The boom in students pursuing higher education online has been a boon for companies such as Motley Fool Hidden Gems pick Blackboard (NASDAQ:BBBB), which develops software applications for universities. But things have been more problematic for SkillSoft (NASDAQ:SKIL).

The company provides online education for the IT market, which has proven challenging. In the fourth quarter, SkillSoft's revenues declined 3% to $54.7 million, mostly because it sold off its SmartCertify product. Net income for the quarter was $5.9 million, or $0.06 per share, which compares to a net loss of $28.8 million, or $0.27 per share, in the year-ago period. After the effects of charges (such as those related to restructuring, amortization, asset impairments, and deferred compensation), adjusted net income rose from $5.9 million to $8.8 million.

SkillSoft offers a complete learning platform, including courseware, reference libraries, and learning management systems. It offers courseware in 18 languages on topics such as programming, security, database administration, and Web design. There are also courses on soft skills, like human resources and project management.

This high-margin business throws off a fair amount of cash. During the past year, the company's cash balance increased from $64.9 million to $78.6 million. What's more, during this time, the company repurchased $24.5 million in stock.

Unfortunately, SkillSoft's market is, well, difficult. The company must contend with budgetary constraints, resistance to the e-learning model, and fierce competition from companies such as New Horizons Worldwide (NASDAQ:NEWH.PK) and Learning Tree (NASDAQ:LTRE). Moreover, open-source offerings give programmers access to cheap or even free online educational resources.

To boost growth, SkillSoft intends to put more resources in telesales and its direct sales force -- a common move these days among similar companies. Nonetheless, the IT educational market remains a slog, given plentiful competition, relatively slow IT spending in the recent past, and the option for companies to train in-house. SkillSoft's most likely growth option is M&A, perhaps with companies outside its market focus.

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Fool contributor Tom Taulli does not own shares mentioned in this article.