Ysource shuts down, but its founder remains confident in his vision of school web sites - Internet/Web/Online Service Information - Brief Article

Internet Strategies for Education Markets: The Heller Report, May, 2000

Ysource (Park City, UT; see ISEM, January, 2000) which offered high schools the Yschool portal to home-to-school communications and educational content and offered teens the personalized Yplanet site, has closed its doors. Bill Aho, who was ceo and co-founder, explains that at the 11th hour, a vital round of $15 million in financing unraveled. Initial investors, Crosspoint Venture Partners (Palo Alto, CA) and Utah Venture Partners (Salt Lake, UT), says Aho, remained committed to the business and were prepared to participate in the second round.

With Yschool, the company planned to offer a fee-based portal for schools that, along with calendaring and school information features, offered learning content. Deals had been inked for ACT/SAT test preparation tools and with Boxer Learning (Charlottesville, VA). Aho says the company was ready to move forward with many other content providers.

Primary revenue for the company was planned from advertising and e-commerce on the Yplanet personal portals for teen students. These personal pages integrated school information with lifestyle information, and the split allowed schools to provide an advertising-free site. Aho points out that this model could not be replicated in K-8. Also, His long term strategy would have focused on closer integration with student information systems.

SIS Integration and Application Access Crucial

Aho is now in a unique position to share his views on the competition for education portals and has generously agreed to do so with ISEM. Lie believes that the economic value of a school portal lies not in its advertising, e-commerce or fees from schools but instead in control of the immensely valuable real estate of schools' official web sites. That, he says, puts the portal in the position to control and simplify access to many technologies such as curricular and administrative software. The developers of that software, says Aho, will be willing to pay dearly for placement and integration.

Aho also says that the term "portal" is potentially a misnomer. He believes that the school web site of the future is more likely to be a destination site, full of content and fully integrated with school data. The key, says Aho, is to own the school's central nervous system. Aho anticipates portals to rapidly partner with companies providing student information systems. Indeed, this is the model of many higher education portals such as Campus Pipeline.

Aho believes that it is inevitable that schools will use portals other than the home-grown web page. He describes the current customer base as very interested but a bit leery. Schools will get very excited about something they really like, says Aho. Schools are also well aware that this is an active market, and so they are nervous that there is something out there they are missing. Ysource had all of their Beta users sign on for a second year, but they had not yet sold any subscriptions.

For Aho, commercialism was not really an issue with schools or venture capitalists. Ysource, he explains, gave the school the option of excluding advertising from its school site. He continues to believe that the preferred market approach in education is to deliver superior product and charge for it. Advertising in a place that students need to go, he believes, is still a polarizing approach. Aho adds that when push comes to shove, ad-based sites are likely to bend the rules of their well-intended ad policies for a client who pays well.