Club Penguin founders strike it rich
Disney pays Kelowna entrepreneurs $350-million for virtual penguin
world
WENDY STUECK
From Thursday's Globe and Mail
August 2, 2007 at 4:18 AM EDT
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 (U.S.) 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
said yesterday.
"We have been offered a lot of money from a lot of different people at various different
points," Mr. Merrifield said on a conference call with reporters.
Lane Merrifield, centre, co-founder and CEO of Club Penguin, holds Puffles along with
co-founders Lance Priebe, left, and Dave Krysko at the company office in Kelowna,
B.C., Monday, June 25, 2007. Puffles are stuffed toys that members of Club Penguin can
buy on the website as pets. Visitors to the Club Penguin site adopt a penguin pet
character, then enter an animated world that is a mix of gaming, chat and fantasy. (Jeff
Bassett/CP)
"For us, this whole decision was based around being able to connect with infrastructure
that we wouldn't be able to build on our own and being able to take this thing further, and
to more countries and more children around the world than we would be able to on our
own."
Club Penguin launched in October, 2005, and now has more than 700,000 subscribers
who pay $5.95 a month or $57.9