E.W. Scripps Co. has added to its stable of digital media properties, acquiring humor site Cracked from Demand Media for $ 39 million in cash.
Cracked, a satire site that launched in 1958 as a humor magazine, generated $ 11 million of revenue last year and was profitable, Scripps said. The company hopes to expand Cracked's video offering through over-the-top deals that could make the site's content available through devices such as Apple TV and Amazon Fire TV.
"In this era of fragmentation, you can't just be middle-of-the-road. You have to be something that consumers love, and people love their Cracked," said Adam Symson, chief digital officer at Scripps.
Cracked brought in about 8 million unique visitors in February, a 12% jump from the same period last year, making it one of measurement firm comScore's top 10 humor sites. Rivals FunnyorDie and the Onion generated 7.4 million and 12.3 million unique visitors in February, respectively, according to comScore.
The acquisition comes during increased interest in the humor space. Univision earlier this year took a minority stake in the Onion's parent company.
Scripps said half of Cracked's readership enters the site directly, signaling that the brand has a loyal audience at a time when many sites derive the lion's share of their traffic from outside platforms like Facebook. Cracked draws its revenue from banner ads as well as native advertising campaigns.
In 2007, Demand Media purchased the Santa Monica, Calif.-based Cracked, which currently has about 40 employees. Recent Cracked stories include "6 Famous Actors Who Were Tricked Into Being in Bad Movies" and "8 Unsolved Crimes That Were Clearly Committed By Satan," and videos such as "The Greatest Ninja Turtles Fan Theory You've Ever Heard" and "4 Reasons Pinocchio Is Secretly Terrifying."
"This transaction leaves Demand Media with a more focused portfolio of businesses, significantly strengthens our balance sheet, and positions us to drive profitable growth moving forward," Sean Moriarty, chief executive officer of Demand Media, said in a statement. Shares of Demand Media, which owns Ehow.com, have lost two-thirds of their value since the company went public in 2011.
Last year, Scripps completed a merger with Journal Communications, in which the two companies combined, spun off their newspaper holdings and merged their broadcast operations under Scripps.
Scripps purchased podcast advertising network Midroll Media last year for $ 50 million. In 2014, the company purchased Newsy, a digital video news company for $ 35 million, but then took a $ 24.6 million goodwill impairment charge on the business in the third quarter of last year. Scripps says it has expanded Newsy through over-the-top video deals with Apple TV and Dish's Sling TV.
"We're looking for things that resonate with younger audiences where the economics make sense," Mr. Symson said.
Write to Steven Perlberg at steven.perlberg@wsj.com
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