The Learning Company was an educational software firm that created such popular titles as "Myst," "Reader Rabbit" and "Where in the World is Carmen Sandiego?" Toy company Mattel's $3.6 billion purchase of The Learning Company in May 1999 lives in infamy as one of the most disastrous acquisitions of all time. Mattel purchased it in hopes of beefing up its own software offerings, but The Learning Company, which hadn't developed a new hit in a few years, lost nearly $200 million within months of the sale. This turned Mattel's projected gains into a loss of $86 million that year [source: Doan]. The company's stock, which had reached a high of around $46 a share the previous year, plummeted to around $12 a share [source: Bannon].
Mattel's Chairman and Chief Executive Jill Barad was forced to resign over the fiasco. Barad had worked her way up from product manager in the Barbie division, where she greatly improved sales. Mattel sold The Learning Company to Gores Technology Group in 2000 for what was believed to be about one-tenth of its purchase price. Gores spun off The Learning Company's entertainment division to Ubi Soft Entertainment, and sold the educational division to Riverdeep, which later acquired Houghton Mifflin. The Learning Company is now a division of Houghton Mifflin Harcourt.