Over the past few years, investors have dumped hundreds of millions of dollars into online education, and now companies like Coursera, Udemy and edX are searching for profitable long-term business models. That’s led Udacity founder Sebastian Thrun to abandon his initial approach of charging for videos and to instead charge for degrees in subjects like Android and data analysis.

Mr. Thrun, a Stanford robotics professor who started Google’s self-driving car efforts, is the godfather of the massive open online course, or MooC for short. Delivering college lectures via online video was supposed to revolutionize education by making it much more cost efficient.