Click2learn transfers commercial custom development to NIIT and establishes NIIT as reseller of the Aspen platform

January 24, 2002

BELLEVUE, Wash. & NEW DELHI, India–Jan. 22, 2002–In a move that will

provide customers with the most comprehensive and technologically advanced learning

and knowledge solution to date, Click2learn (Nasdaq:CLKS), a leading provider

of enterprise learning platforms and NIIT, a global IT education leader and

one of the largest knowledge solutions providers in the world, today announced

that they have entered into a strategic development and technology alliance.

Under the terms of the multiyear, multifaceted alliance, NIIT and Click2learn

will jointly develop learning and knowledge solutions for the marketplace using

Click2learn’s Aspen platform and NIIT’s knowledge services.

NIIT will acquire the assets of Click2learn’s custom development business and

will be Click2learn’s exclusive commercial custom development partner. The alliance

also establishes NIIT as a reseller of Click2learn’s highly acclaimed Aspen(TM)

Enterprise Learning Platform and ToolBook line of products.

In addition, the Aspen platform will be used by NIIT in its development projects

by its over 500 developers worldwide and for its internal corporate university,

which serves 3,500 employees worldwide. It will also be the foundation for its

commercial e-Learning initiative that reaches over 500,000 students.

"NIIT’s large footprint, scalable infrastructure and rich experience will

provide our customers with the rapid, cost-effective content solutions they

require while allowing Click2learn to focus our resources squarely on the Aspen

platform," said Kevin Oakes, chairman and CEO of Click2learn. "This

alliance is truly a win-win. Click2learn gains a strategic partner for its custom

development business and a global reseller for Aspen, while NIIT gains a significant

competitive edge for their solutions offering with the addition of Aspen and

ToolBook. Even more exciting is that together we can provide value to our customers

through a fully integrated technology and services offering and better leverage

our combined customer base."

"When you team the industry’s leading platform, Click2learn’s Aspen, with

one of industry’s largest custom developers, NIIT, together we become a significant

force in the market in all meaningful measures, including revenue, customer

base, depth of products and services offered, and technology leadership,"

said Vijay K. Thadani, CEO of NIIT. "NIIT’s global reach will help serve

Click2learn’s large customer base, including more than half of Fortune 100 companies."

Click2learn has completed over 300 e-Learning platform implementations, which

represents an active user base of well over 3 million users. Click2learn’s broad

customer base spans multiple industries and includes over half of the Fortune

100. NIIT has been recognized as one of the top 15 IT training companies in

the world by IDC, and was on Forbes list of 200 best small companies outside

USA. The company has grown rapidly in recent years, reporting $237 million

(USD) in revenue for 2001. NIIT has operations in 38 countries and includes

global companies such as British Airways, Prudential Insurance, Gateway, Pearson,

Computer Associates, Goldman Sachs, Hewlett Packard, IBM, ING Group, Microsoft,

NETg, Office Depot, Oracle, Sony, Sun Microsystems and World Bank among its

global client base.

"Click2learn and NIIT have demonstrated unrivaled leadership and vision

in the e-Learning and training markets," said Cushing Anderson of International

Data Corp. "Teamed together, they create a global enterprise with unequaled

depth both in terms of world-class learning technology and custom content development.

They will be a formidable force in the global learning market."

The Aspen Platform: A New Model in Enterprise Learning

Described by industry analysts as the new model for enterprise learning technology,

Click2learn’s Aspen platform is designed to facilitate the capture, management

and dissemination of corporate knowledge to improve productivity and business

performance. The platform has an open architecture and is made up of three modular

but independent components that are designed to work as an integrated system.

The Aspen Learning Management Server (LMS) is used for competency management,

skills-gap analysis, tracking of assessments and resource management for either

e-Learning or instructor-led training. The Aspen Content Development Server

(CDS) is used to rapidly author highly effective e-Learning content and manage

large, team-based content development projects. The Aspen Learning Experience

Server (LXS) meanwhile, delivers a personalized learning experience to improve

knowledge transfer and facilitate knowledge exchange with a community of peers

and experts.

