Based on the buzz and advertising build up before this year’s NY Toy Fair, I’ve been predicting that the digital toy company Techno Source had a unique technology announcement to make. Just a few days before the show started, signs were pointing to a collaboration between Techno Source and Disney. Both were planning to deliver a big announcement on February 18 at Toy Fair. I made it to the press event and the news definitely raises the bar for the future of successful social networking sites and virtual worlds.

As the news outlets have been reporting since Disney’s acquisition of Club Penguin, Disney is very interested in growing its online virtual world properties. in the last seven months we’ve seen a number of virtual world announcements from Disney. Disney and Techno Source jointly announced their work together to create the latest in virtual world experiences called Pixie Hallow and a physical extension to that world called Clickables. While you can create your own custom fairies today, the Pixie Hallow site will launch later this year.

Pixie Hallow is a virtual world where girls ages 8 – 12 can create their own fairy avatar and explore, better yet “fly”, through the magical fairy world. The world will also include many games and communication tools to interact with other fairies through a number of safe filtered, monitored and canned communication methods. As you can imagine, PixieHallow is beautiful, lush, and visually captivating world. However, the biggest surprise in this world is how Disney developed the art in this world. In true Disney fashion, this virtual world was developed using a multiplane camera technique often used in Disney animated features. This visual technique is also sometimes referred to as a parallax process which is often used to animate and bring alive background art. What’s so unique about this? It’s a striking visual technique that gives the illusion of depth in the virtual word that I have yet to see anywhere else online. It’s a 2D enhancement that ads a level of realism to the product. Each plane of the background moves at its own unique speed. Items in the foreground more at a faster speed than items in the background. If you’ve ever worked in Flash you know that Flash tends to choke on large moving animations. Flash generally doesn’t play nice when it comes to pushing multiple layers of full screen motion either, let alone a single layer of full screen art. Whatever Disney discovered to pull off the effect, I applaud their engineering and animation teams for their success. Job well done!

So Pixie Hallow is the Disney side of this announcement. Techno Source brings a complimentary and compelling experience to the party in the form of a technology called Clickables. Clickables in its simplest form, are like tiny little digital buttons that can be attached to any item; jewelry, notebooks, clothing, whatever. Each button contains a tiny piece of data inside. An initial use for these buttons is to create charms for bracelets. A bracelet can have many different dangling charms but also has a main touch pad location on the bracelet where charm information from a friend can be transferred and captured. Once the tiny bits of information are captured, the bracelet can be “docked” and that information will be uploaded to your virtual fairly account. When this is done, information about your friend is added to your account. The uploaded information also unlocks different online trinkets and game experiences as well.

The beauty of Clickables is that this social experience is not purely a virtual one. Clickables technology, combined with the Pixie Hallow virtual world, encourages real world interaction and real world engagement. Once you’ve physically met someone, clicked bracelets upload that shared, real world event to your Pixie Hallow account. No longer do you have to worry about connecting with people online that you’ve never met.

I’m seeing many unique possibilities for Clickables beyond the Pixie Hallow experience. Similar uses of the technologies could make attending real world exciting long after the event is over. Be prepared to see more announcements related to this new way of connecting with people in the physical world and then sharing more meaningful relationships online.

Every year about this time in a beautiful and artistic section of Lambertville, New Jersey, I attend a unique technology conference called Dust or Magic. This inspiring and often eclectic event brings together experts from the fields of research, education, software, toys, and gaming with one common goal in mind- to share ideas and experiences towards the successful design of interactive products for children. This year’s keynote speaker that kicked off the three day event was Lane Merrifield who, until recently, was the CEO and Founder of the successful children’s social networking website Club Penguin. With the recent acquisition of Club Penguin by Disney, Lane moves into his new role as the EVP of the Walt Disney Internet Group, the interactive arm of Disney responsible for children’s online content.

After Lane delivered his presentation to a packed room, I had the opportunity to ask him about his experiences in creating and developing the Club Penguin service.

Scott Traylor: When you were a teen you lived in southern California and worked for Disney. What do you remember about working at Disney?

Lane Merrifield: What I remember most is being in the park and being with the entertainment in the park. It really was a premiere experience. I had great managers and I really felt privileged to have started in Disneyland. A lot of our customer service is modeled after the park. We are very liberal with customer requests. The same way if you spill your drink in a theme park and you go up to someone with your empty cup, whether you drank it or spilled it, the concession stand will give you a brand new cup and fill it back up. They’re going to give you the benefit of the doubt, and this kind of premium service left a strong impression on me. It’s good business to have that level of quality, and seeing it play out from behind the scenes as an employee of Disney; seeing that it was genuine, that it was more than just a show was a pretty fascinating experience.

