y 1997 LeapFrog was off to a great start, with growing sales of its Phonics Desk and one other toy. But the company had potential to do more. It was in a unique position in the market and seemed to have tapped a demand other toy companies had overlooked. LeapFrog began looking for an investment partner who could provide cash for further growth. In 1997 Wood and his investors sold 50 percent of the company to Knowledge Kids, a division of Knowledge Universe, for $50 million. Knowledge Universe had been founded only a year earlier by Michael Milken, his brother Lowell, and Larry Ellison, CEO of Oracle Corporation. Milken was perhaps the most notorious financier of the 1980s, a high-flying dealmaker for Drexel Burnham Lambert who was ultimately convicted of six counts of securities fraud. Milken paid a fine of $447 million and served 22 months of a ten-year prison term. He was barred for life from working in the securities industry, and after his release from prison, still one of the richest men in the country, he worked in several philanthropic enterprises and began the holding company Knowledge Universe. Knowledge Universe was dedicated to education in a broad spectrum, from training of adult workers to daycare facilities. Milken and Ellison seemed particularly intrigued with the influence of new technology on education, and so LeapFrog seemed like a natural choice for the conglomerate to acquire. The company's Knowledge Kids division was headed by Michael Kalinske, a former president of one of the top U.S. toy companies, Mattel. Kalinske had the kind of expertise and contacts in the toy industry that Michael Wood could not duplicate. Although Wood remained president of his company, Kalinske's clout quickly pushed LeapFrog into new markets and greatly expanded sales.