Since launching in 2008, the adaptive learning company, which takes a data-driven approach to personalizing learning, has partnered with less than a handful of other publishers, including Pearson, Wiley and Houghton Mifflin Harcourt. Its latest partnership shows that its not only making headway in the domestic K-12 and higher education markets, but that it’s extending its reach overseas and among markets that have been slower to go digital.

“Today, ELT [English Language Teaching] is all offline,” said David Liu, Knewton’s COO. “[Macmillian is] creating content for the digital experience from scratch — not only the educational content, but the assessment content.”

Over time, Liu said, the partnership will extend to other Macmillan content, not just that for ELT. But, to start, Macmillan will build on Knewton’s adaptive learning platform to provide personalized grammar and vocabulary lessons, exam reviews and other kinds of content to ELT classrooms, as well as individuals, across 120 countries.

In the increasingly hot adaptive learning space, Knewton isn’t the only game in town. Dreambox Learning, McGraw-Hill and Cerego are a few other companies pitching various approaches to customized digital learning experiences for K-12 students, colleges and individual learners.

While Knewton offers some evidence of its success – in a 2011 program of 2,000 remedial math students at Arizona State University, the company said, withdrawal rates dropped by 56 percent and pass rates climbed 11 percent – it’s still early days for adaptive learning and some learning experts say more proof is still needed.  Still, Knewton is growing steadily. By the end of last year, the company, which has raised $54 million, reached about 500,000 and it expects to reach 5 million students by the end of this year.

On Wednesday, Chegg, which now bills itself as an online “student hub,” said that it is partnering with ed tech darling du jour, Coursera, to provide digital content, including textbooks and other materials, to students enrolled in its massive open online courses (MOOCs).

Through the partnership, Coursera students will be able to purchase Chegg material, as well as receive some publisher content for free. They will also be able to make use of other Chegg features, including Q&A forums, search and highlight options. Coursera students could still purchase content from other sources, but the company said it offers lower prices than other vendors and students wouldn’t benefit from the social options connected to Chegg content.

The companies declined to share financial details of the deal. And, when asked whether similar partnerships with other MOOC providers edX and Udacity might be on the horizon, CEO Dan Rosenweig said, “Our vision is to become the leading connected learning platform… We’re not going to limit ourselves to anything.”

MOOC providers have faced more vocal challengers in recent months, but this deal underscores their steadily growing influence. Even if their completion rates hover around just 10 percent, Chegg clearly wants to be able to get in front of the millions of learning-focused eyeballs that are being drawn to Coursera.

Until now, Coursera professors have only been able to require supplemental content that is available for free on the web and recommend textbooks. Chegg said it will enable the MOOC provider to make some publisher-created content available for free during the course. Students will then have the option to purchase the full eTextbook from Chegg for continued learning after the course.

As of the partnership’s launch, just two courses will offer Chegg content but, over the next few months, the companies said it will expand to several dozen of the site’s 370 courses.

Launched in partnership with the American Graphics Institute, the new site provides a marketplace of video tutorials and digital books for learning about creative software, web design and development and office applications. Video tutorials range from newbie-level instructions on how to play music and video on your iPhone to more advanced lessons on using CSS with Dreamweaver.

Like competitors in the space, Digital Classroom targets individuals looking for professional advancement, as well as personal enrichment, and it is looking to snare enterprise clients. Wiley’s move into this space underscores the opportunity companies see in helping individuals and corporations acquire new skills needed to compete in a rapidly changing economy.

Even though other companies already provide software training courses online, Barry Pruett, vice president and executive publisher for Wiley Professional Development, said his company believes it can compete on price ($20 a month or $10 a month with an annual subscription, compared to lynda.com’s starting price of $25 a month) and customization.  Enterprise clients can create their own sites that include the content most appropriate for their employees (potentially including content beyond software training). And college professors can create private groups for their classes, integrate Wiley content with other course content on their university site and track student progress, he said.

Even though the site offers competitive pricing and flexible content integration options, the initial content itself didn’t seem as engaging to me as what Udemy, creativeLIVE and lynda.com offer. From a quick tour of the site, it seemed as though most of the video content included screenshots of the software and audio narration. Much of the content on Udemy and lynda.com, however, puts an expert instructor front and center and alternates video of the software with video of a person talking and other shots for a more interesting experience.  But Pruett said future videos could offer more engaging formats and he emphasized that this is just the first version of the site.

Wiley has a 200-year history and other verticals beyond software training that it could add to Digital Classroom but, for now, its library of 46 courses, 50 digital books and 3,000 videos is dwarfed by lynda.com’s nearly 1.700 courses.

