Nobody can accuse Disney chief Bob Iger of being stingy.
When he sees something he believes will help the venerable entertainment conglomerate evolve -- be it Marvel, Pixar or his latest bauble, social media gaming developer Playdom -- he pays top dollar.
Over Iger's five-year stint in the top seat, Disney's acquisitions have totaled nearly $13 billion. Disney believes that's a small price to pay for a portfolio of brands that will help it attract a different generation of tech-savvy customers.
Like the Pixar and Marvel moves, Playdom -- which cost $563 million, plus a $200 million performance-based earn-out -- represents an opportunity for the Mouse House to modernize and expand its audience.
In the case of Marvel, Disney was acquiring properties that appeal to young men, a traditionally difficult demographic for the company to crack. Likewise, the Pixar purchase was an implicit acknowledgement that Disney's traditional animation division had plateaued and that the CGI studio was more finely attuned to today's audiences.
So, too, with the newest star in the Disney galaxy. By bringing Playdom into the Disney tent, the company gains a team well versed in new media. It also gets another bridge to the online world, one that brings with it several potential revenue streams. Disney plans to leverage Playdom by selling online goods and advertisements.
Plus, Playdom brings along serious Facebook and MySpace street cred. The Mountain View, California-based company has developed a number of popular games for social network sites including Social City, Sorority Life, Market Street and Bola.
“It’s still in its early days, but if done correctly, it has the potential to be a high growth engine,” said Mike Hickey, an analyst with investment firm Janco Partners. “This could grow by 30 to 40 percent. Where else could you find that?”
In making a big play for several new-media properties, Disney is bucking a trend among its entertainment-conglomerate brethren. Its growth spurt comes when other media companies such as Time Warner are constricting and divesting assets.
And as an analysis by Bloomberg last spring pointed out, Iger is a big spender who shows no signs of closing the checkbook soon. In the past month, Disney acquired not only Playdom, but also Tapulous, a maker of mobile games. The pricetag of that deal was not disclosed.
Many think that after years of sitting out the mergers and acquisitions boom -- at least until its 1996 play for ABC/Capital Cities -- Disney's expansionist drive is good business.
"Iger’s got very good judgment," Matthew Harrigan, an analyst with Wunderlich Securities, told TheWrap. "They can't create a Zynga in-house, so Playdom is a natural venue to extend their brands."
Of course, while Playdom's pricetag wasn't on the order of the $4 billion Disney paid for Marvel last year, let alone the $7.4 billion it coughed up for Pixar in 2006, it's still an expensive gamble.
“The only thing that surprises me is the price,” said Michael Pachter, an analyst with Wedbush Morgan Securities.
