On a call with Disney CEO Bob Iger now while he announces the company’s acquisition of Club Penguin, which he describes as a perfect fit. It…

imageOn a call with Disney CEO Bob Iger now while he announces the company’s acquisition of Club Penguin, which he describes as a perfect fit. It’s a cash payment of $350 million and an opportunity to earn out an additional $350 million between now and 2009.

The virtual world for kids 6-14 launched in Canada in 2005 and claims 700,000-plus paying members; subscriptions run about $6 or $58 a year. The site also makes money from virtual goods and other online merchandise sold through the site.

Founders Lane Merrifield, Dave Krysko and Lance Priebe will join Disney and remain the senior execs responsible directly for Club Penguin. Former Disneyland employee Merriefield, now the CEO, will be an EVP of the Walt Disney Internet Group reporting to WDIG president Steve Wadsworth. The founders are the only shareholders; each stands to make $115 million. More after the jump…

The combination of Disney and Club Penguin made sense all along but Disney seemed to be more inclined toward growing its own communities — Toontown (2003), Disney Fairies (launched in 2007 with a game coming in 2008), the upcoming Pirates — in house. Iger said the company is still committed to that strategy and thinks it will be successful but sees in Club Penguin a successful standalone business. With the exception of changing the name to include Disney and supporting the company, Iger promised: “Club Penguin is going to continue to exist as is. … The experience will not change at all. It will continue to evolve.” Iger added: “We really don’t intend to get in the way of that or do anything by virtue of the way we own it.”

For those of you just tuning in, we reported in May that Sony was in advanced talks to acquire the virtual world for what we were told was about $450 million, roughly a 7.5 multiple based on projected revenue of about $60 million — which struck some people then as high. But we were told then the self-funded company is already profitable and operating at about 50 percent margin

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  1. I disagree with your comment –

    "When I mentioned to Iger their expressed concerns about being owned by a corporation—Sony in the case of most we heard from or read— he said that wasn’t anything they had experienced. He may have thought I was referring to Disney ownership"

    Obviously you don't know or have read about the Club Penguin subscriber base… for the most part they are 10 year old kids… why would they care who owned the service if it remains Club Penguin. Staci it sounds more like you are puffing up making sure the readers here know you asked IGER a question…need to have more substance behind your questions…

    Oh and when I just asked my two 10 year olds if they mind that Disney owns Club Penguin their comment was "Cool".

  2. Great article.. but I think there is more Iger isn't saying.. http://martysmind.net/2007/08/01/penguins-disney-duh/

  3. Staci D. Kramer Thursday, August 2, 2007

    Thanks, Steve. No puffing involved, just transparency. We have heard from — and have read elsewhere — numerous comments from CP loyalists concerned about changing ownership, no matter who it is. You may not care, your kids may be thrilled — great. We may not see the same reaction to Disney that came when Sony was in talks. But until they are reassured by action that corporate ownership doesn't mean the kind of change they fear, if the pattern from before follows, some CP enthusiasts are likely to be concerned and will be vocal about it. That's what I was trying to get at with the question — how Disney is going to handle it.

  4. I am glad that these entrepreneurs hit the motherload. And having my own kids site catering to the same age group I can tell you they won't care at all about disney buying the site. These guys nailed the online world for kids faster than anyone on the web and they deserved this payday.

    Greg Writer
    Children's Educational Network

  5. samuel sanchez Friday, August 3, 2007

    well guess what greg is right because iam a 12 year old kid and i dont really care about who bought clubpenguin aslong as it's going to stay fun and exciting my clubpenguin character is rock dude 95. but now that i heard about this iwant to know about the Issues like : is CP going to change in any way

  6. i am a kid very intrested in this kind of subject and i was wondering in several more years from now will disney be changing this world becuse im talking as one penguin but my voice is coming from thousands do not cahnge club penguin at all it perfect im not talking about new rooms clothing catologs and ilgoo upgrades no but like the hole thing in its self just keep cp and dont take if of the web you will get thousends of hate e-mails!!!!!

    p.s yes i am just on kid but very powerful in words!!!!!!!

  7. club penguin is being made too safe and is like all of the other games for little kids… they disclude my age group, middle school. it use to be that one sanctuary where we could socialize w/ each other. as aaron said dont chage club penguin! too late it already sucks. and i send hate letters everyday and i've heard about sending spam so disney will quit . as soon as i figure out how to do that, i will. they make my stomach churn with regret of ever spending my own money for a membership! i hope they enjoy hatred because a lot of that is coming their way!


  9. A very shrewd business move by Disney. I believe Club Penguin’s success can be traced back to when it was first advertised on Miniclip.com back in March last year. I would guess that a very large proportion of its userbase found out about it by logging on to Miniclip, where it has remained as the most played game for about a year now. Both companies will be able to prosper as a result of Disney’s investment.

    The best thing about Club Penguin is that it is fun to play for children and adults of all ages, as shown by the comments from other people here. It is incredibly safe compared to other social nextowrking sites, because you, the parent can control what your child says and/or does.

