Sony offers over half a billion dollars for online kid-centric virtual game world.
Technology and Web 2.0 blog Techcrunch reports that Club Penguin, a child-friendly virtual world, is in talks with Sony about being acquired for over $500 million. Club Penguin's business model thus far appears succesful, with projected revenues for 2007 reaching $65 million and $35 million in profit. Currently, 500,000 active users, mostly young kids, subscribe to the site to play simple flash games and communicate with other members.
Competitive bidders for Club Penguin include AOL, Disney and Viacom. Montgomery Securities has been hired to represent Club Penguin during the takeover dealings. Negotiations between the two companies are heating over the topic of charitable contributions. Club Penguin donates large portions of the company's profits to numerous charities and seeks to continue the charity post-acquisition, whereas Sony seems to be opposed to the idea.