Breaking: Disney Acquires Club Penguin for $700 Million

Categories: Social Networking, Virtual World, Web IndustryPosted on August 1st, 2007

I was just emailed by the PR group at Club Penguin, they were just acquired by Disney. Apparently it’s for $700 million?

I’ve been watching Club Penguin before it started to get mainstream, in fact I even played around, and built my own little Igloo. Social networks arn’t just for teens, young kids are using them too.

KELOWNA, BRITISH COLUMBIA, CANADA and BURBANK, Calif. – Aug 1, 2007 – As a part of its strategy for long-term growth through applying new technologies to the creation and global distribution of high-quality family entertainment, The Walt Disney Company (NYSE: DIS) has acquired Club Penguin, one of the fastest-growing online virtual worlds for kids. The addition of Club Penguin to Disney’s existing online assets will further strengthen the company’s objective of establishing clear leadership in online virtual worlds for kids and families.

Can you smell bubble? That amount of money is just ridiculous. What’s so compelling about it? Kids are using their allowance money to buy virtual goods in the game.

Share This Post:

This entry was posted on Wednesday, August 1st, 2007 at 3:37 pm and is filed under Social Networking, Virtual World, Web Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

With $3.5 million income from just memberships, the $700 million price doesn’t seem that bad at all. I wonder if Disney are going to start incorporating some Disney characters into the site.

Kids will pay a fortune just to have Mickey Mouse and especially Winnie The Pooh.

Posted by Dallas Freeman on August 1st, 2007 at 4:05 pm

^ the above calculation was based on 700 000 users paying $5 / month

$5 being an average for membership costs per month

works about to be around $42 million a year in just memberships - that’s a quick profit turn around for Disney as it is

Posted by Dallas Freeman on August 1st, 2007 at 4:20 pm

Jeremiah - getting kids hooked on Disney early is a big factor I believe in the purchase. While Disney says they won’t change it at all, I bet it won’t be long before you start to see Disney related items in the world.

Posted by Allen Stern on August 1st, 2007 at 5:50 pm

I also see it as some kind of cross selling attempt. Disney had a bit of trouble getting their own network up and running if I remember correctly (check out the Disney Extreme site - not available to users outside the US).
So they’ve obviously decided to just buy their user base, which makes a lot more sense. Now you have 3 options: Piggyback on an existing network, build your own network or simply buy another one.

Posted by Uno de Waal on August 2nd, 2007 at 12:21 am

[...] gotten to know of the acquisition of Club Penguin by Walt Disney for a whopper $700 million here. The main thing that caught my attention in his article is the word “Bubble”. This is [...]

Posted by Walt Disney acquires Club Penguin for $700 million - Bubble? « Blue Heavens on August 2nd, 2007 at 12:46 am

Virtual Status symbols are just as relevant as real ones. In an era where kids are growing up in virtual worlds this is becoming more of a mass reality. I would say this is a great acquisition!

Posted by Adam Broitman on August 2nd, 2007 at 2:06 pm

[...] course I’ve learnt of the acquisition of Club Penguin by Walt Disney for a whopper $700 million here. The main thing that caught my attention in his article is the word “Bubble”. This is one [...]

Posted by Disney bougt cp « Kaitakwooa and Pink Slushe’s cp guide! on August 4th, 2007 at 9:06 pm

[...] it’s stylish to talk about the Bebo exit, the Last.fm windfall, etc. But Club Penguin got $700mm from Disney, a bigger exit than anything recently except YouTube to Google. Why? Because they have 650,000 [...]

Posted by Start the Billion Dollar Clock… on April 15th, 2008 at 8:43 pm