Disney to Buy Club Penguin - Wall Street Journal, 8/1/07

[Darkbeer]

http://online.wsj.com/article/SB1185...googlenews_wsj

Seeking to bolster its online presence among kids, Walt Disney Co. is expected to announce it is buying Club Penguin for $350 million in cash, according to people familiar with the situation.

Disney, which is announcing fiscal third quarter results today, has agreed to pay up to another $350 million to Club Penguin's founders if the company reaches certain performance targets through 2009, the people said.

Founded in late 2005, Club Penguin offers kids the ability to customize their own virtual penguin. Penguins chat with other virtual penguins, play games and earn currency to buy accessories.

Club Penguin's founders will continue to run the site out of their headquarters in Kelowna in British Columbia, Canada, people familiar with the situation said. The site will be renamed "Disney's Club Penguin."

The acquisition is Disney's first in the virtual world and social networking arena. Disney has sat on the sidelines in the past couple of years as rival media companies snapped up online properties. The Burbank, Calif.-based company has preferred to take an in-house approach to building its Internet presence. In a key move earlier this year, it re-launched its core disney.com site.

[merlinjones]

Always chasing fads. Creating new ones is more fun.

[cellarhound]

Always chasing fads. Creating new ones is more fun.

What, Merlin, don't like the life of being a Pirate on the Accountantcies?



Yar, Capt'n Iger, what other competitive tech business will we be pilligein' next, arrrrgh!

The sad thing is... Rupert Murdoch did this to the Dow Jones... and all Iger gets is a meger Club Penguin... doesn't seem equal, now, does it?

[mouseinphilly]

And somewhere, Burgess Meredith is crying.

[DippyDawg'32]

Penguins - dancing and surfing as comical animated creatures on film; in real life they're still just fat little birds that can't fly and get eaten by big sharks. Ahhh, now this makes sense....

[Socrates]

I just did some quick calculations. Disney would have to 4x the Penguins and keep a consistent subscription for 2 years to even begin to make back the money. Does Iger and friends believe this is going to happen, or is this just a case of Disney flexing its financial power and saying, "look what I can do"

[Darkbeer]

Actually they think they can expand the website by drawing more international folks, and then promoting the website at the parks and on its TV/Radio programs. (per the 3Q conference call)

[Socrates]

Will it be enough? Hopefully this trend lasts long enough to win over a large international populas on their online world and an increased longevity, but we are talking about 350 million with an even possible 700 million. This is a large chunk of money, not including the upkeep of the server and now a fairly substantial marketing scheme. Is it worth it?

However I do see the point of bringing a greater public eye into the Disney online scene, if this does succeed Disney will make it back and more in consumer awareness.

[mrderp]

There's always the possibility that Disney hopes to take some of the technologies implemented in Club Penguin and roll them into VMK, such a client that doesn't run on a 6 year-old web "standard" that runs poorly on Macs.

/venting

[nevi12]

Honestly, i think club penguin kinda sucks. You can barely do anything unless your a member which costs 5 dollars a month. Not bad, but i don't play enough to do that. I hadn't been on club penguin in months, and i just got on earlier today and saw the thing about Disney buying it. I'm actually kinda hoping Disney makes club penguin more enjoyable, and make it so you don't have to pay to actually do something.

[Barbossa]

It's funny, I live in Kelowna where Club Penguin is located and never heard of them until a couple of days ago I found them listed on Monster.com with some job postings.

[Crazy Legs]

wow they buy in the club

[MasterGracey]

I'm at a loss for words at how massively lame this acquisition is.

[Barbossa]

You know, this being in my hometown and well, in Canada in general, it's a good thing it's not called Club Seals!

[DippyDawg'32]

You know, this being in my hometown and well, in Canada in general, it's a good thing it's not called Club Seals!

50,000 kudos points for this eh