Last spring, the Boston-based startup said it had raised $8 million in venture funding just as Pearson, Cengage and Macmillan Higher Education slapped it with a lawsuit alleging several violations, including copyright infringement, unfair competition and false advertising. Boundless curates and packages free online content into open textbook alternatives tailored to students’ learning needs.

In June, the startup filed a motion to dismiss a few of the claims and said the other claims were without merit. But last month, a U.S. District Court Judge in New York denied the motion to dismiss.

Undeterred, Boundless this week filed another response, requesting a trial by jury.

“In our view, such legal action [by the publishers] is an attempt to stifle startups such as Boundless who are driving innovation and using the power of the Internet to help students save money and become better learners,” Boundless CEO and founder Ariel Diaz said in a statement.

Pearson, Cengage and Macmillan Higher Education did not immediately reply to requests for comment. But in their complaint, the publishers allege that Boundless “steals the creative expression of others, willfully and blatantly violating Plaintiffs’ intellectual property rights in several of their highest profile signature textbooks.” Specifically, they say that Boundless copies “the distinctive selection, arrangement and presentation of Plaintiffs’ textbooks, along with other original text, imagery and protected expression.”

In its defense, Boundless argues that the allegations are “overly broad and legally flawed” and that the similarities between the publishers’ textbooks and their online content are the result of covering the same facts and concepts in an order necessitated by the subject matter.

Despite the legal battle, the startup has pushed on, adding more content, organizing content hackathons and releasing its content under Creative Commons. Boundless currently offers content for 18 subjects and claims that students at half of the colleges in the country use its content.

Momentum behind open educational resources is growing – California and British Columbia have backed open textbook initiatives, for example.  And as awareness and the amount of low-cost or free open educational resources grows, services, like Boundless, could help professors, students and others sift through, curate and organize it. CK-12, a non-profit that curates high quality STEM (science, technology, engineering and math) content, takes another approach to aggregating and distributing open educational content. But this ongoing legal battle highlights how disruptive this movement could be to the textbook industry.

“You should be able to update content in the digital world on the fly,” he said. “In digital, the idea of a new textbook edition doesn’t exist any more.”

Since launching in 2009, the digital textbook startup has worked with about 80 publishers to bring more than 200,000 higher education and K-12 titles to all kinds of mobile and connected devices. On Tuesday, it unveiled Advance, a new free platform that lets publishers and authors turn static files or PDFs into an interactive book “in minutes.”

If schools are going to embrace digital content, Rashid says, they need to know that they can find all of the titles they need in digital form, not just a handful of them. With Advance, the company, which competes with giants like Amazon (a AMZN) and Apple and startups like Inkling and Benchprep, hopes it’s found a way to get more content onto its platform.  The platform itself is free, but Kno takes a cut of each book purchased.

To use the platform, publishers submit flat files to Kno, which the company says it can turn into an interactive format in minutes. From there, publishers can update content and add video, audio or other interactive components whenever they want. Publishers can also add end of chapter questions or other assessments, which can be captured and analyzed in Kno Me, the analytics dashboard launched last month.

While Apple’s iBooks similarly lets authors create interactive ebooks, the final product can only be accessed on iOS devices. Publishers on Advance can use the platform to create content for iOS, Android, Windows 7 and 8 and the browser.

Kno, which has raised about $69 million from top Silicon Valley VCs like Andreeseen Horowitz and SV Angel, said some of the publishers using the new platform include McGraw-Hill Education and Wayside Publishing.

At the Consumer Electronics Show in Las Vegas, the education-focused division of the McGraw-Hill Companies unveiled the SmartBook, an adaptive ebook that adjusts the reading experience to each student’s pace and mastery level.

Content is still structured somewhat like a textbook but instead of asking students to read it thoroughly from start to finish, it coaches the student on how to read the material and quizzes them on various concepts as they move through each section. Depending on their responses, they’re guided along to different highlighted passages. McGraw-Hill said it expects to release SmartBooks at prices starting at $19.99 for about 90 courses later this Spring.

The program, which is available on computers and tablets, builds on the 12 billion data points on student learning collected from LearnSmart, McGraw-Hill’s adaptive learning platform, the company said. But where LearnSmart is more focused on reviewing material, SmartBook attempts to help students read more efficiently to better retain information.

“To revolutionize learning, you need to revolutionize reading,” said Brian Kibby, president of McGraw-Hill Education. “We’re focused on attacking graduation rates and getting results.”

From a demo, it does seem that the SmartBook aims to provide an adaptive reading experience that adjusts to students with a good deal of granularity, using dynamic text and voice instructions to literally talk them through the program and point out the areas on which they should focus.  But McGraw-Hill’s products are not the only adaptive learning platforms out there. A year ago, at CES, for example, publishing giant Pearson announced that adaptive learning company Knewton would power its digital offerings. Macmillan also offers an adaptive assessment tool in its PrepU program.

