Disney Acquires Club Penguin

Disney has spent £250 million to acquire children’s site Club Penguin, with the promise of $350 million more in two years.

Disney has spent $350 million to acquire the popular children’s web site Club Penguin, in a deal that could givethe site owners an additional $350 million later.   It’s a move by the giant in children’s entertainment to consolidate its position on the Internet.   Club Penguin was foundedin 2005 by three fathers from British Columbia. It’s a subscription site with over 700,000 members. Users are able to customize penguin characters and then play and chat together online.  Under the deal, Disney is paying $350 million now, with up to another $350 million at the end of 2009 if the site meets growth targets set by Disney.   Disney redesigned its own site at thebeginning of 2007, but it’s been losing ground to younger, fresher sites in recent years. The company plans to make Club Penguin part of its brand, with consumer products and possibly a themepark ride. Part of the strategy is to make Club Penguin known in Europe and Asia.   “While it is not a global brand today, our intent is to make it one,” said Robert A. Iger,Disney’s chief executive.   Club Penguin experienced 4.7 million unique visitors in June, a rise of 159% over the year before. The site will continue to be managed by its founders.