Disney has officially lost its mind. The Immodest Mouse bought Club Penguin, a social networking site for the tween and pre-tween demo. As the name suggests, Club Penguin allows you to make your own penguin avatar and enter a virtual world where you can endure the brutal, constantly near-death existence of a penguin to the High School Musical soundtrack. Nothing eases the pain of standing on the outer edge of a pack during a blizzard on the verge of starvation and metabolic shutdown than "We're All in This Together."

Capitalizing on the popularity of penguins, who have displaced the morbidly obese in Hollywood as the de facto generators of lazy comedy (we all know, from Eddie Murphy movies to Big Momma's House to Tyler Perry that everything fat people do is hilarious, but we are just beginning to discover that everything penguins do is hilarious, like surfing, dancing, or getting eaten), Club Penguin was founded by three Canadian dads in 2005. The site is ad-free, which makes it all the more un-monetizablelicious.

Disney paid $350 million for Club Penguin. The site must be huge to generate a price that’s almost 70% of what MySpace went for, right? Here’s the kicker – the site has 700,000 users. That means that Disney paid $500 per user (on what we’re sure is a pretty sad revenue number). Disney, deciding this wasn’t ridiculous enough, has promised another $350 million by 2009 if the site meets its growth targets.

The Wall Street Journal reports that the Club Penguin founders “decided to sell now because the company had got to a point where it needed a partner to grow.” That and they realized they hit the jackpot by coming across a drunkenly irrational mouse.

When Zuckerberg heard this, he instantly upped the required facebook bid in his head to $35 billion.

Disney Buys Kids' Social-Network Site [Wall Street Journal]

If Mark Zuckerberg wants to know what it’s like to be touched by Sergey Brin and Larry Page (A. Weird at first, then really kind of nice), he’s going to put it out there in no uncertain terms, Brin told DealBook Sun Valley correspondent David Carr yesterday in Sun Valley. “We don’t really look at companies for acquisitions unless they are really interested,” Brin said, not saying that he’s run into with “mixed signals” before but seeming to imply it. “If they come to us, we’d certainly be open to talking,” he added, meaning “You come 90, we’ll come 10.”

Facebook, who turned down a $1 billion offer from Yahoo last year is under the impression that Google et al will want it for its new “Platform” (and mind) at least $2 billion. FB’s recent “growth spurt,” open policy, etc, also has people talking about a big buy, although there are some around these part who think Facebook’s crossover from exclusive to inclusive* (plus its insistence on overloading the page with, what’s the word, crap) should be a signal to companies to stay away and let the thing IPO itself in 2009.

Sun Valley: Google and the Facebook Question [DealBook]
Google's Brin Says Won't Pursue Facebook [CNBC]
Exploding Bubbles: Facebook Widgets And Your Butt [Wired]

*while lacking the intrinsic trashiness that makes MySpace’s spread legs okay

Or: How Many Valuation Experts Does It Take to Change A Lightbulb at Facebook.com?

College student/alumni site Facebook.com has decided that after turning down a $750 million dollar buyout offer to hold out for two beeeeeeeeellion dollars, it will now up the ante and hold out for one beeeeeeeellion dolllars.

Facebook gets 5.5 billion pageviews a month and ads are sold in the form of "flyers" that cost $5/10,000 times displayed, which would seem to indicate that they have $2.5 million worth of inventory to sell per month. =((5,000,000,000/10,000)*5)*12 = $30,000,000/year of potential inventory to sell (at the quoted CPM, which is probably higher than the effective) Unless they have another revenue line we're missing, that's, uh, 67x at $2 billion.

(We checked our own alma mater and stumbled upon the "Patrick Bateman Is the Man" group. Not surprising.)

Web Networking Service Exploring Partnerships, Buyout [WSJ]