Some industry conversations since the QuinStreet S-1 was filed (get it here) got us thinking about market share in the EDU lead generation space. Real revenue numbers on the Top 5 lead providers (CollegeBound, QuinStreet, Vantage, Education Dynamics, All-Star Directories) in the education space are hard to come by but everyone talks about rapid growth in CY 2009. The standard growth number that I hear lead gen folks talk about is 20% YOY revenue growth. But let’s look at QuinStreet in education for a second.

*QuinStreet’s fiscal year ends on June 30th

Two key takeaways

1. DeVry is a huge chunk of QuinStreet’s EDU business and it is likely to decline given Starcom’s AOR relationship

2. Actual growth with clients other than DeVry in the EDU vertical has been anemic compared to the market over the past 24 months. They have grown 4% YOY for the past two years vs. 20% for the market.

This data speaks to the importance of the M&A machine to QuinStreet’s future growth.

DeVry reported on their fall enrollments this morning. Check out the release here.  Key takeaways are 19.4% YOY growth in new student enrollments and total enrollment increased 22.7% YOY. Sparkroom customer US Education grew the new students 21.5% YOY (November data) and total student population increased 14.8%. Results were well above analyst expectations.  Congrats to the DeVry folks on putting up what will be a great quarter when they report in January.

Two weeks ago, I attended Saleforce’s annual customer and partner conference, Dreamforce Global Gathering 2009. It was an impressive event, with over 19,000 attendees crammed into the Moscone Center in San Francisco. Their quarterly numbers, released just before the show, came in at $331M, up 20% YOY, with a total of 67,900 customers, up 31% YOY. This company is a huge success story.

Although the adoption of Salesforce today is not widespread in the for-profit higher education arena, our guess is that their presence will grow over the next couple of years. Today, many schools simply utilize the basic CRM capabilities that are already built into their Student Information Systems – typically this is vendor software which is broadly installed throughout their campuses and which was bought and paid for years ago. The downside is that it is much harder for schools to adopt sales and marketing best practices because their data and processes are hemmed inside a legacy SIS platform.

At Dreamforce, my eyes were opened to a world filled with a rich ecosystem of partners. Salesforce’s AppExchange has been very successful – it is a marketplace where customers can select software from hundreds of third-party vendors offering value-added solutions across a myriad of categories such as integration, data cleansing, marketing automation, analytics, to name a few.

I was also interested to note the steady adoption of Salesforce by the not-for-profits. The Salesforce Foundation offers deep discounts to not-for-profit schools – up to 80% off list price. At one panel session, Northeastern University demonstrated an impressive number applications that they had built out on top of the Force.com platform to manage donors, placements, at-risk students, alumni, enrollments and many other things. With the total cost of ownership so low, building out custom applications on the Force.com platform becomes a compelling option for these schools.

After witnessing the energy and momentum at Dreamforce, we at Sparkroom have concluded that a stronger Salesforce presence in for-profit edu is inevitable and could be of great benefit to the industry. Why? Because if it happens, it will likely lead to:

• Deeper adoption of sales and marketing best practices. Many schools are limited by their current vendor solutions, and unable to fully implement capabilities and best practices that can help maximize their enrollments and reduce their acquisition costs.

• Greater choice and flexibility for schools. Salesforce’s platform is open. Open APIs make it easier to integrate best-of-breed software solutions together. An open platform also makes it easier for schools to extend and augment native functionality. And the AppExchange would provide schools with access to a rich ecosystem of complementary vendor solutions.

• Greater adoption of cloud computing. As a software-as-a-service vendor, Sparkroom is naturally a firm believer in the cloud. Salesforce was the original pioneer of SaaS, and in under 10 years has fundamentally changed the mindset around software and enterprise data living in the cloud.

We will be watching with great interest to see if our prediction becomes true.

First of all congratulations to Dave (@davewengel) and Jay (@jayweintraub) as they kick off Shouk Media. LeadCritic breaks the story here. Why this is interesting:

TargusInfo issued a press release announcing the departure and the formation of the new company.  First of all, this doesn’t happen – ever. TargusInfo must really like Dave. Secondly, they also said ” TARGUSinfo will be Shouk’s first customer.” Let the speculation on what Shouk is now and what it will be in the future begin. I have often asked Jay how he plans on monetizing his lead gen relationships and the platform that he has built with LeadsCon. This is obviously part of that play.

So what is Shouk Media going to be? (point of parliamentary procedure: I think Shouk is typically spelled souk).

I never thought I would be able to use photos from a recent trip to Marrakech to make a point about lead generation but here goes.  The souks in Marrakech:

* are incredibly, busy marketplaces

* have lots of vendors selling, what appears on the surface, to be exactly the same thing

* make it nearly impossible to authenticate and verify the identity/trustworthiness of sellers/buyers

* have zero price transparency – everything is negotiable

* are full of tiny niches (my favorite Marrakech souk was the one selling exotic birds)

Perhaps Dave and Jay can solve some of the issues above and provide a trustworthy marketplace where buyers and sellers can meet. LeadsCon in February will be even more interesting as I expect we will learn more about this new business.

Sparkroom will be exhibiting. Looking forward to catching up with the lead gen ecosystem there.

Today, ForProfitEdu.com launched their first survey of education marketers and lead providers. See the press release here as well as on our website. Sparkroom is excited to be sponsoring the survey and to be working with the whole team at ForProfitEdu. Take the survey now!

Look for results from the survey in early 2010.