  10. yo your a liar staci nothing works and if i do not have 300000000000 by tomrrow well i hate this site

  11. I hate club penguin with a passion

  12. seim byosjhrthyndrmu Sunday, March 9, 2008

    Shops name is…
    Muhya… Muhya…

  13. why pay 2 b a member
    just 2 buy clothes
    it really sucks

  14. Jackie Chan Tuesday, June 3, 2008

    Runescape is better than frickin club penguin!!!!!!!
    I am in fighting heaven.

  15. I'm a user, and subscribing member, of Club Penguin.
    I hope the Disney company will continue to improve Club Penguin!

    ~Airea =)

  16. club penguin shoud be recreated because it is kinda boring
    and not much to do when your not a member

  17. CLUB PINGUIN is a boring game when your not a member
    I hate this game with all my heart !!!

  18. Clup pengwinn is a very nise came to play but it is dificalt geting conis so please i nead money

  19. please i need money blease

  20. Jenny Lairony Monday, July 14, 2008

    Well I love Club penguin but penguins say things like they are robbers,babies (people pretending) are gross saying "I did a poopoo!",some are just mean !
    I reccomend Webkinz better for my son. I don't want him dreaming of him being a baby in a diaper saying " I need a doctor ! My pinus exploded !"

  21. Club penguin is fun but people can be gross and mean and too emotional. Also its hard to earn coins ! I reccomend Webkinz

  22. i want club penguin

  23. i want 350million in clubpenguin

  24. I want 799million in cluppenguin

  25. loveing it here love it!!

  26. Disney SHOULD NOT HAVE BOUGHT CLUB PENGUIN.Disney banned me forever :(!!DISNEY should change club penguin back.The game is wayyyyyyyyy to safe!

  27. And im a 9 yrs old!

  28. i love club penguin! and it is very good this safe ,i hope it will never shut down! p.s. it is not that safe!

  29. In Club Penguin some people have been leaving out letters in cuss words.I love this game but people have been getting horassed by other people. I think that they should shut down the website it is the most sinful website I have ever been on.I think that webkinz is a much safer website! So if hate mail works or calling the editors whatever you do SHUT IT DOWN!

  30. Well out of everything that other people are saying .


  31. I think it is not a good idea because we need to save money for charity.

  32. arnold schwartzenegger Tuesday, February 24, 2009

    hhahahah club penguin membership is so worthless

  33. I looooooooove it.my penguin is iruleall10.im a memeber.i love to pretend im a baby and somtimes a mom.I love doing tum tum.I especially love asking for tum tum.ROCK ON CLUB PENGUIN.even though im a member i LOVE NON MEMBERS. GO NON MEMEBERS

  34. Plz let 5050 precious be a spy i am tired of keep doing it i do right qustion i am just asking u plzplzplz pretty pretty plz i want club peguin to be safe so look at my awers and cheek it

    Thank u best wishes want to be a spy ps the master is nice thanks xxxxxxx
    my name is christana my email is my little princes@hotmail.co.uk

  35. clubpenguin has been at its worse since disney took over. All they are are money grubbers. If you arnt a member, they rub it in your face and they try to get you to become a member! Well newsflash clubpenguin! some people may not beable to afford memberships! maybe some peoples parents don't have time to get memberships for their kids! Some parents just don't let their kids do that because some adults are just stupid like that!Because of this nonmambers are treated likeCRAP by other penguins! It was better when miniclip owned clubpenguin because if you couldn't become a member they didn't rub it in your face!!!! MINICLIP LET YOU HAVE FUN FOR FREEEEEEEEE!!!!!!!!!!!!!!!

  36. Hey friends!!!!!!!!!!! Disney and club penguin both are very good sites… Clubpenguin waddle around, metting new friends, interesting games, parties with well decorated places…. and disney is the same metting silvermists, rosseta, fawn, iridessa etc…… and new games both are the very good sites i must say!!!!!!!!!! But ya in clubpenguin membership is worthless becoz they tell us to write our credit number and from their computer they take out all the money from the credit card…… and when our father gives to pay money from the crdit card there is no money…… isnt that so mean of clubpenguin to behave like that……. and there are some penguins in club penguin that they uselessly report them when they have done nothing……. but then also clubzzy and disney are the best sites ever!!!!!!!!!! 3 cheers!!!!! Soooooooooooooooooo what else to discuss with you all????? and they are some also sites which are also very good to play. you know frendz i have atleast two pages of websites…. which i play often…… i wil tell you some….. there is webkinz, ejunior, y8, everthinggirl and so on it goes……. ok frendz bye!!! plz anyone dont tell bad about our wonderful, fabulous and marvelloys sites that is clubzzy and disney!!!!!!!!!

  37. i want A FREE MAMBERSHIP plezzzzzzzzzzzzzzzz

  38. Im a member on clubpenguin and its really fun!!!! When i get banned my friends say crap because they know my pass!!! ummmmmm……. I have penguin storm 11!!!! its so fun! lol :D :D :D :D :D :D

  39. las cosas que me mandaron
    por facebook

  40. i hate disney aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa i had a long period when i didnt play on it
    now i go on alot disney ruined it i shud no im a beta when cp announced disney was cumin i screamed
    ps u might think im ova reacting but i has no life and im nine

  41. SCREW THIS! I WANT CP BAK! sry if ove reacting

       the game is so fun!
         + i hate the clown pic on the site

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