in a sale transaction. It looks like the company is locked in talks,
possibly exclusive, with Sony, and the price is “at least half a
billion” says a source close to the deal.
We mentioned Club Penguin last month
when a competitor launched from IAC called Zwinktopia. The company is
killing it - projected revenues of $65 million in 2007 with $35 million
in profit. Having nearly 50% bottom line margin is exceptional. The
company has around 500,000 active users.
A stumbling block in the negotiations appears to be a disagreement
over charitable contributions. Club Penguin donates a significant
portion of profits to charity and wants this policy to continue
post-acquisition. Sony reportedly isn’t hot on the idea.
Club penguin is a virtual world for young kids. Sony may see
significant synergies by tying it into their Playstation platform.
Other bidders that were in talks until very recently reportedly include
AOL, Disney and Viacom.
This is good news for Club Penguin’s virtual world competitors as
well - which broadly includes Second Life, Runescape, Gaia, Habbo
Hotel, Cyworld, Neopets, Club Penguin, Webkinz and others