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Broderbund 500 Redwood Blvd.

Brøderbund Software, Inc.
500 Redwood Blvd.
Novato, California
94948

Company History

Brøderbund was founded by Doug and Gary Carlston in 1980, when the personal computer software industry was still in its infancy. The brothers established the company in order to market Galactic Empire and Galactic Trader, computer game programs Doug had written in his spare time when he wasn't practicing law.

By the summer of 1980, after forming an alliance with the Japanese software house StarCraft, the company was able to market a substantial line of home entertainment products. Before the end of its third year, Brøderbund had moved from Eugene, Oregon, to California's Marin County, had grown to more than 40 employees and was selling millions of dollars' worth of software annually.

Cathy Carlston, Doug and Gary's sister, joined the company in 1981. Until her departure in 1989, she served as vice president of educational market planning and was instrumental in formulating Brøderbund's marketing efforts to schools. Gary Carlston, the firm's first CEO, also left in 1989 to pursue other interests. In 1987, Ed Auer joined the company as senior vice president, chief operating officer and director after a 23-year tenure at CBS, Inc. He was appointed president in 1989 and retired in 1994. Auer remains a member of the company's board of directors.

William McDonagh, who had been the company's CFO, was named president and chief operating officer in 1994. Today, Doug Carlston is still actively involved in the company and serves as chairman and CEO. Although the company now employs more than 450 employees, Carlston and McDonagh still manage to retain a corporate culture that allows plenty of room for individuality and creativity at any level. It's still a company where executives can be found eating lunch with groups everyday in the cafeteria and where each Friday concludes with a company - wide meeting to trade ideas and socialize.

The Products

Brøderbund published 68 new products in fiscal year 1994, an increase of more than 50 percent over 1993. The company expects to publish fewer products, but about the same number of titles in fiscal year 1995, because hardware platforms are consolidating.

In the past, Brøderbund might publish DOS, Windows, Macintosh, floppy and CD-ROM versions of a product. Today, most of the company's products are released on Macintosh or Windows CD-ROM. Similar hardware platform consolidation in the European and Japanese markets is also creating a more cost-effective climate for software developers.

Home Creativity Products. The Print Shop® family of products has sold more than 8 million units since the original title was introduced in 1984. One of the best-selling consumer software programs of all time, The Print Shop allows users to make personalized signs, banners, stationery, labels, greeting cards and more. In addition to the latest Codie award winning release The Print Shop CD Ensemble, other products in the family include The Print Shop Deluxe Companion and several graphics folios.

3D Home Architect® has become the leader in the new category of visualization and design tools for the "do-it-yourselfer." The current CD-ROM version allows amateur home designers and remodelers to layout rooms or entire houses, complete with furnishings, and then view three-dimensional renderings of their work. In a way, it allows one to take an instant virtual reality tour of his or her new room or home before a single brick is set. It also provides tools to check one's plan and prepare a materials budget. Added in the CD-ROM version are videos and magazine articles to teach basic building and safety issues.

Brøderbund also publishes products in the popular PC Globe line, including PC Globe Maps 'n' Facts. This electronic atlas provides instant access to maps of the United States and the world. It also includes up-to-date detailed information on demographics, health statistics and economics.

Educational Products. A number of Brøderbund products enjoy widespread acceptance in schools. Teachers report that their high quality and ease of use enhance the curriculum and motivate students to learn. Many titles continue to be best sellers in the school as well as the home computing market.

The Codie award winning Carmen Sandiego family of products is a series of games designed to stimulate the player's interest in and knowledge of geography, world cultures, astronomy and history. Brøderbund has sold more than 4 million units of Carmen Sandiego products since the first title, Where in the World is Carmen Sandiego®, was introduced in 1985. In 1991, the company signed an agreement with Western Publishing Company, Inc. to market a variety of printed materials, including children's story and activity books, puzzles and book covers all based on the adventures of Carmen Sandiego. In 1991, PBS premiered a weekday children's quiz show based on the Carmen Sandiego theme. Fox Television followed in 1993 with an animated show also based on Carmen Sandiego. Additionally, other licensed products include video games, board games, clothing, albums, and a calendar.

