Disney buys Club Penguin

Disney has purchased Club Penguin, an online virtual world, for USD 350 million.

Club Penguin is operated by New Horizons Interactive. Disney purchased all outstanding shares of the company for USD 350 million, and may pay an additional USD 350 million if certain "predefined" earnings targets are reached.

"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," Disney president and CEO Bob Iger said.

Club Penguin founder and CEO Lane Merrifield will become an executive VP of the Walt Disney Internet Group. Co-founders Dave Krysko and Lance Priebe will remain as the senior management team for the unit as Disney employees.

There are currently 700,000 paying subscribers on Club Penguin, primarily in the US and Canada, with ages averaging from 6 to 14 years-old. Club Penguin was rumored to have attracted Sony Corp. and Viacom as potential buyers.