ST: How did your experience of working at Disney shape how you built Club Penguin?

LM: Those experiences have shaped Club Penguin throughout, from the way we built our world to be an imaginary exclusive place, free from outside influence, to the level of customer service which was modeled exactly after Disney. In fact, a lot of Disney executives who come through our offices and hear our story comment on how much of our thinking is already in step with Disney. We’re told we already “get it” and we know what Disney is looking for.

ST: What other influences have helped shape Club Penguin?

LM: Really bad customer service from tech companies. It’s so frustrating navigating through a maze of phone calls and emails, and crossing your fingers that you’ll get a reply, even if it’s an automated one. It’s one area we keep very close tabs on. If a parent or a child writes to us, it’s our goal to get back to them the same day. Customer service is an area that has me knocking my head against the wall. How is it that so many good service companies have it figured out? I can go into a Starbucks and get great customer service. I can go into Disneyland and get great customer service. Why is it that the technology sector is so bad at this? I know that customer service is labor intensive and expensive. For us, if we can build a scalable model that includes good customer service, it’s worth it. Club Penguin was our own baby. It was our own thing. We had to make the customer service part of our business work. Disney has not even thought twice about whether we should shave cost in this area, not at all. They’ve said “You guys keep doing what you’re doing and keep it working.” Steve Wadsworth, the President of the Disney Internet Group, has been very good in noting how we’ve done this differently. I think Disney has done a good job compared to most other companies, and with its help we’re learning how we can do it even better.

ST: That;s quite a responsibility.

LM: It’s heavy for sure. It’s what keeps me up at night.

ST: What have you come to learn about children through Club Penguin?

LM: This is going to sound cliché, but among the lessons I’ve learned is that we tend to underestimate kids and their creative potential. There’s so much role playing involved in Club Penguin. There’s so much imagination at play. For the Halloween party in Club Penguin, for example, we developed a movie theater that played “Night of the Living Sled.” It was all about an electrical storm that lights up this sled that then goes chasing after penguins. It was just a 10-second Flash short because we were playing around with shorts at the time. Around the movie theater we purposely put in a concession stand, a popcorn machine; all sorts of stuff, totally unmanned, with no agenda. We just let the kids use it and role play with it. It’s no different than when I was a kid and had a toy cooking set or a toy tool set, and I would pretend to fix everything. That’s the kind of play we try and build into Club Penguin but you have to look beneath the surface to see it.

ST: What has surprised you about your audience?

LM: A lot. One big thing that has surprised me is how forgiving our audience is when there’s a brief period of down time or a technical glitch. The more honest we are with our users, the more forgiving and patient they are with us, and it’s been a great reciprocal relationship. We also don’t take advantage of that good will and think we have more time to fix the problem. Part of that reciprocal relationship is knowing our users trust us and that makes us try even harder.

ST: Do you see differences in how Club Penguin members from different parts of the world use Club Penguin?

LM: Yes. Obviously if there are language barriers, there are certain elements of the game that these users are not participating in. It’s something we’re trying to learn a lot about right now, especially as we’re looking to dive into some of these markets. Because we don’t ask our users what country they’re from it’s hard to get a fine degree of detail on non-English users. People are always asking us about our metrics, but because we have such a strict privacy policy, there’s a lot that we can’t track.

ST: Speaking of metrics, are there things about your web metrics which appear in the press that drive you crazy?

LM: To be honest we’re quite indifferent to it all. I don’t like it when reports are so off the mark, but because we’re not playing the same game that many other sites play for advertising reasons, we’re just as well to let them report whatever they want to report.

ST: Good point. Because Club Penguin is not ad driven, it doesn’t really impact your business in the same way as it would other online services.

LM: Exactly. I would just as soon not play the numbers game. We don’t need to play the numbers game. Even in our office, we don’t talk numbers. We don’t want the focus to be on bumping this number up or bringing this number down.

ST: If you were to do so, you’d be driving for the wrong measurement.

LM: Totally. It’s about how can we make the site more fun. How can we make it more safe. There’s an expression we often use around the office, “If it doesn’t matter to an eight year old, it doesn’t matter.” That helps us simplify a lot.

