Learning to Buy - Company Business and Marketing

Powered: If you teach them, they will-buy.

When a company called Yahoo is one of the leading lights of the Internet, you wouldn't imagine that the name NotHarvard.com would be much of a liability. But the name, a prelaunch moniker that stuck, was clunky and lacked gravity -- oh, and there's that pesky lawsuit filed by the folks in Cambridge.

So in September, NotHarvard became Powered ("power" plus "education") and got serious about grabbing part of the $1 billion "edu-commerce" market, a profitable niche in the fast-emerging world of online education. The idea is simple: Companies create course work for clients who hope to sell a thing or two to their "students." As Powered turns 2, it's the leader in the field.

With its 119 staffers, the Austin, Texas-based company is cranking out hundreds of online classes in everything from Shakespeare to C++ programming. Clients from Barnes & Noble to Bloomberg to Motorola have embraced so-called permission-based marketing. So far, about 350,000 students have enrolled in courses at 15 online "universities." "It's working well," says Peter Stokes, executive vice president of online education company Eduventures.com. "They're manufacturing stickiness."

Stickiness -- luring customers to spend time on your Web site and keeping them there -- is the ultimate goal of e-commerce. To draw customers to Barnesandnoble.com, Powered built an extensive education site for the bookseller, hiring dozens of instructors to lead classes in areas such as art, literature, science and business. The customers have come -- and they've spent money on books and supplies. For Sharon Hector, a Web designer in Silver Springs, Md., taking a "Communication Skills" class through BN.com fit her schedule and her wallet. Sure, she knows the retailer isn't giving classes away out of altruism, but Hector doesn't worry about the motivation. And she did spend $75 buying recommended course materials online.

That's the real power of Powered. CEO Judy Bitterli says the percentage of students who go on to buy the sponsor's products (known as the customer conversion rate) is in the low teens -- a fantastic return by Net commerce standards.

Powered's sales last year totaled about $3.75 million, and Bitterli says the company will build 15 more edu-commerce sites this winter. Analysts predict the online education market, which includes everything from university degree programs to corporate learning, will grow from $9.4 billion today to $53.3 billion in 2003; $4 billion of this will go to edu-commerce companies. With no IPO plans anytime soon and $34 million in funding lining its pockets, Powered expects to graduate to profitability by 2002. If not, it could always try another name change -- to NotPowered.

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