In a past life, and like many contemporary "Cold Warriors," your editor was trained in the art of "content analysis."  The Soviet Union and "Red China" were closed societies, but they still needed to communicate with their citizens and the world.  Those communications revealed more than what they said on the surface. It's an art form that has proved useful in understanding what is happening inside public education bureacracies, teachers unions and school improvement providers.

PLATO Learning recently announced the decision by the Irvine Unified School Distrct in California "to continue its long-time subscription to PLATO® eduTest Assessment and PLATO® Data Management and Analytics software. Under the agreement, PLATO Learning will continue to provide educational assessment tools to the district that will be used for benchmark tests throughout the school year." The release is a classic example of the value of content analysis, because the tool helps to reveal far more than what's in print. See PLATO's Website for the April 24 Release.

PLATO Learning has been traded on the NASDAQ since 1993.  It's a well known company and, in the context of our school improvement industry, a large firm. Small when measured against the "old" k-12 industry; i.e., the multinational textbook publishers. But with nearly $91 million in revenues in 2006, PLATO is large in comparison to most firms in the "new industry" that work with educators to improve student performance. (Hear new v. old industry as a podcast.)

At a minimum, the renewal suggests that Irvine concluded that the partnership was producing the desired results of school improvement. That's good news. Still, the question on reading this release has to be "so what?" A client is satisfied enough with the work of a large provider to keep going. With a new firm we might expect a press release on every little success. But with an established player, it wouldn't seem like news. In this context, the release reads more like a protest: " No, really, our clients do like our products."

What is PLATO really trying to communicate? What question are they attempting to answer? Who is the intended audience?

In 2001 the firm traded at over $25 per share. Today it's closer to $4. Sales trends have been down, down, down. In 2006 that $91 million in revenues was 26% off 2005 and constitued a net loss of $22.5 milion. The firm has been trying hard to reorganize itself and turn things around.

So, in a sense, PLATO is saying to Wall Street that its products have underlying value and, in a market full of close substitutes, its core clients have not abandoned it. No Child Left Behind is changing k-12 markets from the sale of products and services to the sale of results. In the performance-based evironment that public education has become, "what works" should have a fundamental edge over the status quo. If PLATO Learning has what works, it can rebuild a sales activity around it - if investors don't abandon it at this low point.

David Hlavac of Haberman and Associates, who issued the intial release for PLATO, confirmed much of this in response to the "so what" question put to him by your editor:

"As you know, the ed tech category is fiercely competitive. Many districts are under immense pressure to demonstrate measurable improvement in unrealistically short timeframes. Hence, there often is very little loyalty between purchasers and ed tech purveyors like PLATO Learning. 

Large renewals like Irvine USD represent votes of confidence for PLATO Learning. Renewals show that long-term relationships between purchasers and manufacturers can fundamentally change the way districts conduct ongoing assessment and curriculum development. They also demonstrate consistency and cost savings at the district level, allowing schools to build upon successful software implementations and demonstrate year-over-year academic improvement using a tried-and-true assessment model.

We want to be seen as a valuable, solutions-oriented partner to our customers, not just another software vendor. In our view, Irvine USD's choice to continue its relationship with PLATO Learning is news because the renewal has a solid bearing on the district's instructional roadmap. In fact, the release highlights how Irvine's PLATO Learning implementation "...impacts textbook choices, exam interventions and many other curriculum decisions."

Your editor thinks this straight answer would have made far better reading for both investors and school districts. Still, in order to know why the release was issued in the first place, you'd need to understand the broader context of PLATO's situation on Wall Street. If you are investing in k-12 firms you might. If you are aware of the industry as a potential buyer of PLATO products or a policy wonk interested in the school improvement industry, the release was a good opportunity to explain the importance of acquiring broad industry knowledge. It was also a good opportunity to see why, however self-serving on their surface, press releases are worth reading - once you understand the context in which they appear.