, CEO, Read How You Want
Neil Goff, CEO, Weekly Reader
Sandy Fivecoat, CEO, We Are Teachers
Michael Ross, Senior Vice President, Encyclopedia Britannica Online
Tricia Roth, Managing Director, Read How You Want
Malgosia Green, CEO, LearnHub

Today's New Panelists

EIIF announces some new panelists for the upcoming EIIF

The Forum will be held March 9-11, 2009 in Phoenix, Arizona.

Stay tuned for tomorrow's acceptances, we have some great speakers we will announce on Friday

Key Experts in Lending, Analysis, Investment and Strategy, Including:

Todd Nelson, CEO, Education Management
Mark DeFusco, Managing Director, Berkery Noyes
John Ebersole, President, Excelsior University
Stuart Udell, CEO, Penn Foster College
John Chubb, President, Edison Learning
Dr. Yoram Neumann, President and CEO, TUI University
Peter Leyton, Partner, Ritzert & Leyton
Michaël Bijaoui, Managing Director, MESA
Susan Wolford, Managing Director, BMO Capital
Michael Musante, Director – Government Relations, Edison Learning
Mark Jopling, Managing Director, Jopling Associates
Larry Brown, CEO, Beam Reach Education
Michael McQueeney, Managing Director, Summer Street Capital
Arthur Benjamin, CEO, ATI

China Banks Told to Stop Lending to American Banks

China tells its banks to stop lending to American banks for now.

I had earlier written on another blog that China's Central Bank was suffering from a potential lending crisis.

EIIF Announces New Speakers for 2009

The following speakers are coming to EIIF in Phoenix March 9-11, 2009:

Mark Kantrowitz, Founder, Finaid.org
George Bernstein, CEO, Nobel Learning Communities
Howard Block, Managing Director, Knowledge Investment Partners
Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III
Mark DeFusco, Managing Director, Berkery Noyes
Peter Leyton, Partner, Ritzert & Leyton
Ted Mitchell, Managing Director, New Schools Venture Fund
Charles Thornburgh, President, Kaplan Virtual Education
Matt Leavy, CEO, eCollege
Daniel Pianko, Principal, Noah Fund
Rita Ferrandino, Managing Director, ARC Capital Development
John Katzman, CEO, 2Tor and Founder of Princeton Review
Jordan Goldman, Founder, Unigo.com

and there are over 45 other names.

Stay tuned to the blog for the agenda, and please consider your company for a presentation at the 2nd Annual FuturEd Symposium where you could be one of five innovative companies presenting to investors.

You can also visit our homepage for the latest in registration news, and administrative information.

A white papers site is coming soon. That will be a one-stop resource for all of the information you need to stay ahead in the education industry.

FuturEd Symposium, Year 2 Application Online

If you want to present your company to a forum filled with investors, analysts and high-level executives in the for-profit education industry, you can fill out an application and send it to the conference production team at the Education Industry Investment Forum.

We'll gladly take a look.

Michael Milken Offers $186M for Nobel Learning

A phone call yesterday alerted me to the recent bidding action of Michael Milken for Nobel Learning Communities.

The Price: $186M, valuing Nobel at $17 per share, a little more than 33% over Nobel’s Friday closing price of $12.74.

That's evidence that even in a worsening economic climate, childhood care and learning is vital, valuable and can attract a premium.



Milken, who graduated from the Wharton School at the University of Pennsylvania, already owns a significant share of Nobel.

KLC of Portland, Ore., has more than 1,800 centers in 38 states serving more than 200,000 students under the Kindercare/Knowledge Beginnings and Childrens Creative Learning Centers names.

KLC’s parent, Knowledge Universe Education of Santa Monica, Calif., was founded by former junk-bond magnate Michael Milken and his brother, Lowell Milken.

Blesbok LLC, which Michael Milken manages, owns a little more than 3.86 million shares, or 37 percent of Nobel, according to Yahoo! Finance and Securities and Exchange Commission documents.

Unigo founder Jordan Goldman

Jordan Goldman, who founded Unigo by taking a business plan stencil from the Internet and filling in the blanks, now threatens to unseat the dominant college guidebook publishers with a free service that collects student-created reviews of their own schools and presents them to high school students looking for information they can't find in school-sanctioned info sessions.

