It's no longer embarrassing to say that you got your degree online; nowadays, even Ivy League schools are going online with some of their courses. That trend is helping companies like eCollege (NASDAQ:ECLG) earn high marks from the market.
In the first quarter, eCollege posted revenues of $27.4 million, a 15% increase year over year. During this time, net income increased from $600,000, or $0.03 per share, to $1.1 million, or $0.05 per share.
eCollege has two main businesses. The eLearning Division helps with online campuses, courseware, reporting, and program administration. During the first quarter, revenues for this division increased 20% to $12 million. Meanwhile, the Enrollment Division's products cover a student's life cycle: lead generation through direct mail, media placement, and online marketing; converting those leads into enrollments; and retaining students until they graduate.
Though education is increasingly moving online, it's not all smooth sailing for eCollege, especially given its rival open-source solutions. If a college has a strong information technology (IT) department -- or smart students -- it can set up its own system fairly cheaply. eCollege also competes with a number of proprietary rivals, especially Blackboard (NASDAQ:BBBB), which has aggressively acquired smaller companies to build a powerful arsenal of solutions. As Blackboard's latest earnings report shows, that dealmaking seems to be paying off.
However, eCollege is more than just simple courseware -- it's a complete solution for schools, whether they offer courses online or in the classroom. As more schools go online, they can leverage eCollege's marketing channels to land students they might not normally be able to attract because of geographic limitations. Also, these schools realize that to compete effectively in online education, they need to use effective marketing techniques. It took time, acquisitions, and heavy investments to create this platform -- but now, eCollege looks poised to reap the benefits over the next few years.
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Fool contributor Tom Taulli does not own shares mentioned in this article.
