Rosetta Stone acquires Livemocha for $8.5 million

There have been several revealing articles in the press about this purchase. For a start, Live Mocha has burned through more than US$14,000,000 of investment funding without making a profit. Hence the $8,500,000 isn’t going to be making anybody rich: it will not even return the original investment. They do have, though, around 16 million members. Of course, they have failed to make any money out of them. Senior people at Rosetta Stone, however, said they in turn have excellent systems in place for transforming existing members into paying clients, and for offering tailored bundles (such as on-line tutoring) for extra fees with a high pick-up rate. They also mentioned that most of the users of Live Mocha are individuals, whereas the on-line offerings of Rosetta Stone have mostly appealed to organisations. This buy out gives them large numbers of users in both groups.

Acc. to this, Rosetta Stone Buys Up Online Language Learning Community Livemocha For $8.5M In Cash | TechCrunch , their CEO, Steve Swad, says: “With Livemocha and its vibrant online community on our side, Rosetta Stone will reach more people and change more lives than ever before.” Yeah, well, right. First they have to get the communtiy on their side, I would say.

@Jones, I agree that Youtube was already exciting back then but it has come a long way since then. Many people at the time wern’t sure they were worth the 3-4 billions they paid for it.

Regarding the Livemocha story, I guess what bothers me most is that some companies manage to successfully sell products that are of very little use. And this goes for many other industries as well, for example the dieting/fat loss industry and many fitness gadgets as well. I have been shown the RS software when I was learning Chinese and I cannot imagine getting anywhere using that product.

RS caters to the millions of novice learners who can visualize themselves speaking another language but do not realize that it actually takes hard work to get there. I wonder whether there has been any documented case where RS users reach a high level of fluency using only their product. I also wonder whether anyone of the RS management team is multilingual.