Disney has entered the social networking field by buying Club Penguin for $350m (£172m).

The site features animated penguin avatars living in a snow-covered virtual world and users take part in group activities to earn currency and furnish their homes.

According to figures released by Disney, Club Penguin boasts more than 12 million activated users, primarily in the US and Canada.

It also has more than 700,000 subscribers, paying $5.95 a month or $57.95 a year.

"Club Penguin embodies principles that are of the utmost importance to Disney, providing high-quality family entertainment and fostering parental trust," said Bob Iger, Disney president and CEO.

The new service will be renamed Disney’s Club Penguin, but will retain its Clubpenguin.com domain name.

The company's three founders, Lane Merrifield, Dave Krysko and Lance Priebe, will join Disney's management team, although the operation will remain based in Kelowna, Canada.

Merryfield – a former employee of Disneyland – said Club Penguin had been looking to work with an organisation that shared its values and concerns for children.

“When Walt first envisioned Disneyland, he wanted to create a safe place that he and his daughters could enjoy," he said.

"In the process of creating Club Penguin, we shared that passion and often pulled from Walt’s vision in the hope of creating a unique place online that we would be comfortable letting our own children visit.”

Club Penguin launched in October 2005 and is one of the fastest growing online destinations for kids ages six to 14.