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 joan.solsman@dowjones.com