ST: Tell me about the Puffle.

LM: We wanted penguins to have a pet and we wanted kids to have something to take care of within the Club Penguin world. We wanted this pet to be an imaginary creature with unique characteristics and personalities. We also wanted it to be simple enough for a kid to draw.

When Puffles were first “discovered” in the Club Penguin world, they were an unknown thing. We had the Club Penguin scientists who captured a few to study them to see if they were safe. There was a whole storyline, about an eight or nine week arc, that ended in a need to name these creatures. So we pooled together the kids’ top five suggestions. We actually had about a thousand or so kids recommend the name “Puffle”, so they all got coins for choosing the winning name, and we had a big announcement. The original Puffle drawing came from our first employee we brought on as our lead animator, and he’s still our lead animator today.

ST: Did you notice a difference in Club Penguin after the introduction of the Puffle?

LM: Not really. The idea of a Puffle had always been in our design documents and we always planned on having it there, so there wasn’t really a marked change. To us it just opened up another method of play

ST: As an outsider and a developer of children’s technology, I look at the Puffle and it’s clear to me that it has a charm and uniqueness all its own, in addition to and separate from penguins. Because of this, I’ve wondered if the Puffle acts as a driver to extend the play experience in ways that might not appear without it.

LM: We haven’t measured that sort of thing. We do receive a lot of feedback from kids. Some kids say they love their Puffles but don’t want to keep feeding them anymore. So they decide to let them go and be free, and that’s okay. If a user decides they don’t want to feed their Puffle anymore, the Puffle never dies. It just runs away. It’s a decision that’s totally up to the child. It’s just another way of letting the user decide how they wish to play.

ST: If you had the opportunity to go back in time and change one thing about Club Penguin, what would it be?

LM: We would have built out more of the site;s infrastructure earlier on. I’m not sure we could have done this because it would have brought up our costs. We really had to watch our costs and pinch our pennies. We still do. We pride ourselves on being fairly good at that. Looking back, I think product development was slow because so many of our resources went into managing the volume of traffic we received. We just didn’t think we would receive that much traffic. We never thought our service would be this big, and not only did we believe this, we bet on it by not building out the infrastructure. When I think about it, I feel bad that our guys couldn’t focus on new features and new elements and new ways of playing. Our timetable for when we would get to these things was stretched out a lot longer than when we had planned. Even now we’re just finishing off the next iteration of our infrastructure. We’re actually building a brand new back end – a brand new engine – and it’s almost complete. We;re overbuilding it so we can just be done with it all and move forward and just dream about what we want to do next.

ST: When you were building Club Penguin, was there anything that you used to do that you don’t do now?

LM: Not much. My focus is so much on our core, our values, and our philosophy. That stuff hasn’t changed a whole lot.

ST: What do you think about claims in the press that Club Penguin was an overnight success?

LM: If it doesn’t matter to an eight year old, it doesn’t matter. I think the media is sometimes too focused on ego and on making celebrities. I understand all that. I get it. I just don’t spend much time thinking about it. We love to focus on the creative and focus on what we do and how people respond to what we make. As for the media, what it says is really its prerogative, and if some people say we’re an overnight success, well that’s okay. If others understand the longer effort that went into it, that’s okay too. I would rather focus my time on creating new ways of play and making the Club Penguin world deeper, richer, more fun and more safe rather than spending my time correcting stories in the press. Since day one our focus has been on service and our job is to serve the kids. For example, my job as a dad is to serve my kids in every way I can. Providing for them, nurturing them, loving them and taking care of them. That’s my role as a dad. It’s not about winning the Hero Dad of the Year award or anything like that. Club Penguin in a way is a similar opportunity to serve. And focusing on whether someone calls you a “One Hit Wonder” or an overnight success is just not worth the time. Hey, I hope someday we create something that will surpass Club Penguin, but if we don’t, that’s okay because I know Club Penguin served its purpose in my kids’ life and a lot of other kids lives. If that’s all I do, then I did what I set out to do and I can’t be disappointed in that.

ST: Lane, thank you for your time. I wish you and your colleagues back in Kelowna all the best and many future successes.

LM: Thanks Scott. I wish you and your team the best as well in making great things for kids.

