Profile: Rosetta Stone Inc (RST.N)

RST.N on New York Stock Exchange

23 Jul 2014
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Rosetta Stone Inc., incorporated on December 23, 2005, is a provider of technology-based language learning solutions. The Company develops , markets, and sells language-learning solutions consisting of software, online services, mobile applications and audio practice tools primarily under its Rosetta Stone brand. Rosetta Stone’s teaching method, called as Dynamic Immersion, is designed to use the innate, natural language learning ability that children use to learn their native language. The Company’s courses are based on its interactive technologies and pedagogical content, and utilize a sequencing of images, text and sounds to teach a new language without translation or grammar explanation. As of December 31, 2011, the Company offered its self-study language learning solutions in 30 languages. Its customers include individuals, educational institutions, armed forces, government agencies and corporations. In June 2011, the Company released levels 4 & 5 for Chinese (Mandarin) and Russian and TOTALe Companion HD on the Apple iPad. In April 2013, it acquired Seattle-based Livemocha. Effective August 1, 2013, Rosetta Stone Inc acquired Lexia Learning Systems Inc, a developer of reading software.

The Company distributes its solutions through select retailers, such as, Barnes & Noble, Best Buy, Books-a-Million, Staples and Costco. It also provides an online peer-to-peer practice environment called SharedTalk, at, where registered language learners meet for language exchange to practice their foreign language skills. During the year ended December 31, 2011, it had more than 154,000 active SharedTalk users.

The Company’s each language learning solution has up to five levels, with each consecutive level representing a higher level of proficiency. It sells each level as a standalone unit, although it offers a price incentive to customers to purchase all available levels of a language as a bundle, where that option is available. Rosetta Stone TOTALe integrates the Company’s online courses with coach-led practice sessions, language games, interaction with native speakers and live support from customer service agents. The Company launched Rosetta Stone Version 4 TOTALe in Japan in February 2011, in the United Kingdom in May of 2011 and in South Korea in July of 2011. In July 2011, the Company introduced in South Korea, ReFLEX, an online subscription language-learning solution designed specifically for English learners who seek to improve their listening and speaking skills with an online course and coach-led practice sessions.

Rosetta Course is a self-study interactive language learning curriculum that is the core component of the Rosetta Stone offering. The course consists of sequences of listening, speaking, reading and writing interactions designed to teach, reinforce and test learners through the Company's software program. Rosetta Studio, is a series of coach-led practice sessions that align with the curriculum in Rosetta Course. Rosetta World,is an interactive community of language learners. Audio Companion, is a series of digital audio files that contain lessons directly aligned to the Rosetta Stone curriculum, allowing users to practice and carry on their immersive experience when they are away from a computer. TOTALe Companion HD which is is a learning tool that provides access to Rosetta Course and includes the Company's speech recognition technology.

Rosetta Stone has four different editions: personal, enterprise, classroom and home school. Each edition utilizes the same core software product, but includes different ancillary features. Personal Edition is targeted to individual consumers and contains the core software product the Company uses for all editions. Enterprise Edition is targeted to businesses, armed forces, government organizations and not-for-profit entities, and can accommodate organizations of any size, from individual learners to global organizations. This edition includes management tools that provide administrative and reporting functionality. These tools deliver reports and graphs that track learner activity, progress and scores, thereby providing organizations with key information they need to measure return on their language learning investment.

The Classroom Edition is targeted to language programs in primary, secondary and higher education settings, and is scalable to accommodate a variety of implementations, from individual schools to district-wide programs and universities. The classroom edition is designed to be incorporated into a teacher's overall language-learning curriculum, complementing in-class teaching and enabling individualized self-paced learning outside the classroom. The classroom edition includes a learner management tool, the Rosetta Stone Manager, which provides administrative and reporting functionality. This tool enables teachers to plan lessons and generate reports and graphs that track student and classroom activity, progress and scores. Home School Edition is targeted to families with home school students and is designed to provide parents the tools and resources they need to manage student. The home school edition includes administrative tools that permit parents to follow student progress and access specific information about student performance, such as completed exercises, test scores, and time spent learning and to generate printable progress reports. In addition, parents have the ability to enroll their students in pre-defined curriculum paths designed to assist in lesson planning and in achieving learning objectives.

The Company has developed Rosetta Stone products for the use of Native American communities to help to save their endangered languages, including Mohawk, Chitimacha, Inuktitut and Inupiaq. The Company’s solutions are available both pre-packaged and by subscription online through its language learning portal. During the year ended December 31, 2011, approximately 73% of its revenue was from compact disk-read only memory (CD-ROM) sales to both consumers and institutions, while approximately 27% was from online subscriptions. The Company’s newest application, Version 4, supports up to five levels of proficiency and is available in 24 languages. Version 3 supports up to five levels of proficiency and is available in 31 languages. Version 2 is available for its other 3 languages. The technology underlying Version 2, Version 3 and Version 4 is designed to handle the complexities of a range of languages, including languages written from right-to-left, such as Arabic and Hebrew and languages with characters, such as Chinese and Japanese.

The Company has developed a speech recognition technology focused on the challenges of language learners, stressing non-native speech understanding and pronunciation feedback. The speech recognition models include languages traditionally not supported by general-purpose speech recognition software, such as Irish. It has developed algorithms, Adaptive Recall. It has developed a student management system, which is designed to allow teachers and administrators to configure their own lesson plans using its content and exercises and to review reports for evaluation of student progress. It has also developed an intuitive user interface that assists in the learner's transition from listening comprehension to speaking, making language skill development an integrated experience. The Company has also created content development tools that allow its curriculum specialists to write, edit, manage and publish its course materials. These tools allow authors, translators, voicers, photographers and editors to work efficiently and cooperatively across multiple locations.

The Company competes with Berlitz International Inc., Simon & Schuster, Inc. (Pimsleur), Random House Ventures LLC (Living Language), Disney Publishing Worldwide and McGraw-Hill Education.

Company Address

Rosetta Stone Inc

ARLINGTON   VA   22209
P: +1800.7880822
F: +1540.4320953

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