In 1998, it looked as if Pearson had established a launch pad for a new management education business that could compete with, even outstrip, the university business schools. Within five years, that management education business no longer existed. What went wrong?
First, brand value was destroyed. Within two years, all of the acquired brands were dropped, and although their replacement, Financial Times Management, was strong, there was no coherent strategy for transferring customer loyalties from the old brands to the new.
Second, perhaps as a consequence of the rebranding, incomes fell, as the whole proved to be smaller than the sum of its parts. The various niche selling propositions were lost in a grand vision that lacked detail.
Then things started to spiral out of control. Inspired by new market developments in knowledge management and e-learning, and supported by a multi-million pound investment from Pearson, Financial Times Management reinvented itself again, announcing at the end of 1999 that it was rebranding as FT Knowledge, its second major name change in two years, and for most of its existing customers, the third name they’d known their supplier by in less than three years.
Pearson had made a big acquisition of Simon and Schuster, and shoehorned one of its subsidiaries, the New York Institute of Finance, into FT Knowledge. Then came the leveraged acquisition of the much bigger Forum Corporation. Like a car that replaces all its body parts and its engine, it was hard to tell whether this was still the same entity.
It was a confusing time for big publishers. The dot com bubble burst, nobody could explain their e-learning strategy, or why they had spent so much on it to no obvious gain. Ten years after Pitman first embarked on its expansion plan, the company, and most of the value in it no longer existed*, and nobody quite understood why. Pearson, like McGraw-Hill, News International and others, withdrew from e-learning, licking its wounds.
* The original book publishing business continues to thrive within Pearson, mainly under the Prentice Hall imprint.
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