Back in 2004, Tim O'Reilly of O'Reilly Media notably dubbed the Internet's revival the era of "Web 2.0". Web 2.0, he noted at the time, was a marked change in direction from the days of the dot-com bubble. In 2005, when O'Reilly sensed that people started using "Web 2.0" as a buzzword without fully understanding what it actually represented, he clarified that the term as seven principles from "early success stories of web 1.0 and by the most interesting of the new applications": Web as a platform; harnessing collective intelligence; data is the next "Intel Inside"; end of software release cycle; lightweight programming models; software above the level of a single device; and rich user experience.

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That list may seem like a mouthful, but there are currently some businesses in the education realm demonstrating O'Reilly's principles in clear and compelling ways. The e-learning market, which is the use of technology to aid or supplement learning (usually through computers), has been projected to surpass $52.6 billion by 2010. Specifically, the test preparation business, once dominated by such recognizable names as Kaplan and Princeton Review, has emerged as a market ripe for competition from web businesses.

Online test prep start-ups have been on the market for years, but the innovations of more recent entrants such as Grockit, Knewton, and iKnow stand out, harnessing cutting-edge research in psychology, cognitive science, computer science, and even artificial intelligence. Knewton provides user-adaptive preparation for the LSAT and GMAT, and iKnow is an application focused on SAT and language studies that employs memory and psychology research to personalize lessons for the user.

Grockit is a particularly illustrative example of O'Reilly's Web 2.0 principles. The company specializes in online collaborative learning games and studying/tutoring environments with which students can prepare for the SAT, MCAT, LSAT, GRE, and ACT. It also works to integrate elements of artificial intelligence (A.I.) with their services to better adapt to students' unique needs. Click here to read my interview with Grockit's Ari Bader-Natal for more about the company's work and the field of adaptive and online learning.

By providing immediate access to these tools online (the "Web as a platform" principle), Grockit challenges older business and distribution models of static test prep guides and PC software.They also have the ability to utilize "real time monitoring of user behavior to see just what new features are used, and how they are used," as O'Reilly puts it. Because they need only increase their website infrastructure to take on new users, Grockit is providing a service that O'Reilly would likely refer to as "cost-effective scalability."

Additionally, Grockit embodies the principle of a "rich user experience." O'Reilly says, "Companies that succeed will create applications that learn from their users," and Grockit thrives off of what he refers to as "the richness of data." Grockit's attempt to combine peer collaboration with A.I. to produce as successful a test prep model as possible is clearly an effort to provide a rich user experience, if not also an effort to provide students with the best test score outcome -- which, in turn, will help Grockit grow as a business.

Competition and innovation from companies such as Grockit can only be good for students. Test prep may still be expensive, but lean start-ups seem to be shaking up this industry, forcing Kaplan and the like to launch online efforts of their own while offering competitive fees. Recession-spurred price sensitivity and a possible influx of students should crystallize the short-term opportunity, and the market leaders aren't guaranteed to adapt smoothly. "Native Web 2.0 companies enjoy a natural advantage, as they don't have old patterns (and corresponding business models and revenue sources) to shed," O'Reilly notes.

This is not to say that the original test prep giants have not successfully attempted to get online, nor are they hurting financially. To be sure, Grockit and other test prep start-ups are still operating on the fringes of their market in many ways. However, their disruptive potential is clear. As students, any advantage on the education front (and the bank account front) is a welcome development.


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