NEW YORK (TheStreet) -- The lure of the Rosetta Stone (RST) used to be impossible to resist.
Language learners were once eager to fork over $500 for a stack of the company's CD-Roms, confident that one of the world's leading providers of language-learning and literacy solutions would carry them to Italy, Argentina or China with all the tools to make friends and build fortunes.
But those days are long gone.
Faced with a far more crowded language-learning market and a late-entry into mobile apps, shares of Rosetta Stone have tumbled 65% over the last five years. The Arlington, Va.-based tech company has struggled to get consumers to pay for similar language courses available through apps that cost far less. Shares ending trading on Thursday at $9.45.
Though Rosetta Stone markets its products as top-of-the-line, the company's declining revenue is a testament to remaking the company's need to find a new business model for a younger generation's Internet. Revenue in the first quarter fell 5% to $61 million.
While Rosetta Stone is the only publicly-traded language learning software, it isn't the only learning software company suffering from a downgrade in share price.
K12 (LRN), a technology-based education company that provides an online curriculum for Kindergarten to 12th grade students, has seen its shares fall 3.5% over the last 12 months. Scientific Learning Corporation (SCIL) has dropped 78% in the past year.
Rosetta Stone offers courses in 30 different languages through a subscription model. Consumers now pay $180 to $400 for online subscriptions or software downloads, price reductions that took place this year. Unlike in the 1990s, competition is coming from other subscription-based products such as Fluenz, Living Language, Babbel and Mango, all privately-held companies.
Some, such as Babbel, offer services starting at $6 per month, much lower than Rosetta Stone's entry level option of $170 for six months. But Rosetta Stone's price reductions may be a case of too little too late, said Robert Furlong, an analyst at GARP Research and Securities.