For the history of Club Penguin visit the blog post “Just the Facts Ma’am – The History of Club Penguin”

For an overview of children’s social networking destinations, visit “A Survey of Kids’ Social Networking Sites”

As I was preparing my presentation for the Dust or Magic conference mentioned in my previous post, I couldn’t help but notice how much new activity there is in the kids’ social networking world. As the researcher Peter Grunwald shared with me last month, social networking as a concept has always been available on the Internet. Even so, it seems to have some newer meaning in the context of an activity kids express interest in. Last year at this time, I was only familiar with maybe four sites for kids. Fast forward a year, and I am amazed at how many more companies are playing in this space, some of which have been around for years but are only now gaining visibility. Not all of these sites are of equal quality and, right or wrong in their approach, each has a different set of assumptions about how to engage children. Below is a list of the social networking websites I am aware of today. It is not a complete list. My definition of social networking sites is a little broad, but there’s no denying the growth in this space.

By graphing these sites by the year in which they launched, one begins to see the growth trend of social networking websites for kids.



Since March of this year, my company, 360KID, has received a number of requests to build new social networking websites. More calls started coming in after the Club Penguin acquisition by Disney. Some people who call are driven by one thing- to create a Club Penguin-like website that’s better than Club Penguin. While Club Penguin has many great things going on within its service, there are certainly other avenues within the social networking world to explore. After comparing different sites currently available for kids, I see many unique opportunities to take advantage of, especially ones that touch on different areas of learning. Below is a matrix showing different content segments and age groups that are covered (or not) within the social networking world.

The blue shading indicates age groups that are less motivated by social features but are interested in community-based activities. Companies listed in italics offer activities that are much more community than socially driven.

While reviewing all of these sites and speaking with many different people interested in building social networking sites for kids, I have put together a short list of do’s and don’ts that put the interests of the child first and will ultimately create more successes with your intended audience:

• Don’t design by committee – Keep the integrity and the strength of your design strong by defining with small teams. Have anywhere from one to three strong visionaries of equal voice define the broad strokes of your product.
• Be open ended in your design – If you can avoid it, don’t force children to play in a specific way. Think how you can allow for multiple ways for children to interact and play within your environment.
• Think emotional connection – Offer activities or avatar characteristics that will create a sense of empathy with your user.
• Design for a very specific audience – Pick a specific age range, like 3 to 5 or 7 to 9. Then learn as much as you can about that audience, like its developmental strengths, play patterns, interests. Don’t design a product with the intent of appealing to a large age range, like 3 to 300. Designing for a broad audience tends to have the outcome of appealing to no single group.
• Competing against a community vs. competing against yourself – I’m asked a lot about my thoughts related to leader boards, which are areas of gaming sites in which the top score places high on a list of other members of a community. While I understand the motivation of leader boards for certain audience segments as a motivator, a game mechanic like a leader board, can also turn away other audience types. There are some instances where leader boards can be used effectively, like in classroom vs. classroom competitions, but generally, I am opposed to using such features, especially when a desired outcome is informal learning.
• Text – I am continually surprised as to how often a web product designed for very young children doesn’t take into consideration that their audience may consist of prereaders or emerging readers. Be thoughtful with your use of text and instructions. Consider visual, iconic, or audio instructions as opposed to text with younger audience members.

Is this race to develop social networking sites for kids a boom or a bubble? If you asked me a couple of months ago, I would have said a bust is on the horizon in this space. But the more I think about it, the more I’m seeing a new play pattern emerging which kids will really enjoy when developed correctly. That doesn’t mean that everyone will succeed. There will be many failures and few successes, but I believe the future successes will keep this sector of interactive products for children growing strong for many years to come.

These are a few thoughts I shared in my recent presentation at the Dust or Magic conference. To see the full presentation I delivered, you can view a video of my presentation below.

I’ve been looking for a resource that offers up the history of Club Penguin, the successful children’s social networking business recently acquired by Disney. I’ve also been interested in finding data which follows Club Penguin’s web growth since its launch. Having found only a snapshot in time posted here and a sprinkling of data displayed there, I decided pull together my own resource assembled from hundreds of web pages I’ve visited on the topic.

