The Learning Company


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

Founding and ownership

The Learning Company was founded in 1980 by Ann McCormick, Leslie Grimm, Teri Perl, and Warren Robinett, a former Atari employee who had programmed the popular game Adventure. They saw the Apple II as an opportunity 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.
TLC produced launch titles for the PCjr, announced in late 1983. From 1980 through 1984, it created a line of 15 widely acclaimed children's educational software products, which were sold through the U.S. retail and school computer software channels.
In the first half of 1985, the Board hired as CEO Bill Dinsmore. Shortly after Mr. Dinsmore was hired, Reece Duca, a founding Partner of the Investment Group of Santa Barbara, became a member of the Board of Directors and purchased shares from several founders and original venture firms. In late 1986, Mr. Duca was elected Chairman of the Board. IGSB became The Learning Company's largest shareholder.
During the 10-year period from 1985 to 1995, TLC's revenues grew at a 36% compounded rate from $2.4M to $53.2M and profitability increased from breakeven in 1985 to a 20% pre-tax margin. 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 by Softkey for $606M.
Subsequent to the acquisition, TLC was reformed from the merger of WordStar, Spinnaker, and SoftKey Software. 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. TLC acquired many leading brands through acquisitions of such companies as Broderbund, 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 software sold in retail chains and 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".

Later owners

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. Mattel sold The Learning Company as well as Mattel Interactive 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. 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.
The Learning Company was acquired by Riverdeep Interactive Learning in September 2001. Riverdeep merged with Houghton Mifflin in December 2006, and the following year Houghton Mifflin Riverdeep became Houghton Mifflin Harcourt after it acquired Harcourt. HMH released several book sets under The Learning Company brand umbrella, including Oregon Trail Adventures, The Little Box of Love, and The Little Box of Laughs. In April 2018, The Learning Company was folded into Houghton Mifflin Harcourt, who currently uses the company's name as its slogan.

Software

''Reader Rabbit'' / ''The ClueFinders'' series