Do you remember when MySpace was all the rage? Of course you do. Then came Facebook; then came Twitter. Something else will come along, too. Unfortunately, though, News Corp. (NWS) committed itself to MySpace by buying it back in 2005. What a mistake that was.

I'm sure everyone knows about the growth problems at the social-networking site. This recent article at Reuters discusses them. Morale at the company appears to be waning. Unique visitors aren't what they used to be. An ad agreement with Google (GOOG) is about to expire; any new transaction on that front may not be as valuable now that MySpace has been relegated to not-as-cool-as-it-used-to-be status.

Anyone who follows Disney (NYSE: DIS) knows that the media conglomerate is serious about videogames -- it should be, considering that consoles from Nintendo (OTC: NTDOY), Sony (NYSE: SNE), and Microsoft (NASDAQ: MSFT) are currently cooking in the industry's new cycle. The company has been increasing its investments in this area, and it will continue to do so; making games for Nintendo's DS hand-held system, as well as other platforms, has become a priority. But Disney is also serious about the synthesis of virtual worlds -- you know, the kind of online gaming platforms that can suck a person's life away due to their addictive, immersive scope.

Well, the powers that be at the Mouse have decided that a dedicated team of professionals is needed to ensure a proper presence in the virtual-world space. According to a press release, Disney has created Disney Online Studios for the express purpose of programming new online entertainment platforms. It seems that the company wants to leverage the promise of social networking -- hope you're not too sick of that buzz phrase -- by creating worlds that allow gamers to interact with each other via community tools in addition to playing around in he worlds themselves. Right now, Disney operates Toontown, and it plans on developing immersive online environments for the company's Fairies and Cars franchises. Pirates of the Caribbean has also been given the online treatment; and let's not forget the acquisition of the popular Club Penguin destination.

So-called "virtual worlds" have gotten lots of buzz lately. These are communities where people can hangout, build things, trade and so on.

Even companies like IBM (NYSE: IBM) use virtual worlds to do things like management training.

Well, this week, Disney (NYSE: DIS) shelled out $350 million for Club Penguin, which is a virtual world that's focused on kids between the ages of 6 to 14. Basically, a kid can do things like furnish their igloo home.

The business model involves a combination of premium subscriptions ($5.95 per month) as well as merchandising (gift cards, t-shirts).

I had a chance to interview Robert Botch, who is a veteran of the gaming world and operates TidePool Partners. He is also a director of a virtual world, FakeTown.

Walt Disney (NYSE: DIS) scampered into the earnings confessional just after the close to report third-quarter net income of $1.18 billion, a 4.7% increase from the previous year. Per-share earnings increased to 57 cents per share, or 58 cents excluding items. Analysts were expecting The Mouse House to bank just 55 cents per share, according to estimates compiled by Bloomberg.

Sales were 6.7% higher at $9.05 billion, also edging out the consensus view of $9.01 billion. Revenue from parks and resorts rose 7.4% to $2.9 billion, cable-network revenue rose 4.5% to $2.3 billion, and media networks revenue was 5.6% higher at $3.8 billion.

In other news, Disney announced plans to buy Club Penguin - an online site that enables children to create their own virtual polar-friendly friend - for $350 million in cash. If Club Penguin meets certain performance goals through 2009, an additional $350 million will be paid. The Wall Street Journal notes that this is Disney's first foray into the world of virtual and social networking.

In after-hours trading, DIS shares have slipped about 0.70% after a 2.5% close higher in regular activity.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.