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Playdom Investor Discusses Why Disney Took the Plunge

29 July 2010 2 Comments

In a very interesting interview, the Wall Street Journal’s Venture Capital Dispatch blog hears from Jeremy Liew, a partner with one Playdom‘s venture capital investors, about why he thinks Disney bought the social gaming company and where they’re headed.

According to the Liew, it made sense for Disney to go after Playdom, a smaller- and lower-priced social gaming company than industry leader Zynga. Valued in the billions, Zynga has become almost too expensive for acquisition, while secondary characters Playdom (acquired by Disney) and Playfish (acquired by Electronic Arts) both sold for well under $1 billion.

Liew also discussed how his venture capital firm made out in the deal.

Q. This was an extremely quick venture exit, even within consumer Internet. How did your firm make out in the deal?
A. Disney made an offer and made a really compelling offer and it was hard to refuse. It wasn’t like we sat around and said we’re going to sell the company. It was opportunistic. Disney wanted it a lot and made it clear it was a strategic thing for them. [For us], we made money and made money fast.

Liew notes that his motivation to get involved with the company in the first place included a strong focus on revenue and business model and the addition of John Pleasants (former chief operating officer at Electronic Arts Inc.) as CEO: “…he really took the business to a whole new step upwards.”

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2 Comments »

  • Randall said:

    Disney is very anti-drug and the Playdom “Mobsters” app with “Meth Lab Chemist”, “Drug Lords”, “4:20″ and the like, I have to wonder if it is going to be around much longer?

  • Zane Figg (author) said:

    Randall,

    I’d be skeptical that the contributions to Disney’s bottom-line from those titles is going to be enough to convince them to keep the un-Disney-like apps on the market.

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