Rosetta Stone Acquires Online Language Company Livemocha

  Rosetta Stone Acquires Online Language Company Livemocha

  Purchase of Vast Online Community & Robust Technology Platform Accelerates
                      Rosetta Stone’s Shift to the Cloud

Business Wire

ARLINGTON, Va. -- April 2, 2013

Rosetta Stone announced today that it has acquired Seattle-based Livemocha,
one of the world’s largest online language-learning communities, for $8.5
million in cash. Bringing with it a robust and extensible cloud-based learning
platform and a community of over 16 million Livemocha members, the transaction
accelerates Rosetta Stone’s transition to cloud-based learning solutions and
reinforces its leadership position in the competitive language-learning

“We are in the process of transforming Rosetta Stone to be the most dynamic
and ubiquitous technology-based learning platform in the world,” said
President and Chief Executive Officer Steve Swad. “Our acquisition of
Livemocha will help accelerate that transformation. With Livemocha and its
vibrant online community on our side, Rosetta Stone will reach more people and
change more lives than ever before.”

With members hailing from 195 different countries, the Livemocha community
boasts over 16 million people—including language experts, instructors and
multi-linguists—all teaching, learning and interacting online. The company has
pioneered the use of crowd-sourcing to drive content development and social
engagement in the realm of language learning. The combined strength of the
Livemocha community and Rosetta Stone’s innovative product development and
marketing capabilities uniquely positions the company to meet the changing
needs of learners around the world.

“Rosetta Stone is a marvelous partner for us,” said Livemocha CEO Michael
Schutzler, who will assist in post-acquisition integration efforts as a senior
advisor to Rosetta Stone CEO Swad. “From the beginning, Livemocha’s mission
has been to create a world in which every human being is fluent in multiple
languages. Rosetta Stone’s brand, resources and reach will enable us to
continue that mission.”

Livemocha will remain in Seattle. Having recently established product
development offices in Austin, TX, and San Francisco, CA, the new location
expands Rosetta Stone’s US footprint—an important factor in attracting talent
to fuel the company’s development of new products. Indeed, Livemocha’s
sophisticated and flexible technology platform is expected to be part of the
foundation for the next wave of Rosetta Stone solutions.

“Livemocha will enable us to quickly migrate our legacy products to a
future-proof technology stack with a modern, cloud-based architecture and
contemporary means of distribution,” said Rosetta Stone Chief Product Officer
West Stringfellow. “But even more exciting, it gives our customers more
choice. Livemocha presents us with a low-cost or even free alternative product
to offer learners around the world. It becomes a ‘ladder of learning and
value’ for our customers.”

To be sure, geographic expansion is an attractive feature of the acquisition.
While Livemocha does add to Rosetta Stone’s already premier presence in the
US, its high concentrations of users in China, Russia and South
America—particularly Brazil—make it an even more compelling complement to
Rosetta Stone’s international footprint. Livemocha’s worldwide community
brings vibrant connectivity to Rosetta Stone’s existing hubs in Europe, Asia,
Latin America and the Middle East.

“However you view it—geographically, operationally, technologically,
culturally—Rosetta Stone and Livemocha are a terrific fit,” said Rosetta Stone
CEO Swad. “This acquisition will enable both organizations to grow and deliver
value faster and more effectively than either could alone. This is a good deal
for our business, a good deal for our customers, and a good deal for language
learners all over the world.”

About Rosetta Stone Inc.

Rosetta Stone Inc. provides cutting-edge interactive technology that is
changing the way the world learns languages. The company’s proprietary
learning techniques—acclaimed for their power to unlock the natural
language-learning ability in everyone—are used by schools, businesses,
government organizations and millions of individuals around the world. Rosetta
Stone offers courses in 30 languages, from the most commonly spoken (like
English, Spanish and Mandarin) to the less prominent (including Swahili,
Swedish and Tagalog). The company was founded in 1992 on the core beliefs that
learning to speak a language should be a natural and instinctive process, and
that interactive technology can activate the language immersion method
powerfully for learners of any age. Rosetta Stone is based in Arlington, VA,
and has offices in Harrisonburg, VA, Boulder, CO, Tokyo, Seoul, London, Sao
Paulo and Dubai.


Rosetta Stone Inc.
Media Contact:
Jonathan Mudd
Investor Contact:
Steve Somers, CFA
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