Mountain View, California — As the market for educational apps and software is rapidly escalating, search engine behemoth Google Inc. is reportedly in talks with educational software companies to help build a marketplace for online learning programs, and plans to sell their programs through its App Marketplace, an industry whose value may approach $5 billion this year.
The Mountain View, Calif.-based company already delivers some games and teaching materials for teachers from companies including Grockit Inc. and Aviary Inc. The company also already provides schools with complimentary word processing, e-mail and spreadsheet programs for students and teachers.
Google already offers schools and colleges its own cloud-based complimentary software programs that include Gmail, Google Docs, and Google Sites. There is also several third-party educational apps currently available through the Google Apps Marketplace, which launched in March of 2010.
Google, the world’s largest search engine, attempts to lure more educational developers and is stepping up efforts to generate revenue from the project, company executives say. This new venture would enable third-party developers with a way to connect with tech-friendly schools and universities. “If we can provide access to education apps to our 10 million users in thousands of schools, then that would be a win all around,” said Obadiah Greenberg, Google’s business development manager for education apps.
The programs accessible in the Apps Marketplace can be run inside the private Web domains that many schools have established with Google, said James Birchfield, instructional technology specialist at Harwich Public Schools in Massachusetts.
“A teacher logs into a Google Apps account and they can access anything in the marketplace,” said Birchfield, who is known by colleagues as the “Google guru.” “It offers you a one-stop-shop kind of thing where we know we can integrate it and we know where it is all saved.”
Aviary Education, one of the first education apps offered on the site, is a gratuitous Web-based applications that lets students edit images and audio recordings in a private environment that can be monitored by a teacher. It is often used by teachers who want students to record class presentations and share them online, said Michael Galpert, co-founder of New York-based Aviary.
“The more that they encourage Google services in the classroom, the larger the audience we get,” Galpert said. The company now gets most of its new customers through Google’s Marketplace, he said.
It is not solely an investment in the minds of future heads of state and would-be Mars explorers. Spearheading an educational app marketplace is also a potentially lucrative business move on Google’s part. Software sales for U.S. schools and colleges this year is expected to surpass the 2009 total of $4.6 billion, according to Parthenon Group LLC, with potential to rise above $5 billion well before the launch of the first manned mission to the red planet.
According to analysts evaluation, Google will report sales of $21.7 billion this year, based on the average of projections compiled by Bloomberg. More than a prospective new source of revenue, the company’s thrust into education could help it build its brand recognition among the next generation of Internet users, said Sandeep Aggarwal, an analyst at Caris & Co. in San Francisco.
Providing “more apps for the education vertical helps them to basically garner a customer for their whole portfolio of products early on,” Aggarwal said. Apple Inc. and Microsoft Corp. have offered discounted prices to schools for 25 years in efforts to “own a new computer user” from the get-go, he said.
Google’s online store for education apps could soon encounter competition from Apple, which has said it will open a version of its popular App Store for Mac computers on Jan. 6.
Apple already has affiliations with educational-software makers. According to data tracker 148Apps.biz, education apps are the fourth-most-represented category in Apple’s App Store, with 24,727 programs, behind apps for books, games and other entertainment.
“Apple has a custom of serving educators,” said Margery Mayer, president of the education division of children’s book publisher Scholastic Inc. With one out of six Americans going to school every day, “it makes sense that if you are a technology company you would be interested in a market that is serving such a large part of the population.”
Google is maneuvering toward a future where it is the broker of all new technology adopted by a school, said Salman Khan, the founder of the nonprofit educational video series “Khan Academy”. His organization has received some funding from Google.
.”If you want to present a new app for students or teachers, the district has to sign up the app once and they would not have to reinstall it for every student,” Khan said.
Currently, most of the revenue generated in the Google Apps Marketplace ends up in the pockets of developers. That is soon to change: In the coming months, Mountain View, California-based Google plans to begin taking a 20 percent share of sales beginning sometime in 2011, Greenberg said.
The new venture could provide a new growth stream for Google, which gets most of its sales from search advertising. However, it is not clear if the educational app marketplace will be subject to the same fee structure.