LOLing All the Way to the Bank

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For most people, LOL is an acronym for "laughing out loud"--a means of conveying mirth on the Internet and a bitter rival to "Ha," "Haha," and the happier of emoticons. For the Cheezburger network, LOL is a business model. And it just helped the blog network raise $30 million in venture capital funding.

Each month, millions of Internet denizens flood Cheezburger's sites--which include LOLcat-dominated I Can Has Cheezburger? and the FAIL Blog--to giggle at photos of cuddly animals with funny and artfully misspelled captions (a severe-looking cat beside a busted car explains, "It mocked me") and to consume photos and videos of people failing at life (a casino billboard below a McDonalds sign advertises "$2 Craps"). The network, run by former journalist Ben Huh, has grown rapidly since its founding in 2007 on only $2 million in funding from angel investors. It now includes 50 sites and has 16.5 million users who upload more than 500,000 pictures and videos each month.

What, you might ask, will a network with sites like I Has A Hotdog and My Food Looks Funny do with the $30 million it has recently raised? Huh will invest primarily in hiring, international expansion, and technology, including smartphone apps and better tools for uploading photos and captions. 

  • Huh Is A Savvy Business Man, states Leena Rao at TechCrunch: "The company has been profitable since its inception with revenue from three sources--advertising, traditional media publishing including books, and merchandising. And Huh, who famously offered to buy Reddit from Conde Nast last year, built this humor empire in only three years."
  • And the Economics Are Attractive, adds Pascal-Emmanuel Gobry at Business Insider:

The vast majority of the content is user generated and curated, with people using the site's tools to create their own lolcats and other memes, and the site can highlight those that are most popular. And these are the kinds of things that go insanely viral, so distribution is largely free as well. A business whose product is free to build and advertise sounds like a pretty good business. And the Cheezburger Network is a pageview monster ...

The only question mark is whether the Cheezburger Network can stay nimble and create sites that ride the wave of new memes just as they're starting, but clearly they've done this pretty well since 2007, opening, adjusting and closing dozens of sites. And this is all stuff they can measure.

  • Cheezburger Now Wields Considerable Influence, asserts Faith Merino at Vator News: "Cheezburger has become what many consider to be the locus of Web culture and humor."
  • A Public Cheezburger? wonders Brenna Ehrlich at Mashable: "Considering that a website that once centered around pictures of cats is now swimming in VC cash, the idea of an IPO doesn't seem that far-fetched." Huh, for his part, has dismissed speculation about an IPO.

This article is from the archive of our partner The Wire.