Thursday, August 02, 2007

Disney buys an expensive $350m penguin

"They may be flightless in the real world but penguins are soaring in the virtual one, as borne out by Walt Disney Co.'s agreement to pay $350-million (U.S.) for Kelowna, B.C.-based Club Penguin.

The online club lets subscribers take on the identities of penguins that waddle and chat in spots such as a ski hill, custom-furnished igloos and a coffee shop. The deal, announced yesterday, generates a windfall for the company's three founders, who are its only shareholders, and highlights the burgeoning appetite for social networking sites that cater to a preteen audience.

Having fended off multiple offers from venture capital investors and would-be buyers, Club Penguin's creators decided deep-pocketed Disney would be the best partner to help a company based on a flightless bird spread its virtual wings, co-founder Lane Merrifield said yesterday.

"We have been offered a lot of money from a lot of different people at various different points," Mr. Merrifield said on a conference call with reporters."

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