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Last Updated: Tuesday, 15 March, 2005, 00:00 GMT
How Mickey Mouse made Disney a giant
By Alex Ritson
BBC World Service business reporter

Mickey Mouse
Disney says Mickey Mouse is still a great asset

Walt Disney has often been held up as an example of the American dream in action.

A high school dropout, he founded the Disney company in 1923 along with his brother.

After a shaky start, he starred five years later as the voice of Mickey Mouse in Steamboat Willie, the world's first cartoon ever made with sound as well as pictures.

Success in the field of animation led his company on to businesses as diverse as theme parks, shops, computer games and TV networks.

However, some of the firm's most closely followed dramas of recent years have played out in its own boardroom and at meetings of shareholders.

Animated row

This week has been no exception. Disney ditched its tough, charismatic chief executive Michael Eisner on Monday in the culmination of a two year battle with shareholders who see him as betraying Disney's heritage.

Mr Eisner had already promised to go in 2006, but the board has now said his second-in-command, Robert Iger, will take over in September this year.

Disney's board saw off plans to create the world's biggest media firm last year after a hostile takeover bid for Disney by US cable TV firm Comcast. But the discovery of Disney's vulnerability did not please shareholders.

Under Mr Eisner, Disney's stock market value soared to be worth - at its height - twenty times its value from when he took over two decades ago.

When I present my business card people see Mickey - he's the best known and universally loved character in the world
Andy Bird, president, Walt Disney International

But Walt Disney's nephew, Roy, resigned from the company's board in 2003, saying that the firm had lost its creative direction.

He was furious that Mr Eisner was laying off Disney's last full time cartoon animators.

"It is not cost effective to fire a lot of talented artists and make mediocre movies. The safe decision is always the most dangerous one," Mr Disney said at the time.

He even went as far as setting up his own website, SaveDisney.com, to fight the company's management.

Mickey asset

Disney's businesses generally concentrate on providing content and entertainment which is suitable for families, and in particular children.

Finding Nemo - Nemo (left) with Dory
Finding Nemo, made with Pixar, was also a success for Disney

A significant slice of the company's income - around $16bn (8.3bn) last year - comes from merchandising and other spin-offs.

But whichever part of the Disney business you look at, mice are never far away.

Andy Bird, the president of Walt Disney's international division, says Mickey Mouse is still one of the company's biggest assets.

"Everywhere I go I'm amazed at the reaction, when I present my business card people see Mickey - he's the best known and universally loved character in the world and that opens enormous numbers of doors," says Mr Bird.

American brand?

Disney last year enlisted the help of China's 70 million-strong Communist Youth League, in a bid to build awareness of the Disney brand ahead of the planned launch in September this year of the firm's $1.8bn Disney theme park in Hong Kong.

"We do a lot of character brand research into how Disney as a brand and the characters are perceived. The public all over the world don't see Disney as an American brand," says Mr Bird.

"People see we spend a lot of time adapting the brand to local taste but it's something they've grown up with so they feel more affinity to it and don't see it as something that has just been manufactured in America."

Some of Disney's biggest success stories of recent years have been films like Toy Story, Monsters Inc and Finding Nemo.

Rival worries

They were all been produced under a partnership with computer animation specialist Pixar.

That partnership ends this year following a row over how profits from future films should be divided up between Disney and Pixar.

Pixar is now free, if it wishes, to team up with one of Disney's rivals instead. But the characters they created together are owned by Disney, as far as future sequels are concerned.

Disney's share price is now close to where it stood at the peak of the market in the year 2000.

How it performs in future will depend on coming up with the family blockbusters of tomorrow, as much as its ability to exploit its enormous back catalogue.

Andy Bird, President of Walt Disney International
"We spend time adpting the brand to local taste."

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