The Walt Disney Company Acquires Club Penguin



    Club Penguin Founders to Join The Walt Disney Internet Group

    KELOWNA, BRITISH COLUMBIA & BURBANK, CALIF., August 1 /CNW/ - As a part
of its strategy for long-term growth through applying new technologies to the
creation and global distribution of high-quality family entertainment, The
Walt Disney Company (NYSE:  DIS) has acquired Club Penguin, one of the
fastest-growing online virtual worlds for kids. The addition of Club Penguin
to Disney's existing online assets will further strengthen the company's
objective of establishing clear leadership in online virtual worlds for kids
and families.

    Since its launch in October 2005, award-winning Club Penguin has grown to
more than 700,000 current paid subscribers, and has achieved this remarkable
subscriber and user growth with very limited marketing efforts, relying mostly
on strong product and word of mouth awareness among kids. The site has more
than 12 million activated users, primarily in the U.S. and Canada, and is one
of the fastest growing online destinations for kids ages 6-14. The site
features animated penguin avatars that inhabit a snow-covered virtual world,
converse with other users, participate in group activities and create and
furnish a virtual home with currency earned inside the game.

    "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," said Bob Iger, Disney president and CEO. "Club Penguin
embodies principles that are of the utmost importance to Disney - providing
high-quality family entertainment and fostering parental trust. The founders
have woven together new technologies and creativity to build an incredibly
compelling, immersive entertainment experience for kids and families. Just as
with our own Disney.com, kids love Club Penguin and parents trust it; and we
are proud to welcome the creative team of Club Penguin into Disney. Combining
the creativity and knowledge of the Club Penguin team with our existing Disney
Online assets will help us further achieve our objective of establishing clear
leadership in the kids and families online virtual worlds space around the
globe."

    "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. We've found
that partner in Disney," said Lane Merrifield, one of Club Penguin's three
founders. "As a former employee of Disneyland, I've always had a great respect
for what Walt created. When he first envisioned Disneyland, he wanted to
create a safe place that he and his daughters could enjoy. In the process of
creating Club Penguin, we shared that passion and often pulled from Walt's
vision in the hope of creating a unique place online that we would be
comfortable letting our own children visit."

    Club Penguin, which will be called Disney's Club Penguin, will retain its
URL (www.clubpenguin.com) and will remain based in Kelowna, British Columbia,
Canada. The company's three founders, Lane Merrifield, Dave Krysko and Lance
Priebe, will join Disney and remain the senior management team of the unit.
Merrifield, Club Penguin's chief executive officer, will become an executive
vice president of The Walt Disney Internet Group (WDIG), reporting to WDIG
President Steve Wadsworth. Disney plans no immediate changes to the operation
or business model of Club Penguin.

    "What Lane, Dave and Lance have achieved in creating such a large
community around this incredibly engaging, immersive environment in so short
of a time is phenomenal," Wadsworth said. "We welcome their unique culture,
and both we and they are excited about seeing what can come from combining
their innovations with Disney's brand strength and entertainment assets,
global reach, and our No. 1 position with kids and families in Disney.com. We
expect to continue Club Penguin's strong growth well into the future,
especially by targeting markets outside of North America and through promotion
on our Disney-branded platforms."

    For Disney, the addition of Club Penguin is but the latest in a year of
successes in the Disney-branded online space. In early 2007, the company
debuted the new Disney.com, which remains the No. 1 site for kids and
families. Using the latest broadband-based technologies, the new Disney.com
offers all things Disney in one place on the Web, including videos on demand,
games (including virtual world MMOGs) as well as aspects of community, social
networking, user-generated content and creation of individual media lists, all
in an environment designed for kids with safety in mind.

    Disney was one of the first companies to enter the virtual world space
for kids and families with the introduction of Disney's Toontown Online in
2003, the first massively multiplayer online game for kids and families. Later
this year, Disney will launch Pirates of the Caribbean Online, and in 2008
will debut Disney Fairies, a virtual world aimed at girls and based on Tinker
Bell and her friends, which builds upon the popular Disneyfairies.com site
that launched in January 2007. DisneyFairies.com allows users to create,
outfit and name fairy avatars, as well as obtain and decorate a home for the
avatar, all in the world of Tinker Bell. To date, nearly 2.5 million Fairies
have been created on the site.