A tremendously creative idea, but is it seasonal only? And will it be relegated to only offering reviews? It looks like the perfect platform for creating a social network scene like Facebook. Facebook, if you remember, was used only by students in universities before it was opened to include anyone who wanted to register. Currently, Facebook has over 100 million users.

It would be interesting to see Unigo slip into this domain and take audience share from Facebook.

Five Questions with John Katzman

John Katzman, CEO, 2Tor

New Speaker for Education Industry Investment Forum

EIIF is proud to announce that
John Katzman, the iconic founder of Princeton Review and the entrepreneurial energy behind the new 2Tor.com, will be speaking at the forum in March.

We ask him five questions about the industry:

EIIF: What act of strategic investment in the education industry by any player in the past five years do you admire the most, and what was its outcome?

John Katzman: Denver Public Schools investment in teacher comp reform. So far, so good—most teachers like it, and performance is up; I think this will prove a useful way-station.

EIIF: What industry genre will have the most influence in the future of education over the next five years?

JK: For-profit and hybrid colleges.

EIIF: If you could name any industry within education that requires the most change, what industry is it and what changes do you think it needs?

JK: Student finance. More transparency and simplicity.

EIIF: What inspirational idea outside of education has had a dominant effect on how you do business?

JK: Apple, which proves that product matters.

EIIF: For an education company or for profit school that is looking to grow, what is the one thing they need to be prepared to do before meeting investors or before launching their product or service into the marketplace?

JK: Explain how they will achieve both financial and educational excellence.

Digital Media and Learning Competition

Are you thinking of applying for the second annual Digital Media and Learning Competition?

HASTAC and the MacArthur Foundation held the first Digital Media and Learning Competition in 2007. A total of two million dollars was awarded to 17 projects representing compelling work in the field of Digital Media and Learning.

The second (2008) Competition similarly seeks to mobilize the field of Digital Media and Learning through a $2 million open call, supporting learning entrepreneurs, educators, communicators, and innovators. The Competition supports pioneers who use new technologies to envision the future of participatory learning.

The theme for this year’s Competition is Participatory Learning. Awards will be made in two categories: Innovation in Participatory Learning, and Young Innovators, a special category designed to promote the contributions of 18-25-year-old innovators to digital media and learning.

If so, we would like to talk to you.

Please contact Douglas Crets at dcrets [at] iirusa dot com.

Plurk and Brightkite

Two new web and mobile applications that will expand your professional and social networking horizons...

Plurktakes the Twitter example and puts it on a graphic time line, but allows your friends and acquaintances to react to your "plurks." The idea is visually stimulating and it is very easy to meet new people using the technology.

If you are familiar with Mini Hovels, which are sponsored at Korean web company CyWorld, then you will get this. You can design your own Plurk page and look great doing it!

Brightkite is an invite only mashup of mobile phone images, GPS location beacons and Google maps, among many other things. The application will keep track of where you are, show you on a map, and even offer a 360 Google Street View of where you are.

You can also do what you do on Twitter, typing in updates as they happen.

The American Economy: How Bad Is It?

Do you agree with these sentiments published in the German Der Spiegel this morning?

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that's changing. Bear Stearns, Lehman Brothers, Merrill Lynch -- overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and -- at least in Morgan Stanley's case -- have prepared themselves for the end.

"Nothing will be like it was before," said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. "The world as we know it is going down."

Or is it just hyperbole usually found in newspapers and magazines when market panic sets in?

The most breathtaking aspect about this week's crisis, though, is that the life raft -- which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac -- is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

"I fear the government has passed the point of no return," financial historian Ron Chernow told the New York Times. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams."

The story can be found here: Time to panic?

CGI Boosts Teacher Procurement Process in Canada

California company Ariba is helping out with a procurement system for the entire Ontario school system.

In the first phase of the marketplace, CGI will assemble an electronic retail environment in which educational institutions can order various goods and services. In the second phase, procurement groups will be enabled to issue and execute requests for proposals for major purchases.

"CGI was selected as our partner because it has demonstrated an understanding of OECM's vision and has the depth of experience that comes from successfully managing other electronic marketplaces in both Canada and the United States," stated Frank Erschen, acting president of the Ontario Education Collaborative Marketplace.

There's a non-profit in China that is doing this for the energy industry. I know that's not education, but I'd thought I'd put that out there.



CGI to build and run Ontario public education 'marketplace' in $40M contract