Fallen company's assets help to build iLearning

Salvage: The future of iLearning Inc. is being fashioned with the help of assets from the bankrupt Caliber Learning Network Inc.

October 03, 2002|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Out of the ruins of the defunct online training company Caliber Learning Network Inc., a Baltimore-based business is redefining itself - using Caliber's assets and hoping to learn from the failed company's mistakes.

iLearning Inc. provides corporate training and education over the Internet. The company is funded in part by Sylvan Ventures LLC, a subsidiary of Baltimore-based Sylvan Learning Systems Inc. that also funded Caliber.

"You hate to use the cliche of one plus one equals three, but in this case it really does," said Mark Herron, iLearning's chairman and chief executive.

Caliber filed for Chapter 11 bankruptcy protection in June 2001, after several rounds of layoffs and the resignation of its chief executive officer, Chris L. Nguyen. The company said in its filing that it had $29.8 million in assets and $22.8 million of liabilities.

Sylvan bought Caliber's assets in October for $750,000 - $255,000 in cash and the rest in liabilities. In January, iLearning bought those assets from Sylvan for an undisclosed amount.

Herron, who came on board with iLearning in February, said the company was able to acquire Caliber's clients, software and technology. About one-third of iLearning's 45 employees are former Caliber staffers.

iLearning has also created a new management team including chief revenue officer Kevin Thibodeau, who was the senior vice president of sales and marketing at Caliber. And the company persuaded Nguyen, who resigned as Caliber's chief executive in May 2001, to become iLearning's chief technology officer.

"He really is the founder and the vision of this technology," Herron said. "He's a tremendous asset."

Founded in 1999, iLearning creates software to teach corporate classes over the Internet. It also sells clients equipment so companies can create in-house studios for teaching virtual classes if they don't want to use the studios at iLearning or one of its partners.

A client that sells automobiles, for instance, can use the system to teach its salesmen around the country about the newest line of cars, with an instructor in a studio and salesmen following from their offices via the Internet.

"Instead of flying them in or sending them CD-ROMs or videotapes, they attend on-demand or live Internet programs," Thibodeau said.

The difference between what iLearning does and what Caliber did is that iLearning handled the Web-design part of Internet education while Caliber ran live, virtual classes. So, if the two were building an online university, Caliber would teach the classes while iLearning managed the library, meeting places, registrar's office and all of the administrative systems.

When the National Wildlife Federation wanted to urge activists to write letters against drilling for oil in the Arctic, the group sent out a video e-mail created from its in-house studio - including three cameras and a backdrop that can be changed to show different nature scenes.

"I don't know of any organization that has anything quite like this," said Bill Street, the group's senior director of education. "It's very convenient to have a studio in the office."

The Wildlife Federation was one of Caliber's customers that iLearning has now gained. And though the federation said it hasn't used the technology as much as it would like to, so far it has been an effective tool, Street said.

iLearning has about 50 customers, and it is no longer losing money, Herron said. With its makeover, iLearning said, it's not going to repeat Caliber's mistakes.

Caliber focused on too many markets, aiming its technology at corporate users, academics and associations, Thibodeau said. So iLearning's sales force is zeroing in on the corporate market.

Also Caliber owned the classrooms where the virtual lessons were taught, a business model that didn't work. With iLearning, clients can log on and take classes from anywhere that has Internet access.

They can also take lessons in classrooms that are rented from one of iLearning's partners, so the Baltimore-based company is not dragged down by the cost of owning real estate, Thibodeau said.

Trace Urdan of ThinkEquity Partners, a San Francisco firm that tracks education companies, said the market iLearning is breaking into is a tough one.

"The market itself is hard to define, so everybody's sort of looking for a differentiated niche," he said. "And iLearning, frankly, they're somewhat unique in their approach to the market."

Urdan said that because iLearning is not in the mainstream part of its market doesn't mean that the Baltimore company doesn't have a viable product.

He also said that iLearning's ties to Sylvan help it land customers and could give the company all it needs to survive the corporate downturn.

"They're effectively Sylvan's kind of in-house learning platform, and that provides them with a certain amount of stability," he said.

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