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Blackboard (NASDAQ:BBBB) keeps its engineers busy. The company's software helps universities with courseware, student collaboration, administration, and even debit card management. With the recent filing of Blackboard's 10-K, let's look beyond the press releases too see why the company made the cut at Motley Fool Hidden Gems.

Blackboard's extensive product line allows for big cross-sale opportunities. That's no easy feat, but the company's sales force knows how to pull it off. It's also a testament to Blackboard's engineers, whose software creations are built to work with diverse modules. The company also thrives on renewals of existing customer accounts. It's maintained a 91% renewal rate for the past two years.

Blackboard had another strong year in 2006. Total revenues surged 34.9% to $183.1 million. A net loss of $10.7 million, or $0.39 per share, stemmed largely from one-time expenses for merger integration and debt repayments.

Diving deeper into the 10-K, you notice that Blackboard demonstrated abundant mojo in growing license revenues. Product revenue for the Blackboard Academic Suite increased by 43.4%, to $27.4 million. This is important, because license revenues often lead to ongoing maintenance fees, and perhaps cross-sale opportunities.

The $178.3 million acquisition of WebCT provided another growth driver. By mid-2007, Blackboard should have fully combined its technologies with WebCT's, creating even more cross-sale opportunities.

Blackboard is also finding growth outside the U.S., expanding international sales 58.4% to $34.7 million last year. The company has translated its software into Spanish, Italian, Dutch, German, French, Japanese, Arabic, and Chinese.

Expect Blackboard to maintain its growth momentum into 2007. Blackboard forecasts first-quarter revenue of $53 million to $54.2 million, and Q1 net income of $0.04 to $0.06 per share. Keep in mind that the company is seasonal, with its main growth quarters in Q2 and Q3.

This is not just a short-term growth spurt. It's a good bet that more and more prospective students will get their education in digital classrooms. A recent Eduventures study forecasts online enrollments of 1.8 million this year, for a total market opportunity of roughly $7 billion.

A variety of technology vendors are trying to get a piece of that pie, including (NASDAQ:ECLG), Plato Learning (NASDAQ:TUTR), ANGEL Learning, Moodle, and Pearson plc (NYSE:PSO). Some even offer their wares for free. But despite these worthy competitors, I think Blackboard retains an edge, thanks to its broad product line and strong brand.

I've used the Blackboard system myself while teaching an economics course for UCLA. I found the system powerful and easy to use, and I've talked to other instructors and administrators who are also fans.

Blackboard realizes that universities rely on references and feedback from faculty, students, and even other institutions. Earning a good reputation can be long and difficult, but that trust is crucial to success, and Blackboard has built up valuable goodwill over the years.

Not content to rest on its laurels, the company continues to launch new products. Its Blackboard Outcome System provides a sophisticated management system to assess the progress of student populations -- a critical tool for schools that want to maintain their accreditation.

Investors seem to have paid attention. Blackboard's stock price increased from $26 to $33 since October. With the integration of WebCT complete, and continued cross-selling expected, it looks to me like the company can chalk up another good year in 2007 -- and an even busier schedule for its engineers.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, holds no financial position in any companies listed above. The Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.