Rosetta Stone

Rosetta Stone to evolve from Language to Learning Company

Rosetta Stone

Are the days of high priced language learning software over? With Rosetta Stone’s latest acquisition it surely looks as if one of the leading companies in that sector is looking for greener meadows.

The $22.5 million all cash acquisition of Lexia Learning reported by the Wall Street Journal is one indicator that language learning isn’t enough to survive in the long term; the quote

“We are evolving the company from a language company to a learning company,”

by Rosetta Stone’s CEO Steve Swad a second one.

Also, customers already are under the false impression that Rosetta Stone is offering far more learning products than just languages. According to the WSJ a survey showed that people already relate RS to math, reading and music products. Swad stated “To me, it’s just evidence of brand permission to extend.”

Of course the acquisition of Lexia Learning also strengthens Rosetta Stone’s position in the K-12 and global English learning market yet we have to see it as part of a far broader strategy to transform Rosetta Stone into a learning company. From the press release

“This acquisition is another step in the transformation of Rosetta Stone,” said Swad. “We`re moving beyond language; we`re leveraging technology; we`re growing our business in new and meaningful ways. And we`re positioning this company to change the face of learning as we know it.”

I think it is pretty obvious to Swad and the team at Rosetta Stone that the days of high priced boxed (or downloadable) language software are numbered. The acquisition of Livemocha earlier this year and therefore the transition to a cloud based language learning portal was a first step here to compete with similar players like babbel.com and busuu.

All three offer language learning products at a fraction of the price customers need to pay for a Rosetta Stone product. Even the current half price offering Rosetta Stone is promoting on Facebook at $395 looks outlandishly expensive compared with the package prices Livemocha, babbel.com or busuu offer.

Rosetta Stone Promo

And we must not forget Duolingo that is slowly but surely becoming a real threat to the startups that aimed to disrupt Rosetta Stone. Duolingo already offers different languages and mobile applications at no cost to the learner. Duolingo also has studies that show the efficiency of its products and the startup is growing fast. Also, the reviews of people learning with the product I have read so far were fairly positive.

Therefore, it seems to be a good idea to find more lucrative niches as soon as possible. Other verticals are yet pretty much untouched from decreasing prices and Rosetta Stone’s brand and technology might enable the company to build up a new foothold there.


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Kirsten Winkler is the founder and editor of EDUKWEST. She writes about Social Media, Digital Society and Startups at KirstenWinkler.com and the future of learning at Disrupt Education. You can follow her on Twitter, Facebook or Google+

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  • Smarter German

    Nice article. It’s surprising that Rosetta Stone is mistaken for more than a language learning platform and I am very skeptical about their course as the competition seems as strong with sites like sofatutor etc. Curious though what they will specialize in. The language platform market seems to be a lucrative business in general. I wonder if they all don’t promise too much. But hey, having paid 15€ for e.g. busuu shouldn’t cause much regret once the user drops it. 395€ therefore surely leaves a painful scar for many.

    • http://kirstenwinkler.com KirstenWinkler

      The difficulty for RS is to appeal to a bigger audience without giving up its premium branding which is in part the high price of the product. The technology they have created over the years is surely capable of more than just language learning.

      The first attempt was the recent launch of an app for early learners. In terms of busuu.com you also have to take Duolingo on the list as they offer decent language learning for free.

      Thanks for commenting, by the way :)