Disney has purchased Club Penguin, a kid-friendly game world, for over $350 million.
Following the collapse of acquisition talks with Sony, Disney has swooped in and nabbed children's virtual world Club Penguin in a $700 million deal. The founders, Lane Merrifield, Dave Krysko and Lance Priebe, will receive $350 million in cash and another $350 million payout dependent upon the website reaching certain earning levels by 2009. One-time Disney employee and current Club Penguin Chief Executive Officer Merrifield will become the new Executive Vice President of the Walt Disney Internet Group (WDIG) reporting to WDIG president Steve Wadsworth.
Disney intends on maintaining Club Penguin's independence. Bob Iger, Disney's CEO, said, "Club Penguin is going to continue to exist as is. The experience will not change at all. We don't intend to get in the way of that or do anything that would in any way have a negative impact on their business. ... This acquisition is consistent with our strategy of leveraging technology to create and deliver high-quality entertainment around the world and our commitment to investing our capital to generate growth and value for our shareholders."
A message from the Club Penguin site reaffirms that the site's integrity will survive the merger:
When we launched Club Penguin in October 2005 we had a clear vision of a virtual world so fun and safe that we, and other adults around the world, would feel completely comfortable letting our own children and grandchildren visit. As word about Club Penguin spread and the popularity of the site grew, we were approached by countless international organizations about partnerships. From the outset, we made it clear we weren't willing to compromise the integrity of what we'd created and would only work with a company that shared our founding principles and core values.
As the site's founders, we will continue to lead and guide Club Penguin, retaining control over the day-to-day operations and direction of the site while working closely with Disney to make Club Penguin the best it can be. In addition, we remain committed to our policy of allowing no advertising on the site.
"We have been actively searching for an organization that not only shares our values and concerns for children, but also has the ability and desire to help us bring Club Penguin to more children throughout the world," Merrifield said. "We've found that partner in Disney."