By Joan E. Solsman
McGraw-Hill Cos. (MHP) tapped Lloyd G. "Buzz" Waterhouse, a technology veteran with experience in education, as the chief of its education arm.
Mr. Waterhouse, who worked at International Business Machines Corp. (IBM) for 26 years before a stint leading Harcourt Education, will become president and chief executive of McGraw-Hill Education June 14.
He will report to McGraw-Hill Chairman and Chief Executive Harold McGraw III in the ongoing process of separating the education business into its own publicly traded company later this year. His appointment underscores the gaining importance of the digital side to selling learning tools as it prepares to spin off the unit.
Mr. McGraw has called digitization in education the "opportunity of a century," saying McGraw-Hill was putting in place cost structures and digital capabilities necessary to lead in the transformation.
In a recent example, McGraw-Hill this week agreed to a "pay-for-performance" model at an online university, which significantly discounts e-books and digital learnings tools but will earn the company a premium for students who use the technology and services and pass their courses.
Such opportunity is crucial to the education business, which has been plagued by state budget cuts weighing on school spending. In the latest period, unit revenue returned to decline after a one-quarter reprieve from a year-long contraction streak, with weakness centered in the school-education group.
Mr. Waterhouse began his career at IBM in 1973, starting out in the software division before moving on to help direct Asia Pacific marketing and services, global strategy and e-business services. He was chief executive of Harcourt Education in 2006, which was sold in 2007 and merged with Houghton Mifflin Harcourt at the end of that year. Since then, he served as director of companies including ITT Educational Services Inc. (ESI).
"My lifetime commitment to learning and to technology convinces me that it's time to accelerate the transformation to digital education," Mr. Waterhouse said in a release Friday. Mr. McGraw highlighted his experience in new technologies as well as that in the education sector and international business.
Shares were down 1.6% at $43.07 in recent trading. The stock has declined 4.2% so far this year, while the wider market is moderately positive.
Write to Joan E. Solsman at firstname.lastname@example.org