Alliance Details

Click2learn will transition all current commercial custom development projects

and related assets to NIIT over the next two months. Click2learn will continue

on-going custom development work for government contracts.

Click2learn reports revenues in three categories: Content Services, Platforms,

and Tools. For fiscal 2002, after the transfer of commercial custom development

business to NIIT, the company expects Content Services revenue to total approximately

$4.0 million. The Content Services revenue category will consist primarily of

government content development services, strategic consulting services, and

commissions generated from the NIIT alliance.

Upon completion of the transaction with NIIT, Click2learn expects their higher

margin Platforms and Tools revenue to be the bulk of their total revenue in

2002, thus greatly reducing cost of goods sold and accelerating improvement

in gross margins.

Click2learn expects to record a one-time charge of approximately $2.5 million

for the March 2002 quarter to cover all future facility costs and remaining

expenses related to the custom development business acquired by NIIT. Consistent

with previous guidance, the Company continues to expect positive cash flow on

a pro forma basis for the March 2002 quarter, and positive earnings per share

on a GAAP basis for the June 2002 quarter.

Additional details about the alliance and financial guidance for fiscal 2002

will be provided when Click2learn reports their fourth quarter and year-end

results for fiscal 2001 on Wednesday, January 30, 2002.

About Click2learn

Click2learn (Nasdaq:CLKS) is a provider of enterprise software for Global 2000

organizations seeking to capture, manage and disseminate knowledge throughout

their extended enterprise. Using Click2learn’s Aspen Enterprise Learning Platform,

organizations can deploy highly interactive, personalized learning initiatives

to achieve strategic business objectives. Many of the world’s best-known corporations

use Click2learn’s technology and award-winning content development services

to improve workforce performance, educate customers, and publish large volumes

of learning content. Click2learn’s clients include Microsoft, Fidelity Investments,

Wells Fargo, Symantec, Prudential, American Airlines, ADC Telecommunications,

Ernst & Young and the New York Stock Exchange. Based in Bellevue, Wash.,

Click2learn (, 800/448-6543) operates offices in the United

States, Canada, and Europe.

About NIIT

NIIT, a leading Global IT Solutions corporation, operates in 38 countries with

Regional Headquarters in USA, Europe, ASEAN and Japan. NIIT has evolved from

a predominantly education company to an IT Solutions Corporation with equally

balanced Software and Training revenues.

The Knowledge Solutions Business (KSB) of NIIT provides end-to-end e-Learning

and Knowledge Solutions. KSB’s competencies in the areas of custom content,

custom technology solutions and custom enterprise knowledge solutions give it

an edge as a unifier that delivers complete learning offerings. NIIT’s Knowledge

Solutions Business was assessed at Level 5 of the SEI-CMM quality framework

in June 2001, the world’s first content development facility to be so assessed.

NIIT was awarded "The Outsourcing Contract of the Year" award by the

Financial Times publication, The Banker, UK in December 2001.

This announcement contains forward-looking statements that involve risks and

uncertainties, including information contained in this document where statements

are preceded by, followed by or include the words "believes," "plans,"

"intends," "expects," "anticipates" or similar

expressions. For such statements, the Company claims the protection of the safe

harbor for forward-looking statements contained in the Private Securities Litigation

Reform Act of 1995. Actual results may differ materially from the results predicted,

and reported results should not be considered as an indication of future performance.

Factors that could cause actual results to differ from those contained in the

forward-looking statements include, the ability of Click2learn to transition

is custom content development business to NIIT, the ability of NIIT to deliver

such services in a manner that meets customer expectations, market acceptance

of Click2learn’s e-learning solutions and competing e-Learning offerings in

markets where NIIT is acting as a reseller, NIIT’s ability to successfully implement

Click2learn’s solutions and increase revenues, Click2learn’s ability to successfully

address technological developments and standards and the risk factors set forth

in filings the Company has made with the SEC.

Click2learn and Aspen are trademarks of Click2learn. All other company and

product names are the trademarks of their respective owners.

CONTACT: Click2learn

Sara Britton, 425/637-5872 (Public Relations)


Jeff Howlett, 425/637-1514 (Investor Relations)