The program closely tracks student behavior and, according to the Wall Street Journal, the company may share that data with instructors to improve courses, which could raise privacy questions for students and parents. But the company has said that it takes data protection seriously.

With increasing options for digital content, including open content and self-authoring platforms, McGraw-Hill Education and other textbook publishers are attempting to set themselves apart with products that make textbooks more interactive and smarter. The digital textbook market is still a small piece of the overall textbook universe but it’s expected to become a driver of growth. Kibby has been especially bullish on digital textbooks, arguing that higher education should go totally digital by 2015.

In November, McGraw-Hill announced that it planned to sell its education arm to private equity firm Apollo Global Management for $2.5 billion, but the deal has not yet closed.

The company, which is best known for measuring TV audiences,  is now backing Pereg Ventures, a new venture capital firm that plans to invest in startups in the U.S. and Israel in market intelligence and advertising.

As part of the arrangement, Nielsen is taking a minority stake in the VC and its executive vice president for global business development, Itzhak Fisher, will serve as a partner and chairman for Pereg.

The venture firm will operate independently of Nielsen, but will use Nielsen insights and, Fisher told Crain’s New York that Pereg will help Nielsen focus on technology that helps marketers close the gap between “watch and buy.”

“You have the ability to get much better ROI for your advertising money [with these tools], and these are the kinds of services Nielsen is getting into,” he said.

While it’s clear that people increasingly consume all kinds of content on all of their digital devices, advertisers are struggling to monitor that behavior and reach them most effectively. The approaches to analytics are slowly changing – in October, Nielsen introduced its new Cross-Platform Campaign Ratings to measure the number of people who saw a campaign on TV and digitally and, last month, comScore unveiled a new set of metrics that considers mobile and traditional web traffic. But it’s still early days and Nielsen’s hope is that entrepreneurs and startups will be able to help them give marketers and edge.

It’s expected the Pereg will raise $50 million and invest in about 15 startups that are beyond the early seed stage, Crain’s reported. About 80 percent of the investments will be domestic, with the remainder in Tel Aviv – a hotbed of digital innovation, especially in ad tech.

“This notion of content being here and commerce being there doesn’t really exist any more. Everyone has become a publisher,” Lerer Ventures partner and former Huffington Post CEO Eric Hippeau said Tuesday at Group Commerce’s Think Commerce conference in New York.

But, as content and commerce merge, he added that “it’s a lot easier for commerce brands to become publishers… than it is for people on the media side to add commerce.”

Historically, publishers have respected the line between “church and state,” separating editorial content from advertising and commercial content. Even Condé Nast’s Lucky fashion magazine, which is perfectly positioned for commerce, has not made the transition, he said. (Although the recently-launched iPad app does include direct links to products.)

And, it’s easy to understand why that bridge is difficult to cross. In addition to the cultural resistance against compromising an editorial identity with a commercial interest, e-commerce involves creating a whole new business model, with potentially new margin structures, customer service needs and other requirements.

How much credibility can commerce companies earn?

Interestingly, however, Philippe von Borries, co-founder of fashion and beauty site Refinery29 recently told Pandodaily that he thinks it’s commerce companies who have more challenges crossing over into publishing. “No one gives a shit about content from a commerce company,” he said, explaining that his is a media company that uses content to drive its commerce business.  While media companies come from a place of credibility, he believes that any content from commerce companies will only be viewed as a kind of sophisticated marketing.

But while it’s true that a customer may never look to Warby Parker or Gilt Groupe for a position on, say, the fiscal cliff, it doesn’t mean that commerce companies can’t be credible purveyors of content within the verticals on which they focus.  And, as Hippeau said, as social platforms turn everyone into some kind of publisher, the definition of “content” itself is changing, in turn altering what it means to be in the media business.

Thrillist: we’ve turned readers into buyers and vice versa

One company leading the way in the new world of content-meets-commerce is Thrillist and, at the Think Commerce conference, Ben Lerer, the company’s co-founder and CEO, said that more than half of Thrillist’s nearly $70 million annual revenue comes from Jack Threads, the e-commerce site it purchased in 2010.

“We’ve proven that we can turn a reader into a buyer,” he said. “We’re pleased that we can also turn a buyer into a reader.”

But despite Thrillist’s own success, he acknowledged not all media companies are as well positioned to cross into commerce.  From its launch, Thrillist’s value proposition was a site that recommended ways in which young men should spend their time – an ideal starting point for a commercial relationship. But news and sports publishers, even those with engaged audiences, may have a more difficult time with commerce because their content isn’t recommendation or action oriented.

