Key Curriculum, a former textbook publisher that recently restructured its business around math technology tools, validated that transformation strategy today, announcing it’s been acquired by education publishing giant McGraw-Hill Education.
By the end of the year, McGraw-Hill will integrate its own digital offerings with the technology behind Key’s three central products: Geometer’s Sketchpad, a math visualization software used in about half the high schools in the U.S.; Fathom, a data analysis tool; and TinkerPlots, a data visualization application. Plans are still preliminary, but the technology could be used in something like McGraw-Hill’s iPad textbook. Or, theoretically, students could learn McGraw-Hill’s math curricula through interactive tools developed by Key. New digital products will be developed in the future, both sides of the deal said.
Key will retain its management structure, remain in its Emeryville, Calif., office, and continue to sell its products independently from McGraw-Hill. Key had been privately held by Springer Publishing, a leading creator of science content based in New York City. Terms of the McGraw-Hill deal were not disclosed.
The acquisition comes just two years after Key began to shed its print textbook programs, which it had published for 30 years, to focus on its technology products. I wrote about Key’s print-to-digital transition in early June as a case study on the changes of the educational publishing industry.
About five years ago, as school budgets grew tighter, Key began losing a number of textbook contracts, leaving the business unprofitable. After it decided to refocus on the popular, but neglected technology it also produced, the company devised a major overhaul. Two-thirds of staff were eventually laid off.
“We knew we had to do something more fundamental than just hang in,” Karen Coe, president and CEO of Key, told me at the time.
To illustrate its dire straits and need for change, the company held an event at its office and led employees around to different-themed rooms. In one room, employees were shown a map of the United States filled with toy soldiers. Fifteen of the soldiers represented Key’s share of the textbook market. The “Big Three” publishers that make up 85 percent of the K-12 textbook business—Pearson, McGraw-Hill, and Houghton Mifflin Harcourt—were represented by 400 soldiers each.
Coe noted the irony that now 400 of those toy soldiers are on Key’s side.
“When you have a life dedicated to small entrepreneurial ambitions, the large players are seen as out there and distant,” Coe said in a phone interview Thursday. “When you sit down at a table with some people you realize you’re not that different.”
Talks about acquiring Key have been going on since spring, after it realized its renewed focus on technology tools made it a good fit for larger companies looking to adapt their products to increasingly digital instruction. McGraw-Hill is in the midst of an executive shake-up and plans to make its education division an independent company, with technology as a focus.
“It’s clear to us that powerful digital tools for math instruction will be increasingly important,” said Vineet Madan, senior vice president of New Ventures & Strategic Services, in a phone interview. “There’s not many companies that do that well,” he continued.
As I’ve written about before, even publishers aren’t satisfied with the level of innovation that digital content offers; Key’s software could be a step in making McGraw-Hill’s offerings more dynamic, putting technology at the center of the product and filtering the content through it.
“The market is taking technology once living at the fringe and bringing it central,” Coe said.
As of 2:15 p.m., McGraw-Hill’s stock prices on the New York Stock Exchange remained about stagnant for the day, at $46.66.