Company History

First, I’ll offer a chronological history of how Club Penguin came to be. Then I’ll present recorded web metrics of the Club Penguin site. Onto the history…

Another noteworthy item not often mentioned in articles about Club Penguin is the spirit of giving started by the founders which supports child-focused charitable work in developing countries:

“Lane Merrifield, Dave Krysko and Lance Priebe each stand to receive about $115 million for the two-year-old self-funded virtual world. 10 percent of CP’s net profits already go to charity, primarily through a foundation started by the three. Merrifield confirmed that 10 percent of the amount each makes from the sale will go to the foundationmore than $30 million from the cash payout. ‘It’s something we’ve done all along. We never wanted it to be seen as a marketing gimmick. … It’s part of our DNA.’ “

Club Penguin’s Web Metrics

Next, onto the web data. In almost all of the articles reviewed, either Nielsen//NetRatings or comScore Media Metrix is cited for their web metrics. Other sources include Hitwise, Compete, Alexa, but how these companies offer up their data tend to be less understandable to the general public or draw upon a sample base that is too small.

It’s definitely frustrating to compare Neilsen//Netratings and comScore web measurement data sets. Why isn’t one company’s numbers equal to another? One company may be better at capturing data from the online home user than the online work user. Another may be better at capturing all of North America instead of just the US market. In almost all the articles I’ve reviewed, it is unclear if these web metrics represent just the US or all of North America unless specifically stated, though I have a hunch that comScore does a better job at capturing all of North America in their data.

Below I compare monthly unique user data provided by Neilsen//NetRatings and comScore Media Metrix on the Club Penguin website over time. Each number below provides a link to the web page where I found the data:

The company Hitwise is sparsely referenced in articles about CP, but the company provides helpful data about how much market share a company captures online over time compared to other sites. Here are two charts: Club Penguin’s market share data represented alone through June 2007, and comparison data against Runescape, Webkinz, Neopets, Gaia, Stardoll, and Habbo through April 2007.

And finally, below is comparison data from Compete. Compete.com is rarely referenced in articles I’ve read. This chart is interesting to look at for trending analysis only. Compete is not often used as a critical analysis tool of websites because of how it gathers its information from a small sample size. Here I compare Club Penguin against Webkinz and Neopets.





Lessons Learned

So, what do I take away from this research effort? The two year “overnight success” as stated in the press makes for great headlines, but the reality is that a lot more effort went into the development and success of Club Penguin than is acknowledged. As the tallented vaudeville comedian Eddie Cantor famously said, “It takes twenty years to make an overnight success.” This quote seems very fitting here. I wish the folks at Club Penguin continued success. May the next segment of your adventure be as exciting as the first.

Just after I wrote an article called A Survey of Kids’ Social Networking Sites, a noteworthy report was released by the National School Boards Association (NSBA) and the research firm Grunwald Associates which takes a look at how students use and experience social networking sites. In the report called Creating & Connecting // Research and Guidelines on Online Social — and Educational — Networking some 1, 277 students ages nine to 17 were surveyed online about their online social networking habits. In addition to the student survey, 1, 039 parents and 250 school district leaders were also interviewed by telephone about their thoughts regarding students using social networking sites. This 12 page brief offers up some surprising statistics and contains just a very small fraction of the much larger in-depth report which can be purchased through Grunwald Associates.

Here I’ve separated out just the student responses found in this smaller report. This first set of statistics reveal how students are active participants and creative contributors in online social networking and community-based destinations:

• 96% of all students who have access to the Internet report that they have used social networking technologies (including chat, text messaging, blogging and visiting online communities)
• 81% say they have visited a social networking site within the past three months
• 71% say they use social networking sites at least weekly
• 41% say they post comments on message boards every week
• 21% say they post comments on message boards every day
• 12% upload music or podcasts of their own creation at least weekly
• 9% say they upload video of their own creation at least weekly
• 25% update their personal Web site or online profiles at least weekly
• 12% update their personal Web site or online profiles every day
• 30% report having there own blogs

This next set of data calls out how students encounter problems online with inappropriate content, cyberbullying, privacy and strangers:

• 20% of all students say they have seen inappropriate pictures on social networking sites
• 16% say they have seen inappropriate language on social networking sites
• 7% say they have experienced self-defined cyberbullying
• 7% say someone has asked them for information about their personal identity on a social networking site
• 4% say they have had conversations on social networking sites that made them feel uncomfortable
• 3% say they’ve given out their email addresses, instant messaging screen names, or other personal identification to strangers
• 3% say unwelcome strangers have tried repeatedly to communicate with them online
• 2% say a stranger they met online tried to meet them in person
• 0.08% of all students say they’ve actually met someone in person from an online encounter without their parent’s permission