Brøderbund continues to introduce more products in the early learning market (software for children ages 3-10) and already has been met with great success. The Playroom®, now available as a multimedia CD-ROM product, is an award-winning program designed to teach children about letters, numbers and time through games and activities built around two mice play friends. The Treehouse® is a child's secret hideaway featuring several games designed to teach specific skills with respect to language, art, music, math, history and science. The Backyard® is an exploratory learning product that introduces young children to such subjects as animal behavior and anatomy, mapping and directional skills, and strategy and logic in an interactive and engaging manner. Kid Pix Studio®, a Codie award winning children's multimedia paint and animation program, transforms the computer into a magical art studio combining art tools, rubber stamps, video and sound clips, special effects and humorous sounds.

Math WorkshopTM is the first in a series of single-subject early learning CD-ROMs available from Brøderbund. Polly Gonzales, Gus the Bowling Gorilla and Algebird are just a few of the engaging characters that entertain kids with seven activities designed to build math skills.

In a cosmic departure of sorts, Reading GalaxyTM uses an intergalactic game show format to get kids excited about reading. Incorporating more than 450 passages from 30 works of literature old and new, Reading Galaxy is sure to generate more than a few trips to libraries from kids curious to see how each of these 30 books conclude. The Amazing Writing MachineTM is truly amazing in its ability to spark children's imaginations. It's a tool for both writing and drawing containing several resources to get kids started and keep them motivated when creating books, letters, essays and even poems. Reader robots, secret codes and whimsical noises keep writing fresh and fun.

Brøderbund develops materials to help teachers integrate its product into curriculum. Teacher's Guides, which are developed by educators and classroom tested, include thematic units, suggested activities for individual students, group activities, annotated bibliographies, reproducible activity sheets, audio or video cassettes, books for classroom libraries and other materials. Lab Packs or Network and Site License versions of Brøderbund products provide an economical means for educators to supply multiple workstations in a school setting.

Entertainment Product. Brøderbund is well-known for its fun and well-designed entertainment products. The popular programs Prince of Persia® and the sequel, Prince of Persia 2: The Shadow and the Flame are cinematic, action games, featuring breathtaking, lifelike animation.

The most recent entertainment title from Brøderbund, Myst®, last year became as much a social phenomenon as it did a blockbuster CD-ROM title. Myst, which has already sold more than 1 million units, features 2,500 original 3-D rendered graphics, over one hour of Quicktime video and an original soundtrack. This non-linear adventure game has no time limits and no threat of violence. Puzzle-solving is the key to success in the surrealistic world of Myst. Designed for ages 14 and up, Myst is considered the premiere example of multimedia software and it's not uncommon to hear software industry observers use the term "Mystlike" as a measuring stick.

Brøderbund has a full slate of new entertainment products it will announce in 1995 and Myst II is not expected to release before 1996.

Affiliated Labels Products. Affiliated label products distributed by Brøderbund are generally marketed under the name of the affiliated label company and distributed exclusively by Brøderbund. The company currently has several affiliated label publishers including: Starwave, Inroads Interactive, The Logic Factory, Cyan, and Living Books, a Random House/Brøderbund Company.

Living Books remain at the forefront of multimedia product design as interactive, animated children's storybooks based on well-known classics and popular authors. In 1993, Brøderbund announced the Living Books joint venture with Random House, Inc. The resulting company is a focused, well-funded effort combining the best of two worlds; Brøderbund's proven technological and product editorial expertise combined with Random House's rich selection of content.

Marketing, Distribution
and Operations

Brøderbund's corporate headquarters are located in Novato, California. Its national sales staff operates out of seven offices situated in California, Texas, Illinois, Pennsylvania, Georgia and Massachusetts. In addition, the company has distribution arrangements in Japan and Australia. The company recently opened an office in London to serve as a hub for its sales and marketing efforts in Europe.

Brøderbund promotes its products directly to consumers through public relations, advertising and a variety of direct-marketing activities and indirectly through joint promotions with distributors and dealers.

In addition, the company has a separate educational marketing and sales group which focuses on sales to schools, develops advertising and collateral material aimed at the educational market segment and attends key educational trade shows. This group also produces material for teachers to tie Brøderbund learning products to current curriculum and provide classroom activities for both on and off the computer.

Brøderbund sells its products through distributors and directly to software specialty retail chains, office stores electronic chains, computer superstores, mass merchandisers, discount warehouse stores, educational dealers, and schools. The company also operates a catalog division, Brøderbund Software-Direct, to sell to end-users.

Brøderbund prepares its own master software disks, user manuals, and packaging. The assembly and shipment of final products, as well as the majority of disk duplication that is not CD-ROM, is performed by the company at its own 93,000 square foot facility located in Petaluma, CA.

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