Sperling tapped Bishop to start the online program

Sperling tapped Bishop to start the online program

At that point, most people didn’t even have email, but there was an electronic communication service called Prodigy that techies and business people were starting to use. Bishop developed an online MBA https://getbadcreditloan.com/payday-loans-nm/portales/ program and targeted the growing community of Prodigy users. She took out what she calls a «teeny, tiny ad» on Prodigy. «I think we received like 200,000 requests for information in a week,» she says, laughing. «And we were, of course, sending out [information] in the mail.»

Sperling also created a parent company called the Apollo Group that would allow him to expand his business. In 1994, he decided to take the Apollo Group public.

The security operations center at the University of Phoenix headquarters in Phoenix, Ariz., where employees monitor the university’s worldwide computer systems. (Photo: Emily Hanford)

«Apollo was a rocket ship of a stock,» says Trace Urdan, an equity analyst at Wells Fargo Securities who covers the for-profit education sector.

The capital from Wall Street allowed the University of Phoenix to grow quickly. Within five years of going public, the school had more than 100,000 students. Enrollment was growing by more than 25 percent a year.

Seeing the success of the University of Phoenix, several other for-profit colleges went public during the 1990s, too. Many of them were small trade schools that had been around for decades — even longer. The University of Phoenix proved higher education could be big business. Phoenix and other for-profits rode a huge wave propelled by the rising demand for higher education and one of the greatest bull markets in U.S. stock market history.

Once it went public, the University of Phoenix was under intense pressure from investors to keep growing. «The management team now faced the iron law of the quarter,» writes Sperling in his memoir. «Every quarter, the company must meet or beat analysts’ expectations, or the stock tanks.» Wall Street wanted bottom line growth of 30 to 35 percent per year, he writes, «no excuses accepted.»

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