By REBECCA QUICK
Staff Reporter of THE WALL STREET
JOURNAL
Barnes & Noble.com Inc. is building a college campus in -- where else? -- cyberspace.
Tuesday, the company will unveil plans for Barnes & Noble University, a section on its Web site that will offer thousands of free "distance-learning" courses on topics from how to start a home-based business to how to plan a wedding.
Much like the book clubs and author readings at real bookstores, the classes aim to lure traffic to Barnes & Noble.com and thus increase its sales. While the courses don't require the purchase of books, many of them will be framed around a particular author's work, be it a reference book or a Shakespeare comedy.
"This adds an element of community for us," says Steve Riggio, vice chairman of Barnes & Noble.com. "Plus, it's a great channel for authors to build their own brand and sell more of their works."
To launch its online university, Barnes & Noble.com is buying a minority stake in notHarvard.com (www.notharvard.com), an "eduCommerce" company that provides distance-learning software packages for e-commerce sites. While Barnes & Noble won't disclose the size of its investment, people close to the situation say the amount is between $5 million and $10 million.
EduCommerce (a term coined by notHarvard) is based on the notion that learning and product sales can be easily linked. While Barnes & Noble.com is hewing the somewhat traditional idea that course work and books go together, notHarvard takes the concept a lot further. For instance, notHarvard sees an eventual market in, say, a home-improvement retailer offering courses in landscaping, which could then lead to sales of everything from lawn mowers to weed killers to flower pots.
"Education can be a very powerful selling and marketing tool," says Mike Rosenfelt, founder of notHarvard, based in Austin, Texas. "The more customers know about a product, the bigger evangelist they become."
Book Learning Courses from Barnes & Noble University:
Students won't get a degree from Barnes & Noble University or any of notHarvard's other clients. NotHarvard, in fact, is quick to admit that its courses don't match up to those from the real Harvard University in Cambridge, Mass. "Of course it's not a supplement for a real college" says notHarvard's Mr. Rosenfelt. "It's in no way competitive."
(Harvard University says its lawyers are looking into "this very striking similarity of names.")
Barnes & Noble.com's move illustrates the lengths to which Web retailers are going to go to win customers in a savagely competitive, overcrowded marketplace. A rash of e-commerce start-ups have been forced to close shop in recent weeks, from online toy seller Toysmart Inc. to online retailer Violet.com.
Simply advertising heavily to build name recognition hasn't been enough for many e-tailers. There is a mad scramble to improve the "stickiness" of Web sites, that is, to get Internet customers to come to a site and stay there long enough to make a purchase.
Analysts agree that it's easy to go unnoticed in the vastness of cyberspace. "I absolutely believe that every company needs to have something that makes it stand out, particularly when you're not the clear No. 1" retailer in a category, says Ken Cassar, senior retail analyst at Jupiter Communications, a New York research firm.
Still, Barnes & Noble.com and other retailers using eduCommerce face a risk that they are paying to offer a service that won't necessarily lead to any increase in sales.
"Consumers may do their research on that site and then make their purchases on [the site of] a lower-cost competitor," Mr. Cassar warns.
Here's how it will work at Barnes & Noble University: In midsummer, consumers can begin registering for about 30 classes, which will start about a month later. All students get a Barnes & Noble mailbox so they can begin exchanging e-mail with other students from the class roster. They also get an online notebook for taking notes and a Web calendar for keeping track of when homework assignments are due and when class discussions will be held.
The classes will range from one-day live seminars to extended courses that last up to 12 weeks. Most of the extended courses are asynchronous, meaning students don't have to show up at a particular day or time. Instead, they can show up anytime during the week to pick up readings and homework and can e-mail the professor with questions.
Other clients of notHarvard include recruitment Web site Jobs.com Inc. (www.jobs.com), which offers career-enhancement courses such as computer programming with the software, and Motorola Inc.'s Metrowerks unit, which makes software-development tools and also uses notHarvard's software to offer computer-programming classes.
Barnes & Noble.com, in which Barnes & Noble, Inc. and German publisher Bertelsmann AG each own a 40% stake, is one of several investors in notHarvard's second round of financing, which the software company is expected to announce Tuesday raised a total of $26 million. Other investors include Adam Dell's Impact Venture Partners and a Merrill Lynch & Co. employee-investment fund.