Rosetta Stone, arguably the largest language learning company gobbled up five year old Livemocha for $8.5 million in cash earlier this week. That’s a pittance compared to the reportedly $19 million Livemocha has raised in the past. There are a few reasons why it seems Livemocha went out like a garage sale.
LingoLive, a platform for Spanish learning, has a great round up of five reasons why nobody is a winner in this deal.
Still, that said, Rosetta [RST] investors seemed to like the move, which ran the stock up four percent on the day. But there was hardly any volume (no conviction from the herd), and on the week the stock closed roughly flat at $15.40.
Meanwhile, Arlington, VA-based Rosetta Stone also announced they would cut 16 percent of its employees and shutter 56 remaining airport kiosks. Desperate times. But the broader course correction by management is making investors happy with the stock up over 50 percent YTD.
And online language learning is buzzing. Just last week, we saw Babbel‘s language learning platform score $10 million in Series B funding, with a grab for PlaySay. And it’s starting to become a crowded room with Duolingo, Voxy, MindSnacks, Busuu, and LivingLanguage just to name a few. Perhaps they’ll have better exits when they reach their destinations.