April 3, 2013

Rosetta Stone acquires Livemocha to move into cloud-based technology

During corporate mergers and acquisitions, firms can come together for strategic or financial reasons.

For example, the popular language learning company Rosetta Stone announced this week that it had acquired Livemocha for $8.5 million in cash. The latter organization offers online language courses, while the former is known for its CDs that teach users new languages.

According to the Wall Street Journal, the transaction will allow Rosetta Stone to reach a younger, less affluent demographic. Additionally, it will receive a technology platform that can help accelerate its plan to break into learning markets outside its traditional language segment.

Steve Swad, Rosetta Stone's CEO, said in a statement that his company has been on a mission for 18 months to accelerate its move "from being a language learning company to being a learning company." Swad added that it is also crucial for Rosetta Stone's growth to transform into a cloud-based company, rather than a CD-based business.

"We are in the process of transforming Rosetta Stone to be the most dynamic and ubiquitous technology-based learning platform in the world," Swad said. "Our acquisition of Livemocha will help accelerate that transformation. With Livemocha and its vibrant online community on our side, Rosetta Stone will reach more people and change more lives than ever before."

The technology acquisition will help Rosetta Stone in that Livemocha's cloud platform can let it offer the language packages online, which were only available via disc set, with a complimentary iPad app.

The Wall Street Journal added that 99 percent of Rosetta Stone's customers currently access the company's products over the cloud, and that sales of cloud and online versions are growing at a triple-digit rate.