The Learning Company

Not to be confused with The Learning Channel.
The Learning Company
Subsidiary
Founded 1980
Headquarters Boston, Massachusetts, United States
Key people
 Warren Robinett (co-founder)
Parent Houghton Mifflin Harcourt
Website www.learningcompany.com

The Learning Company (TLC) is an American educational software company, currently owned by Houghton Mifflin Harcourt. It produced a grade-based system of learning software and tools to improve productivity. Products for preschoolers through second graders include Reader Rabbit, and software for more advanced students include The ClueFinders. The company is also known for publishing licensed educational titles featuring characters such as Arthur Read, Scooby-Doo and Caillou.

Founding and ownership

The original TLC was founded in 1980 by Ann McCormick, Leslie Grimm and Teri Perl, three PhD educators who, along with Warren Robinett, a former Atari employee who had programmed the popular game Adventure, saw the Apple II as an opportunity to enhance the ability to teach young children concepts of math, reading, science, problem solving and thinking skills. Part of the original funding for the company came from a National Science Foundation grant. Additional funding was provided by Jack Melchor and Melchor Venture Partners, among others.

TLC was among the four companies IBM contacted to produce launch titles for the PCjr, announced in late 1983.[1] From 1980 through 1984 it created a line of 15 widely acclaimed children's educational software products, which were sold through the newly evolving U.S. retail and school computer software channels.

Early struggles and successful transition period

During the first four years, the founding board of directors hired and replaced four CEOs as the company incurred significant losses attempting to develop a sustainable business. In the first half of the 1985 fiscal year, the Board hired as CEO Bill Dinsmore, a former McKinsey & Company consultant with a 15-year track record turning around and building high quality consumer product lines. In the second half of 1985, the product line was consolidated from 15 products down to 5 products. Additionally, an improved and focused new product development process was instituted to identify subjects that parents and teachers named as highest priority for children ages 3–14.

In late FY 1986, Mr. Duca was elected Chairman of the Board and for the next decade he devoted a significant amount of his time to TLC focusing particularly on the business model and strategy. IGSB became The Learning Company's largest shareholder. With Mr. Dinsmore as CEO from 1985 to 1995, TLC’s revenues increased from $2.4M to $53.2M and profitability increased from break-even in FY 1985 to a 20% pre-tax margin and $10.6M in pre-tax earnings.

The leading families of products were the Reader Rabbit series for ages 2–8, the Treasure Mountain Reading-Math-Science series for ages 5–9, the Super Solver series for ages 7–12, the Student Writing & Publishing Center for ages 7–adult and the Foreign Language Learning series for ages 15–adult.

TLC went public on April 28, 1992 in an IPO led by Morgan Stanley and Robertson, Stephens & Co. From 1992 to 1995, TLC achieved 16 consecutive quarters of revenues and profits growth, never experiencing a down quarter or year. TLC’s early struggles, followed by 10 consecutive years of outstanding performance, were the subject of case studies at both Harvard and Stanford universities.

Softkey acquisition

In 1995, TLC was acquired in an unsolicited transaction by Softkey for $606M, all cash.

Subsequent to the acquisition, TLC was reformed from the merger of WordStar, Spinnaker and SoftKey Software and was relocated from San Francisco and Toronto to Cambridge, MA. Prior to that, SoftKey was a Canadian company that was founded by Kevin O'Leary and traded on the Toronto Stock Exchange. During the years following the three-way merger, the combined company was led by Michael J. Perik as CEO, Kevin O'Leary as President and R. Scott Murray as CFO. The trio led the combination of many leading brands through acquisitions of such companies as Broderbund, MECC, Mindscape, and Creative Wonders. The company held some of the best-known educational, entertainment and home productivity brands in the market. These included Reader Rabbit, Carmen Sandiego, The Oregon Trail, Myst, Riven, The Print Shop and PrintMaster.

The team led the sale of software in well-known retail chains such as Best Buy, Office Depot, Staples and Wal-Mart, in direct mail channels across Europe, and in the OEM channels as well as creating one of the first online imaging models in the market. In 1996, SoftKey changed its name to "The Learning Company".

Mattel acquisition and rapid devaluation

In the fall of 1998, Mattel agreed to acquire The Learning Company in a stock-for-stock merger valuing the company at approximately $4.2 billion. In 1999, the company name was changed to Mattel Interactive, which published not only educational games, but licensed titles from brands like Barbie.[2]

Mattel sold The Learning Company in 2000 at a loss to Gores Technology group. The total financial losses to Mattel have been estimated to be as high as $3.6 billion.[3]

Mattel's acquisition of The Learning Company has been referred to as "one of the worst acquisitions of all time" by several prominent business journals.[3][4]

Software

Alternate TLC logo used from the mid-1990s until 2007

Reader Rabbit / The ClueFinders series

Zoombinis

Super Solvers series

Super Seekers games

Carmen Sandiego series

Other games

References

  1. ↑ Wiswell, Phil (January 24, 1984). "Coming Soon: Games For The PCjr". PC. pp. 142–145. Retrieved January 26, 2015.
  2. ↑ "Profile: Mattel Interactive". IGN Games Newsletter. Retrieved 2 September 2014.
  3. 1 2 Cave, Andrew (September 30, 2000). "Mattel sale ends $3.6bn fiasco". The Daily Telegraph. London. Retrieved October 11, 2015.
  4. ↑ Rosenbush, Steve (October 4, 2007). "When Big Deals Go Bad—and Why". Bloomberg. Retrieved October 11, 2015.

External links

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