By 1994, Softkey had become a major consolidator in the educational software market, acquiring rivals such as WordStar and Spinnaker Software.[37] In 1995, Softkey acquired The Learning Company (TLC) for $606 million, moved its headquarters to Boston, and changed its name to The Learning Company.
TLC earned more than USD$800 million in 1998 alone, despite recording a loss USD$105 million and losses over the previous two years.[8] TLC bought its former rival Brøderbund in June 1998 for $416 million. In 1999, TLC and its 467 software titles were acquired by Mattel in a $3.8 billion stock swap.[38] Mattel needed to leverage The Learning Company's interactive software to take Barbie, Hot Wheels and its iconic brands into the interactive world and develop new revenue streams for the company.[5] O'Leary later sold the company in 1999, for USD$4.2 billion to Mattel.[33] Sales and earnings for Mattel soon dropped, and O'Leary departed from Mattel and received $5 million in severance pay. The purchase by Mattel was later called one of the most disastrous acquisitions in history.[39] Though O’Leary had signed a contract to stay with Mattel for three years, six months after the deal closed O'Leary was fired. Following the acquisition, Mattel experienced a USD$105 million loss where management had projected a US$50-million profit. This caused Mattel’s stock to crash, wiping out USD$3 billion of shareholder value in a single day. Mattel's shareholders later filed a class-action lawsuit accusing Mattel execs, O’Leary, and former TLC CEO Michael Perik of misleading investors about the health of TLC and the benefits of its acquisition. The lawsuit alleged TLC used accounting tricks to hide losses and inflate quarterly revenues. O'Leary and his defendants disputed all of the charges, and none of the allegations were proven in court. Mattel paid $122 million to settle in 2003. O'Leary primarily blamed the financial meltdown on the culture clash between the two companies.[8]
After moving on from the legal issues associated with the sale of The Learning Company, some of O'Leary's first business ventures lead to financial misfortune. Along with backers from Citigroup, O'Leary unsuccessfully attempted to purchase the video game company Atari. At the same time, O'Leary made plans to start a video-gaming television channel which never came to fruition.[31]
In 2003, O'Leary became a co-investor and director at Storage Now, Canada's leading developer of climate controlled storage facilities. They produced facilities for many technology and pharmaceutical companies, such as Merck & Co., Inc., Pfizer Inc., and Johnson & Johnson. O'Leary learned of the opportunity through Toronto entrepreneur Reza Satchu, and invested $500,000 for a 13% equity in the business.[7] Through a series of real estate development, storage projects, and acquisitions, Storage Now became the third-largest owner and operator of storage services in Canada, with facilities in 11 cities. They were acquired by In Storage REIT in March 2007 for $110 million.[36] O'Leary's sold his shares, originally bought for $500,000, sold for over $4.5 million.[31]
