Well Well Well! Disney = Club Penguin!!!

Extremely Happy Feet: Disney Acquires Club Penguin For Up To $700 million

Club Penguin, a social network/virtual world that has been on the market for some time, was acquired by The Walt Disney Company and announced today. An earlier deal with Sony fell apart over valuation and Club Penguin’s policy of donating a substantial portion of profits to charity.

The company, which launched in October 2005, has 700,000 current
paid subscribers and 12 million activated users, primarily in the U.S.
and Canada.

The WSJ
says the purchase price is $350 million in cash. Disney could pay up to
another $350 million if certain performance targets are reached over
the next couple of years, until 2009.

We mentioned Club Penguin a couple of months ago
when a competitor launched from IAC called Zwinktopia. The company is
killing it – projected revenues of $65 million in 2007 with $35 million
in profit. Having nearly 50% bottom line margin is exceptional.

I recently spoke to an exec of one of the companies that took a long
look at Club Penguin before deciding to pass. They said the charitable
donations were a big factor in passing. He also mentioned that much of
the success of the company was driven by movies such as Happy Feet. How
much longer are penguins really going to be the cool thing, he wondered.

Extremely Happy Feet: Disney Acquires Club Penguin For Up To $700 million

HOLY MANOLY.  This is actually a REALLY GREAT move by Disney.  It’s great on both sides.  Club Penguin gets a great protector & Disney gets a great service.  I’m a little worried about Club Penguin loosing it’s “Own Entity” feeling and getting completely DISNEY-I-FIED.  Disney has a way of doing that…

I’m an eager Penguin, looking forward to seeing if Disney messes with the system (as system that WORKS mind you), or if they become a doting god-parent of sorts… protecting & funding.

I think I’m going to chew on this for a wee while.  This caught me off guard (I had heard other rumors).  Wonder if Disney is going to keep the biz in Canada… or bring it back State-side?

All in all… That’s a lot of cash for some youngster penguins.

Hmm… second thought– what will this do to Toontown’s rumor about going “free”?

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  1. Wendy
    August 2, 2007 at 1:04 pm

    Well as a mom of two children who adore their penguins and their experience in the Club Penguin virtual world I am not surprised. The Penguin Phenominion has spread around our town by just word of mouth – little ones – and parents as well who are comfortable with the sites security features. I too, am worried though that Disney will commercialize the site and take that “small town” touch out of it. I also wonder, having recently priced tickets for Disney’s Amusement Parks, whether the $5.00 a month will be a thing of the past.
    We’ll just wait and see…

  2. August 3, 2007 at 6:45 pm

    According to wall street journal, the figure was $350 million.

    The extra 350 million is from “whose founders stand to make another $350 million if they meet performance targets through 2009.” -wsj

    Nice potential bonus. I suspect a hearty “good luck” is in order for those performance metrics though.

    Can you elaborate why you think this is a good move for Disney?

    To monetize this, Disney would have to turn it into a platform for marketing. Wouldn’t that alienate a large portion of their audience, leaving Disney with an expensive – empty – gated community online?

    They could turn it subscription ONLY. But from my extensive research (went on twice) 90% of penguins aren’t subscribers or are choosing not to dress their penguin.

    I see this as a bad move, but indicative of the current “bubble” mentality occurring around these kind of sites. Maybe I’m not seeing the upside some genius at Disney is envisioning.

    Brian

  3. October 13, 2007 at 10:15 pm

    i am a menmber of club penquin

  4. nikki
    February 21, 2008 at 2:49 pm

    i think that club penquin is the best

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