Updated from 1:34 p.m. to include comments from the company in the fifth paragraph.
NEW YORK (TheStreet) -- Rosetta Stone (RST), the world's leading provider of language-learning and literacy solutions, has plummeted a hefty 63% over the last five years. Business just ain't what it used to be.
The Arlington, VA.-based tech company is struggling to figure out how to get people to pay for a package of teachings that have become of a commodity on the Internet, prompting shares to fall more than 36% in the past 12 months, and nearly 20% in the first quarter.
The computer-assisted language learning software offers courses in 30 different languages through a subscription model. Since its shares have been tumbling, the company has attempted to turn around its free fall.
"Overall, we place a real emphasis on mobile learning across all our products, and are developing apps for both iOS and Android ecosystems in our effort to engage learners all over the world," Mudd said in an email. "We are finding that there are nice up-sell and cross-sell synergies between our free and lower-cost mobile solutions and our full-featured online subscription products." Rosetta Stone rose Thursday, gaining 1% to close at $10.02. Competitors offering language learning tools free of charge have proved to be a problem for the subscription business model based company. Duolingo, a free language learning software, is one alternative taking market share. Duolingo, which began operations in 2011, is a free language-learning program, is also a crowd-sourced text translation platform. Duolingo allows people to use the site as a learning tool free of charge, yet it generates revenue by having companies pay for translating documents. In 2011, Rosetta Stone launched its first app, Rosetta Course. In 2013, the micro-cap company began expanding beyond language and deeper into education-technology with its acquisitions of Livemocha, Lexia Learning, Vivity Labs, and Tell Me More. In time for the World Cup, Rosetta Stone released an app for iOS and Google (GOOG) called Rosetta Stone Portuguese Futebol Edition in June. The company released the app targeting travelers heading to the FIFA World Cup this month. The special edition would make the fifth app released for the company's Travel series after French, Spanish, German and Italian as well as couple of children focused apps. -Written by Kathryn Mykleseth in New York.
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