I Can Has Funding: Cheezburger Raises $30M | Hacker News Reader

I Can Has Funding: Cheezburger Raises $30M

techcrunch.com

44 pointsssclafani47 comments

How the hell can you all be bitching about how this is a bubble? Were any of you around for the dot com days? I was young, but I remember companies getting triple and quadruple digit P/E ratios, for the lucky ones that had earnings at all. Others went public and were worth hundreds of millions or billions before they had so much as a decent audience, let alone a revenue model. Now we're crying "bubble" because a profitable company with a huge (profitable) audience raised money to grow even more profitable? You think their subject is stupid, I get it. You probably don't watch cheap, cookie-cutter cartoons or read trashy romance novels, but there are huge markets for those, too.

If growing, profitable companies in large markets raising capital means a bubble, may it grow ever more bubbly.

I'd want to know the price/earnings and the valuation before I started crying bubble.

I am somewhat concerned about the long-term sustainability of the audience for these properties. Will people still be interested in lolcats ten years from now? Almost certainly not, but the question is whether the Cheezburger Network can continue to stay on the bleeding edge of whatever zany memes folks might happen to be interested in in the future.

> Will people still be interested in lolcats ten years from now? Almost certainly not

I disagree. The fundamental reason why lolcats are interesting is that people find cats cute. Cats are a superstimulus that hooks into the human instinct to look after our young. Since human psychology isn't going to change in the next 10 years, lolcats will still be popular.

s/lolcats/pet rocks/

Pet rocks, after all, are also cute. So, I guess, were Beanie Babies and Tamagotchis and... probably a bunch of earlier trends that I'm too young to remember.

What's interesting about lolcats, actually, is that the initial wave of popularity must have been way back in 2006 if I recall correctly. Those were the days when "Monorail Cat" and "Invisible Bicycle" had me chuckling at inappropriate moments for several days. But, like most people, I tired of them pretty quick. It's quite impressive that there's still a community dedicated to them.

Unlike those things, there have been grandmas buying decorative cat plates for decades. Lolcats are just the same thing with an element of comedy.

I disagree. I thought lolcats were funny for a week or 2. Then I moved on.

I absolutely do not find cats cute though. I'd happily kill the whole species off if I was allowed to.

> Will people still be interested in lolcats ten years from now?

It's a fair point. Another questionable investment: Those guys with the Apple II. Who is going to be interested in having an Apple II ten years hence? The guys peddling DOS are some scam artists, too.

If only smart people could shift their business from one success into another, leveraging their talent, assets and experience in the process...

(And before the pedants jump in: of course ICHC isn't anywhere close to the same level of impact.)

If we're going to argue from analogy: Man, that Vanilla Ice really has a hit on his hands with "Ice Ice Baby". I'm sure he'll continue to have an equal string of successes for many years to come. I definitely need to invest in him!

This is the point: making popular memes is unpredictable. I Can Haz Cheezburgr certainly has a pretty good system in place for detecting and capitalising on new memes as they come up , but what about the meta-meme upon which they're based... the idea that it's horrendously amusing to put a big 36-point Impact caption on a random picture? If people get tired of doing that, can they adapt?

I think the better analogy would be: "Man, EMI (née SBK) has really done well for themselves by signing Vanilla Ice. I'm sure they'll continue to sign good acts in the future."

Making popular music is unpredictable, but if you're good enough at marketing, you'll make a lot of money when a hit comes your way. I'd guess that's the Cheezburger business plan.

I honestly don't mind the curious reactions of people. I think it's helpful to know what we felt at the time of the posting and to see people's reaction changing as answers are revealed. If I can't laugh at us, who will?

- Ben Huh, Cheezburger, Inc. Founder and CEO

http://www.quora.com/What-were-the-VCs-thinking-in-investing...

A simple question remains: what are they going to do with 30 mil $? If the site is profitable already, and the business model won't change significantly then the only space for growth is yet another meme niche site ( which they have been doing in the past). Anyway I think their potential for growth is limited and the 30 mil valuation doesnt reflect the potential earnings - bubble or not.

If growing, profitable companies in large markets raising capital means a bubble, may it grow ever more bubbly.

Two things: 1. Some people will profit in a bubble. 2. That things aren't as stupid as 1999 doesn't mean this isn't one.

I did an internship at a place in 99...I never saw a product or a client..but I saw fancy offices and foosball tables. It set certain ..ahh...unrealistic expectations.

That must have sucked going into a downhill ride in both work and office expectations. I imagine within three years you were working in some crappy location jammed with developers.

I was lucky. I started work in a major recession after 12 months of searching. Every year was an improvement in both salary, conditions and offices. By the time the bubble came and went I'd seen it all anyway.

Still, good times. I remember having a golf putter beside my desk and engaging in golf competitions with senior management. And my coworkers writing cool multiplayer games instead of actually, you know, writing code that paid bills. Oh there was deadlines and projects and stuff like that.

