In a surprise move, the non-profit Graduate Management Admission Council (GMAC) has purchased for an undisclosed sum a business school website in the United Kingdom known as BusinessBecause.
Faced with growing competition from the Educational Testing Service’s GRE exam, the administrator of the GMAT test said it made the acquisition “to build a stronger pipeline of prospective students” for itself and business school clients.
It is the second acquisition by GMAC Chief Executive Sangeet Chowfla, a former executive of Hewlett Packard, who assumed his role as CEO in January of 2014. GMAC acquired a rival entrance exam used in India for an undisclosed sum in 2015. The exam, taken by roughly 45,000 test takers annually, was purchased outright from the Narsee Monjee Institute of Management Studies (NMIMS).
A DEAL TO ACQUIRE MORE INFO ON PROSPECTIVE STUDENTS EARLIER IN THEIR JOURNEY TO BUSINESS SCHOOL
As part of its business model, GMAC routinely sells the names, addresses and emails of GMAT testtakers to schools for marketing purposes. In 2016, the latest year for which data is available, GMAC sold 17,651 searches of its database for potential business school candidates to school members who can search on the basis of GMAT scores, location and program preference. In 2016, GMAC reported revenues of $85.0 million on its tests and another $7.6 million from school and student products.
GMAC, however, can only gather that information when a potential student registers on its own website. Typically, those registrations can occur as long as 18 months after a prospective student enters the consideration stage for a business school program. By the time candidates register to take the GMAT test, most of them already have decided which programs they will apply to, making GMAC’s current database less useful to business schools.
The decline in GMAT marketshare to rival test GRE, moreover, has further eroded the usefulness of GMAC’s database of prospective students. The acquisition would allow GMAT to move further upstream in a student’s consideration cycle and capture some of those lost candidates to GRE because BusinessBecause requires users of its website to register for full access. The website claims to have roughly 40,000 registered users, though a significant percentage of them are already business school students or alumni.
MOST USERS OF THE SITE BASED IN EUROPE
In its news release, GMAC said the website will operate “as a separate subsidiary and retain editorial and creative independence,” while GMAC will provide it with the resources necessary to scale its operations. A spokesperson for GMAC told Poets&Quants that the organization may also take some content from its newly acquired website and post it on MBA.com, GMAC’s internet property to draw more traffic.
“Consistent with its mission, GMAC is actively committed to providing new solutions that help candidates and schools discover, evaluate, and connect with each other,” according to GMAC. “It’s estimated that at any given time, more than two million candidates are considering a graduate education in management. Unfortunately, the majority abandon their search along the journey, which can be overwhelming and hard to navigate.”
The acquisition was completed on April 10, 2018. The webiste was launched in late 2009 by co-founders Kate Jillings, Maria Ahmed and Sian Morley-Smith. The site acknowledges that stories it publishes are sometimes “sponsored content” and feature schools that pay to for that content. “We do this to pay the bills, as we’re a self-funded start-up,” according to the website. “Read the stories and hopefully you’ll agree that they’re not shameless puff pieces, and they’re informative and well-written.”
According to Alexa, which monitors website traffic, GMAC’s new property gets most of its traffic from European countries, with the United Kingdom accounting for 22% of its pageviews alone. Slightly more than 4% comes from Germany. India accounts for 22% of the site’s traffic, while 34% hails from the U.S.