Shana Fisher, managing partner at High Line Venture Partners, said that while it can be tricky to focus on two revenue streams at once and that companies initially supported by advertising revenue (like nearly all media companies) may find it difficult to later ask customers for credit card information, more companies should blend revenue strategies based on content and commerce.

“In verticals that are transactional, the divide is really small,” she said, highlighting food and fashion. “If it’s not related to something that’s transactional, it’s more abstract.”

In a conversation at the SIIA Ed Tech Business Forum, Luyen Chou, chief product officer for Pearson’s K-12 technology group, said that as new technology upends the textbook publishing industry, his company needs to become an “Electronic Arts for education.”

Clearly, Pearson and its rivals in education publishing need to reimagine their role as the rise of digital content cripples their business model. But look to Electronic Arts as a model?

Speaking with me later, Chou said that to keep up with the changing environment, traditional publishers can’t just digitize the static textbooks of the past, they need to excel at producing high-quality, interactive digital learning experiences and get them into the hands of students.

“[That includes] digital studios, animators, illustrators, producers, 3-D artists – we need to build that capacity within instructional companies like Pearson and we need the whole end-to-end supply chain to the take that from the studio to the actual users,” he said. “The folks that have done that well are the EAs of the world, digital studios. That’s not a core competency for companies like Pearson.”

Given the company’s wide reach across different corners of the market, from content to testing, at the K-12 and college levels and beyond, one of Pearson’s key assets is the massive amount of data it can use to target and personalize learning for students. And Chou acknowledged that the Electronic Arts parallel wasn’t meant to imply that Pearson only needs to focus on creating high-quality content, and not on other parts of its business.

“I take it for granted that we’re going to have a huge strategic advantage by way of the data we have on our customers, our students,” he said. “But you still have to serve up those compelling experiences. You can have the best data and the best algorithms in the world, but if what it ends up serving up is digitized versions of 2-D static content, it’s not going to sell either. We have to make sure that we’re complementing our data and platform with high-quality interactive learning content.” In getting to that goal, he said, it’s an open question whether the company will build or buy.

Interestingly, the SIIA ed tech conference itself took place at the McGraw-Hill Conference Center   in New York and several speakers commented on yesterday’s news that the publishing giant had sold off its education division to private equity firm Apollo Global Management.

But while McGraw-Hill chose to divest itself of its education arm, Pearson has taken the opposite approach, arming itself with even more education companies in recent years.

In the last twelve months alone, the company has spent $1.6 billion on acquisitions, according to Baran Rosen, president of media investment bank Whitestone Communications. And, given reports that Pearson is exploring the sale of the Financial Times, its push in education will likely only continue.

“They are going to really be a pure-play education company,” Rosen said at the SIIA conference. “That’s where they’re staking their future and they’re doing it in a big way.”

Image by Cindy Minear via Shutterstock.

The news wasn’t surprising as the company said in September 2011 that it planned to split its more profitable financial services division from its education arm. And earlier this month, the Wall Street Journal, The New York Times and others reported that a deal with Apollo was in the works. According to McGraw-Hill, the deal is expected to close in late 2012 or early 2013.

As the rise of digital content disrupts the publishing business, McGraw-Hill Education has attempted to keep pace with new products like its adaptive learning platform LearnSmart and partnerships with digital distributors like Apple, as well as startups Kno, Benchprep and others. Despite its efforts, the company’s education unit has lagged behind its financial services division. In the last quarter, for example, revenue for the unit fell 11 percent to $836 million. In its quarterly report, the company said the growth in sales of digital products across all product lines and the migration to more subscription-based business models impacted revenue.

Wall Street responded favorably to the news – after the announcement of the sale, shares in McGraw-Hill climbed about 2.35 percent to $52.90. Once the deal is closed, McGraw-Hill will be renamed McGraw Hill Financial.

As Bloomberg notes, McGraw-Hill Education’s sale isn’t the first time private equity has dabbled in education. In 2007, London-based Apax Partners led a $7.75 billion purchase of Cengage Learning Inc. from Thompson Reuters Corp, the financial news outlet reported.

As we and others have reported, tablets and other digital devices, along with the growth in open content initiatives and other textbook creation tools, are dramatically changing the landscape for traditional textbook publishers.

This summer, in a conversation with reporters, Jay Chakrapani, vice president and general manager of digital at McGraw-Hill Higher Education, said that the company wants to be the “Netflix of education.”

Through its digital products, LearnSmart, especially, he said, the company gathers increasing data about its students, enabling them to personalize learning experiences much like Netflix personalizes recommendations over time. Going forward, it will be interesting to see if Apollo takes a similar view on the future of McGraw-Hill Education.