From time to time, I teach courses at UCLA. For the upcoming quarter, I will be teaching an online course, and I'll be using Blackboard's (NASDAQ:BBBB) system to do it. It's easy to use and powerful. Plus, the fiscal fourth-quarter earnings report earlier this week indicates that the company's acquisition of WebCT seems to be working out well.

Fourth-quarter revenues increased from $35.7 million to $51.4 million. Unfortunately, profits collapsed, going from $23.1 million, or $0.79 per share, to $201,000, or $0.01 per share. But keep in mind that last year's numbers had a one-time benefit from a tax adjustment.

Founded in 1997, Blackboard has a comprehensive suite of software products for the education industry. Some of the functions include courseware; student collaboration and research; school administration; and even merchant operations (that is, allowing students to use debit accounts). To build its technologies, it has formed key partnerships with companies like Adobe (NASDAQ:ADBE), Sun (NASDAQ:SUNW), and Oracle (NASDAQ:ORCL).

A big deal
Just about a year ago, Blackboard struck its largest deal by buying out its chief competitor, WebCT. The purchase price was $178.3 million.

Yes, these deals are always tricky. But the good news is that the integration is complete and has been a success so far -- at least according to Blackboard's conference call.

Initially, it was able to find cost savings because of the amount of duplication in both companies. Another key goal was to minimize disruption and potential customer losses.

Now, management is focused on the next step, which is to cross-sell into WebCT's customer footprint. In fact, there are opportunities to sell a variety of products, such as the Blackboard Community System, the Blackboard Content System, and the Blackboard Outcome System.

In the meantime, Blackboard is still picking up new customers (last year, there was a 53% increase, to 3,462) and keeping its current customers happy, with a 91% renewal rate.

Going forward, the company forecasts first-quarter earnings of $0.04 to $0.06 per share, with revenues of $53 million to $54.2 million. As for the full year, the guidance is for earnings of $0.33 to $0.40 per share and revenues of $230 million to $235 million.

So Blackboard is still very much a growth company, and, with the cross-selling opportunities likely to kick in at the end of 2007, the growth is likely to be sustainable for this Motley Fool Hidden Gems recommendation.

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Fool contributor Tom Taulli does not own shares mentioned in this article. The Fool's disclosure policy is taking other disclosure policies to school.