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Social Networking - Wednesday, May 16, 2007

Rumor Watch: Say It Isn't So Club Penguin. Sony Wants To Buy Kids Social Network For $450M

When we profiled Club Penguin recently, we appreciated their chutzpah to keep passing on investment deals, growing the business virally, and to even pass on ad placements so as to keep the site kid friendly. We would have liked to see the Canadian company become a youthful Facebook.

PaidContent is reporting that Sony is in talks to buy Club Penguin for $450M , 7.5x 2007 projected revenue of about $60M. Apparently Club Penguin is already profitable and is operating at about 50% margin. Gigaom reports that News Corp had bid $200M but that was rejected. Disney would be an obvious buyer but it has a similar project underway that it has invested in called Imbee.

If the story is confirmed and Club Penguin takes the offer, then CEO and Lane Merrifield, age 28 and his co-founders will have enough Canadian dollars to live large in their town of Kelowna, BC.

Read - Sony In Advanced Talks To Buy Kids Social Gaming Service ClubPenguin (Paid Content)
Read - ClubPenguin Is The Hot Social Network, For The Age 8-14 Set (the a:c)
Read - Media giants love virtual worlds for kids (Gigaom)