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 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.
Club Penguin launched in October, 2005, and now has more than 700,000 subscribers who pay $5.95 a month or $57.95 a year. The privately held company does not release financial information, but Merrifield said it was designed to be self-sustaining from its inception and is profitable.
Founded by Merrifield, Dave Krysko and Lance Priebe, the site was designed to appeal to youngsters from 6 to 14 and provide an advertising-free zone that features penguin avatars through which subscribers chat, play games to earn cash and decorate their igloos.
The founders, who all have children of their own, wanted to create a virtual playground that would emphasize fun and creativity.
Photo by Jeff Bassett/CP.