SoftKey

SoftKey International was a publisher and distributor of CD-ROM based personal computer software for Windows and Macintosh computers during the late 1980s and 90s. Their products typically consisted of software intended for home audiences, especially shovelware discs containing various freeware or shareware game software. SoftKey enjoyed great success by offering "jewel-case only" products, which they dubbed their 'Platinum' line.

Canadian businessman and investor Kevin O'Leary started Softkey International in his basement on a $10,000 investment from his mother. By 1994, Softkey was a billion-dollar consolidator in the educational software market, acquiring no fewer than sixty rivals, such as WordStar, Brøderbund and Spinnaker Software. It then moved to Boston and took the name of one of its acquisitions, The Learning Company (TLC).

In 1995, SoftKey introduced a number of new children's educational software titles, branded under the KeyKids line.

Mattel bought in with great enthusiasm at the top of the market in 1999 at US$3.65B, but ultimately found itself losing money with 467 software titles. This acquisition was intended to broaden Mattel's product line and help Mattel sell more products that appeal to boys, but TLC began reporting unexpected losses before the deal was even completed. The deal was supposed to immediately add $50 million annually to Mattel's bottom line. The company instead lost $82.4 million in that fiscal year because of a number of problems with the acquisition, including a loss of a key distribution deal and a high return of unsold products from retailers. In October, Mattel announced that its earnings would fall well below expectations, prompting the departure one month later of TLC's O'Leary and another founder. Mattel ultimately sold the company to The Gores Group, LLC, (GTG) for a share of future profits. GTG said of TLC's business structure, "[it] was a textbook example of a business built mostly by cobbled-together acquisitions, which were then purchased by a larger company with little idea of how to make the pieces fit together." Said James Bailey, President of GTG, "there were seven separate Internet initiatives, all run by different people. Some of these people had never met each other, even though they worked in the same building." In 2001, Gores sold The Learning Company's entertainment holdings to Ubisoft, and most of the other holdings to Irish company Riverdeep.

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