Another one of my friends was having visa troubles, and had to produce evidence of employment. All he had was a couple of employement documents on a letterhead of a company that didn't exist anymore, and the domain name went to some crazy domain parking company. The INS people were skeptical to say the least when he tried to explain what they did.

Bubble? Don't know. I bet they attract very distinct (relative to most websites) and important segments. If I took at stab at it I'd say something like non-tech white employed females.

If they do have unique and/or focused segments, and enough of them, they can monetize it.

Yeah, for what it's worth I tend to check out a few of their properties most days. I stopped with the lolcats when the ironic crowd were overrun with the 'oh-it's-a-cute-kittie' crowd, but I still check out Fail Blog, Ugliest Tattoos, and Failbook. I think you're right that focused segments is the key to the growth and success so far.

http://failblog.org/ http://ugliesttattoos.com/ http://failbook.com/

Failblog is popular with some high school students.

Ya, I wasn't thinking Failblog was popular amongst the employed-female crowd. Different property, different segment. As long as you have and can identify a specific audience, you're in good shape. It'd be interesting to get a breakdown lolcat's audience...maybe i'm wrong and it's a broad group which doesn't differentiate itself from a lot of web properties (male geeks).

There are a lot of reasons to believe we're in another startup bubble, but at least Cheezburger is profitable.

Deleted comment

Why is this a bubble if they are already profitable?

Please please please do not pop before the end of 2011!

Just like facebook, twitter, zynga, and groupon... The fact that this news pisses off HN commenters leads me to believe that they will be fairly successful.

And what will they do with the money? hire more lolcats?

maybe some cheeseburgers

I love your country

Import In-n-Out shipments to Seattle daily?

maybe they are working on the secret animal version of the site

Saturday morning cartoon.

I don't usually complain about downvotes, but this time? They're going to have to expand horizontally to get past hot-or-not vitality, though I suppose they could just be planning growth based on discovering more cute-able animals.

Any ideas on how much revenue/profit they make?

Quite a bit. Ben Huh is worth many millions, and that's from merchandizing and advertising, not raising capital. It's a very profitable business, considering it's just 3 year old 4chan memes, and a bunch of newer ones that are nowhere near funny.

Any numbers or sources?

Only circumstantial and hearsay, but I do know Huh made a serious pitch to buy reddit last year. He owns some 40 sites [1], many of which are small, but quite a few of which are reasonably large and well-capitalized (failblog, ICHC, Very Demotivational, there I fixed it, etc).

http://en.wikipedia.org/wiki/Pet_Holdings_Inc.#Websites

Do cats get a share of that funding?

Hate to be another "Bubble" preacher, but if this isn't another step in that direction, I don't know what is.

Well, there's two ways to look at this. Are we buying Cheezburger Network because of its existing collection of fad-sites, or are we buying it because we think they have the capacity to keep coming up with new fad-meme-sites indefinitely?

I've never looked at this site before today. What's the point of it?

That, my friends, is why I wash my hands of this industry.

So much for "smart people doing what they love" eh?

Better get that government job and hunker down; once this pops, your mad skillz might never see use again.

For those lacking historical context; it took 20 years for anyone to be hired in industry to work in "artificial intelligence".

Having met several people who work at Cheezburger, I can verify that they are indeed very smart people doing what they love. The Cheezburger team works tirelessly to make sure that their users laugh, every day. That's their mission and they seem to be achieving it...

Smart people, maybe, but they sure as hell don't need to be working hard to keep ICHCB running.

As far as technologies that inspire go, there are very, VERY few around.

Just think, if it's so easy, there's a HUGE opportunity for you to swoop in, solo of course, and build a profitable (from inception) company with 375 million monthly pageviews and 100 million monthly video views. And since you can run it all by yourself, think of the money you'll save!

Ah, but you're not "inspired" by that kind of thing. Too bad, you could be rolling in cash.

EDIT: Yes, I'm being snarky. It pisses me off to see some random person on the Internet tear down the accomplishments of a team that has built something huge and profitable that their users love. From scratch. In three years. What experience do you have running a network of the size and scope of theirs that leads you to denigrate their work?

I would rather take the Stephen Wolfram path to "rolling in cash", thank you very much.

This dude has been marked down to hell, but I think he has a point. With the self-congratulation going on in a few other threads about how entrepreneurs are better than everyone else because they create (oh I'm sorry, "hack") amazing things which make the world a better place, it's worth noting that 90% of internet traffic is complete garbage.

Why is stuff that makes people laugh garbage?

Kongregate was acquired for this amount (~$30MM); it's also built around leisure and time wasting, but compare their content offerings. One has games developed by over 10k developers, indy and professionals, while the other offers jpegs, crowd-sourced from 4chan and reddit.

Neither is garbage, but $30 mil for an image-board? and that's not even an acquisition but investment.

meh.

Same with TV and other media. The point is that 90% is garbage for everyone -- but it's also a different 90% for everyone. So I don't think this argument matters. Witness that companies building something loved by more than 10% of people (Facebook, Apple, Google) also yield way higher valuations and returns.

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