Friday, July 20, 2012

How Will Participating Universities Make $ From Offering Free Web Courses on Coursera?

The Chronicle of Higher Education asks the right question.  The CEO of the company admits that he hasn't figured this out and he is a Stanford Engineering Professor!  Perhaps, he should walk over to Stanford GSB's new building and find an economist.  What would David Krebs say?  Pop-up ads?

To quote the Chronicle:

"The contract reveals that even Coursera isn't yet sure how it will bring in revenue. A section at the end of the agreement, titled "Possible Company Monetization Strategies," lists eight potential business models, including having companies sponsor courses. That means students taking a free course from Stanford University may eventually be barraged by banner ads or promotional messages. But the universities have the opportunity to veto any revenue-generating idea on a course-by-course basis, so very little is set in stone.
Andrew Ng, a co-founder of the company and a professor of computer science at Stanford, describes the list as an act of "brainstorming" rather than a set plan. "We have a lot of white boards up around the office where these ideas are being written down and erased and written down and erased," he says. Still, that brainstorm list has some surprises, including the idea of selling course content from universities to companies to use for internal training.
Coursera is following an approach popular among Silicon Valley start-ups: Build fast and worry about money later. Venture capitalists—and even two universities—have invested more than $22-million in the effort already."
So, this is similar to the Facebook Problem.   Students do expect to pay tuition for a quality education.  I bet that these guys will soon charge for each course --- especially if you demand a "diploma" showing that you mastered it.  
From the participating Universities' perspective, will giving away free material increase demand to attend there?  Is this a repeat of Glaeser's old thesis that information technology is a complement (not a substitute) for cities (i.e being at a University).   As a University employee, I hope so!