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Disney Interactive Promises 25% Cost Cuts, Profitability By 2013

Disney Interactive Promises 25% Cost Cuts, Profitability By 2013

February 17, 2011 | By Kyle Orland

February 17, 2011 | By Kyle Orland
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The relatively new management team at Disney Interactive, which includes the company's video game business as well as some other Internet assets, has promised to turn a profit for the struggling division by 2013, using a planned 25 percent cut in operating costs to help get growth going.

Despite growth at Disney as a whole, the interactive media group has seen continued losses since before the $763 million purchase of social game maker Playdom last July.

But in a rare public appearance at an Anaheim investors meeting, division co-presidents John Pleasants and James Pitaro pledged their group would soon start growing and creating new franchises for the company, as reported by PaidContent.

"When John and I came together, we knew it was important to set clear and bold business goals backed by a common mission that unified our businesses," Pitaro said.

The process won't be pain-free however, with the co-presidents announcing a planned 25 percent cut in operating costs "to scale the business in a true march to profitability." The division has already recently seen significant layoffs as well as the shutdown of its Propaganda Games studio.

Disney CEO Bob Iger gave his support to the pair, emphasizing the role of technology in Disney's overall business plan.

"We view technology as more an opportunity than a threat," Iger said. "We believe it's only going to become a threat if we fail to adopt it or try to will it away."


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