Pearson should be among the walking dead of global media conglomerates, fatally wounded by the shift to digital media. Pearson is the world’s largest book publisher and dominates the market for textbooks, which are facing a competitive attack from inexpensive or even free course material online.
But education has been one of the last holdouts against the onslaught of computing and communications advances, and that’s given this 168-year-old company time to adapt. It grew sales in its education division by nearly 70 percent to $7 billion over the last four years, as profit margins also increased. That alone has lifted the company’s overall results as its other two main divisions—Penguin, a publisher founded in 1935, and the group that publishes the Financial Times—have grown more slowly.
Pearson pulled this off with a decade-long string of acquisitions that helped it shift its emphasis from selling books to selling education services. The London-based company styles itself as the “world’s leading learning company,” even if that learning isn’t delivered through traditional books. These days, Pearson is more like an IT department for classrooms and schools. It sells technology infrastructure, software, and consulting services to schools—services that in turn help deliver the vast stock of textbook content Pearson owns. The company says its revenue from online content and services will surpass those of the traditional publishing business this year.