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October 30, 2000
A Marriage Made for Education: Wireless Start-Up Buying Web Portal Firm to Provide Services to Students, Teachers
By Neil Irwin, Washington Post Staff Writer

A Baltimore start-up that hopes to deploy hand-held devices in the nation's schools plans to announce today that it is acquiring an educational content company in McLean. MindSurf, which was launched in July as a joint venture of two of the region's biggest corporate players, is to acquire HiFusion, which has fashioned itself as a Web portal for young people. MindSurf executives characterized the transaction as an all-stock deal worth "eight figures," but said it is difficult to assign a precise value because of the deal's complexity.

"This accelerates our planned rollout schedule," said MindSurf President Bruce Davis, who views the acquisition as a way to quickly build content and a sales network for the Palm-like wireless devices it plans to sell to students and teachers for $150 to $200.

The acquisition gives HiFusion an exit strategy in a marketplace littered with the remains of content-based Internet start-ups that couldn't earn enough revenue to become profitable.

MindSurf is owned primarily by Aether Systems Inc., the Owings Mills-based provider of wireless data communication software and services, and Baltimore-based Sylvan Ventures, an arm of tutoring company Sylvan Learning Systems that invests in education-related technology start-ups. HiFusion is a privately held company launched this year whose investors included Venturehouse Group LLC, a Washington-based venture capital firm

MindSurf seeks to develop wireless communications devices that will help teachers, students and parents communicate. Company officials say that HiFusion's educational content will form a significant portion of the information it will make available on those devices, which are in pilot testing and are slated to be more widely available by next summer.

HiFusion offers a broad array of content and services customized for teachers and parents, and for students based on their age group. The HiFusion content that will be used on MindSurf hand-held computers might include reference materials such as dictionaries and teaching materials designed for different grade levels.

In September, HiFusion announced it would build "local learning communities" in 220 school districts across the country. Those connections, and a nationwide sales force 75 strong who made it happen, are a key part of the company's appeal to MindSurf, which has only 30 employees of its own. Davis said the company intends to retain all 150 HiFusion employees, and that senior executives of the company will assume management positions with MindSurf.

"It gives us a group of professionals who really know the online learning space," Davis said.

Copyright 2001, Washingtonpost, Newsweek Interactive and The Washington Post. All rights reserved.

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