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Rosetta Stone Steps Squarely Into Literacy, and Ed-Tech

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The list of companies seeking to build a presence in the educational technology market isn't limited to startups and established textbook-turned-online publishers.

It also includes players like Rosetta Stone, widely known as a major provider of language-learning products, which recently announced its latest foray into ed-tech by acquiring a company that provides online English reading and literacy instructional tools. Rosetta Stone paid $22.5 million for Lexia Learning Systems Inc., of Concord, Mass., which says its reading-proficiency products are being used by one million students.

Earlier this year, Rosetta Stone bought Livemocha, which describes itself as the world's largest online language community, for $8.5 million.

Rosetta Stone, which was founded in 1992 and is based in Arlington, Va., offers courses in 30 languages through a variety of proprietary techniques. The company already has made educational products and services a significant part of its portfolio.

The company estimates that 20,000 schools and districts around the world—16,000 of them are in K-12 systems in the United States—have woven its language products into their curricula in one way or another. About 10 percent of the Rosetta Stone's overall business focuses on K-12, the company told Education Week.

The two recent acquisitions reflect Rosetta Stone's desire to make a continued shift into cloud-based services, and to expand beyond packaged software used on a desktop, Steve Swad, the company's president and CEO, said in an interview.

"For [people] to be learning across devices, the cloud has to be in play," Swad said.

He described Rosetta Stone as making an overall shift from a "language-learning company to a learning company," and said that "K-12 is core to that strategy." The acquisition of Lexia fits that goal. "English language and reading is beautiful adjacency to what we're doing," Swad said. Rosetta Stone's work already includes products offered for English-language learners, he said, another factor that makes Lexia Learning Systems a natural partner.

Nick Gaehde, the president and CEO of Lexia, said the company also would increase Rosetta Stone's ability to provide students and others with personalized learning.

He cited his company's recent launch of Lexia Reading Core5, a cloud-based instructional tool designed to deliver adaptive lessons to pre-K through grade 5 students, adjusting lessons in real time and providing teachers with instructional plans that can be tailored to the needs of struggling students. Lexia describes the program's technology as "assessment without testing."

"We can deliver our program in any way that makes sense to schools," Gaehde said in an interview, and deliver reading and literacy lessons "regardless of schools' technology."


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