    Strategically, Disney plans to develop a Disney-branded connected
entertainment network that allows users to access Disney-branded content,
including virtual worlds and Disney.com games and videos, any time and
anywhere, as well as communicate with each other across platforms, through a
Web-based hub connected with PCs and mobile devices such as cell phones and
game platforms.

    Until now, Club Penguin's user base has been primarily located in the
United States, United Kingdom and Canada. By leveraging Walt Disney Internet
Group resources and experience, Club Penguin plans to create international
versions in Europe and Asia, as well as in the Americas.

    WDIG and Club Penguin management will be exploring ways to integrate Club
Penguin into the Disney-connected entertainment network over time.

    Club Penguin welcomes users of all ages, but is designed primarily for
kids ages 6 to 14. Club Penguin, like Disney's other virtual worlds, features
a velvet rope model of usage. While users can play for free for an unlimited
time and enjoy a portion of the virtual world's geography and functionality, a
user must subscribe in order to achieve status rank in the game, take
advantage of certain features or make purchases of in-game goods such as
furnishings for an avatar's igloo home. A subscription is $5.95 a month or
$57.95 a year. In addition to subscriptions, Club Penguin also generates
revenue from sales of merchandise online, such as plush versions of penguins'
pet puffles, t-shirts and gift cards.

    About The Walt Disney Company

    The Walt Disney Company (NYSE:  DIS), together with its subsidiaries and
affiliates, is a leading diversified international family entertainment and
media enterprise with four business segments: media networks, parks and
resorts, studio entertainment and consumer products. Disney is a Dow 30
company, had annual revenues of over $34 billion in its most recent fiscal
year, and a market capitalization of about $65 billion as of July 31, 2007.

    About Walt Disney Internet Group

    The Walt Disney Internet Group (WDIG) offers a compelling mix of
interactive entertainment and information content and services for Internet
and mobile devices for audiences around the world. WDIG is both a developer of
unique new media experiences specifically designed for Internet and mobile
media and a developer of new platforms for distributing content selected from
broad, existing entertainment divisions and libraries of The Walt Disney
Company.

    Its paramount mission is to provide a safe, secure environment for
consumers to experience the Disney brand anytime and anywhere as they inform
and entertain themselves, look to join communities with other Disney fans, or
shop for products and services. WDIG integrates the unmatched breadth of
content with a best-practices approach to Internet and mobile technology and
drives multiple revenue streams from premium content offerings, advertising
and ecommerce. WDIG's suite of properties includes Disney.com, Family.com,
Movies.com and mDisney mobile entertainment. Additionally, WDIG's Disney
Mobile phone service is the first comprehensive mobile phone service with
applications specifically developed to meet the needs of kids and parents.
WDIG also provides strategic leadership, business execution support and a
world-class technology platform for all the Walt Disney Company Internet
properties, including category leaders ESPN.com, ABC.com and ABCNEWS.com.
WDIG, which is headquartered in North Hollywood, Calif., has operations in
Asia-Pacific, Europe and the Americas.

    Forward-Looking Statements

    Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are made on the basis of the views and assumptions
of the management of the Company regarding future events and business
performance as of the time the statements are made and we do not undertake any
obligation to update these statements. Actual results may differ materially
from those expressed or implied. Such differences may result from actions
taken by the Company, including restructuring or strategic initiatives
(including capital investments or asset acquisitions or dispositions), as well
as from developments beyond the Company's control, including: international,
political or military developments; technological developments; and changes in
domestic and global economic conditions, competitive conditions and consumer
preferences. Such developments may affect assumptions regarding the operations
of the business of the Company including, among other things, demand for
products and performance of some or all company businesses either directly or
through their impact on those who distribute our products. Additional factors
that may affect results are set forth in the Annual Report on Form 10-K of The
Walt Disney Company for the year ended September 30, 2006 and in subsequent
reports on Form 10-Q under the heading "Item 1A--Risk Factors."




For further information:

For further information: The Walt Disney Company For News Media: Zenia
Mucha, 818-560-5300 John W. Spelich, 818-623-3266 or For Investor Relations:
Lowell Singer, 818-560-6601

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