Disney has purchased Club Penguin!

[drag n' fly]

I was on the Disney website today. We have been throwing around the idea of spending Christmas 08 in Disney. I noticed that Disney has purchased Club Penguin.(Like Webkinz minus the stuffie) Club Penguin was Canadian made and originated in Kelowna!

 

[carrie s]

I was on the Disney website today. We have been throwing around the idea of spending Christmas 08 in Disney. I noticed that Disney has purchased Club Penguin.(Like Webkinz minus the stuffie) Club Penguin was Canadian made and originated in Kelowna!

I didnt know that club penguin started in Kelowna,thats where I grew up.my DD loves club penquin and was so excited today when she read on their web site that they were bought by disney.

 

[briarberry]

That is interesting. My daughter also loves Club Penguin. She has been playing it for a few years. I didn't know it was a Canadian company. I wonder what Disney plans to do with it?

 

[drag n' fly]

It is in the news today


Disney buying Club Penguin website
Aug 2, 2007



Los Angeles Times - Moving to increase its online presence among children, Walt Disney Co. said Wednesday that it was buying the Club Penguin virtual community in a $350-million deal that could eventually be worth as much as $700 million.

The purchase gives the Burbank-based media giant an immediate foothold in social networking, a fast-growing business that big media companies have been increasingly drawn to in the wake of News Corp.'s 2005 acquisition of MySpace.com.

Disney said it would pay $350 million in cash for the website aimed at 6-to-14-year-old kids. As much as $350 million more will be added if the Canadian company's founders reach profit targets through 2009.

"This is exactly what Disney should be doing: looking for ways to leverage its strong balance sheet into areas where it doesn't have the expertise it needs to maximize the opportunities," said Richard Greenfield, analyst at Pali Research in New York.

The announcement came on the same day Disney said it had exceeded Wall Street expectations with its fiscal third-quarter earnings. Net income rose 5% to $1.2 billion, or 57 cents a share, in the period ended June 30.

Excluding one-time costs, profit totaled 58 cents a share, versus a consensus estimate of 55 cents among Wall Street analysts.

Growth was robust at the company's TV and radio networks, including ESPN, and at its consumer product and theme park divisions.

Strong international syndication sales for the ABC hits "Lost," "Desperate Housewives" and "Ugly Betty" also boosted revenue, the company said.

The film division was hurt, however, by the lack of a blockbuster DVD title on the scale of 2006's "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe."

In the earnings conference call, Disney Chief Executive Bob Iger said the company would rename its newest acquisition Disney's Club Penguin and market it across its entertainment outlets.

"Club Penguin embodies principles that are of the utmost importance to Disney -- providing high-quality family entertainment and fostering parental trust," Iger said.

Some of the larger networking sites such as MySpace.com and Facebook.com have been dealing with parental concerns about sexual predators potentially using them to track teenagers and younger children.

Launched in October 2005, Club Penguin has more than 700,000 paid subscribers and 12 million registered users, most of them in the United States and Canada. Visitors can adopt, name, feed and clothe virtual penguins, and they can chat and play games with other users.

Iger said Club Penguin had mushroomed largely through word of mouth and could grow further with the help of Disney's marketing muscle, especially in untapped areas overseas.

Traffic at ClubPenguin.com rocketed 329% in June from a year earlier, according to the research service Hitwise. It was the 131st-most-visited site in the U.S.

Club Penguin fits with Disney's family-friendly name and its general strategy of relatively small acquisitions, said Tuna Amobi, an analyst at Standard & Poor's.

"It's another asset that can complement the Internet initiative," he said.

Amobi said the website was already profitable and, although its cash flow wouldn't materially affect Disney's bottom line right away, in the long run it was likely to become an important piece of the company's online strategy.

In trading Wednesday before the earnings and acquisition announcements, Disney shares rose 83 cents to $33.83.

 

[drag n' fly]

Here is the Kelowna mention

B.C. children's Web site scores Disney payday
Us$350-Million Deal

Nathan Vanderklippe
Financial Post


Thursday, August 02, 2007


VANCOUVER - In what can be described as Canada's YouTube story, a runaway hit kid's Web site started in the British Columbia interior has been sold to The Walt Disney Co. for US$350-million.

The move surprised those who have watched Club Penguin fend off eager suitors since its launch in October 2005, including Sony Corp., which had offered a rumoured US$450-million. The Kelowna, B.C.-based company will immediately rename its virtual world Disney's Club Penguin.

The sale also creates the possibility the Club Penguin brand will be extended into movies, kids' toys and other media that Disney specializes in.

Club Penguin is a snow-covered virtual paradise for the 700,000 kids who have convinced their parents to pay a $5.95 monthly subscription charge. (About 11 million others have free accounts with more limited privileges). Inside the world, whose slogan is "waddle around and meet new friends," they can create their own penguin avatar, furnish their own igloo and roam a vast online landscape alongside their friends.

Club Penguin founders Lane Merrifield, Lance Priebe and Dave Krysko -- they financed its startup with their credit cards and credit lines -- built the original Web site to appeal to their own kids, and said they shared Walt Disney's original vision of creating Disneyland as a safe haven for his daughters to have fun.

Club Penguin is in many ways an owner's dream, offering dedicated annual revenues estimated at upwards of $40-million, all without the hassle of hitting up advertisers or proving click-through rates. The few online sites that have managed to convince users to sink their cash into subscriptions -- most notably Blizzard Entertainment's World of Warcraft -- have been wildly profitable.

But Club Penguin's founders had long resisted selling it. They built Club Penguin on a bedrock principle of protecting kids, and were leery of a buyer coming in, wresting away control and disrupting the trust they had curried with parents. The company had committed to keeping the world ad-free -- going against the grain of Disney itself, which recently relaunched its Toon-town Online as an ad-supported property -- and also donated a substantial portion of its profits to charitable children's work in needy areas including Uganda, Kenya and Romania. Those demands led them to turn down the 20-30 e-mails a week from people looking to buy in.

But Mr. Merrifield said last month they might be willing to sell if it would further the business into other languages. Yesterday, he said Disney will provide that ability.

"For us it really came down to do we try to build out this infrastructure independently? And obviously, being in a smaller city in Canada, the ability to be able to build out international infrastructure was pretty daunting," he said. "This is a very strategic move to be able to ? allow it to be explored and shared to more kids throughout the world."

Disney said it "plans no immediate changes to the operation or business model" of the company, whose 130 employees will remain in Kelowna.

© National Post 2007