Media group Pearson claimed yesterday it will become a key supplier of educational content on the web following a tie-up with internet service provider America Online.
The agreement with AOL builds on Pearson's Simon & Shuster division which the group bought in 1998 to make it the world's biggest educational publisher.
Pearson will become the preferred supplier of educational content to AOL and the pair will work together to develop original services aimed at primary school children through to adults. The business which will be licensed to schools may be spun off at a later date.
Shares in Pearson climbed almost 8% to £24.85 following the announcement of the deal and year-end results at the top end of expectations.
The educational network will begin in the US with content tailored to local curriculums. Pearson chief executive Marjorie Scardino, who is also a non-executive director of AOL, likened educational content at present online to rummaging through a car boot sale. "The quality is variable, you don't know if you can trust it or if it is related to your curriculum. We aim to change all that."
The plans are part of the internet strategy outlined in January when Pearson raised £250m to ease its passage on to the web. A handful of investments in dot.com compa nies already operating in the educational sector was also announced yesterday.
Among other plans, FT.com, Pearson's online version of the Financial Times will be relaunched with a marketing drive in the US next week while FTMarketWatch, the online service for retail investors, is poised for launch in Britain.
Last year FT.com tripled revenues to £6m and page views per month to 22m. "The internet is integral to everything we do," Ms Scardino said. "But we are not interested in it for itself but for what it can do for our customers." Pearson's incursions online have prompted a rerating of the group in the past six months and caused its share price to double.
Pearson reported a 15% increase in pre-tax profits to £402m on a 39% growth in turnover to £3.3bn. Revenues from internet-related ventures reached £500m last year.
The Financial Times newspaper raised profits by 33% to £56m but the wider FT group reported flat earnings of £114m after £36m of investment in online operations. Pearson Television increased operating profit by 11% to £68m and Penguin was 35% higher at £65m.
Education, which was transformed by the Simon & Schuster acquisition, is now more than half of the group and posted an operating profit of £257m.
The company announced plans to seek a dual listing for its shares on the New York stock exchange.
