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Area Man Skeptical of All These Digital Roll-Ups

For a site that’s designed to be a sendup of the news business, The Onion bears amazing resemblance to the very subject it mocks.

Born 27 years ago as a print publication at the University of Wisconsin, The Onion has transitioned to a digital business (theonion.com), dropped the paper, expanded into online video (Onion Studios), dabbled in movies and television (short-lived cable shows on IFC and Comedy Central), built an genuine pop-culture criticism site (The AV Club) and launched an in-house agency that creates native ads for brands (Onion Labs).

CEO Mike McAvoy, who ascended to the role from chief operating officer last week, explains, all that means they’re doing it right. “When you’re parodying something you parody the business model. That’s the beauty of it.”

The business, which Mr. McAvoy says is profitable, is a frequent acquisition target. For over a decade, The Onion has been majority owned by investor David K. Schafer, who serves as the company’s chairman. Most recently, it was part of an attempted roll-up by Viacom, which would have also included humor sites Funny or Die and CollegeHumor. 

That deal ultimately fell apart both because the various sites’ owners were unable to agree on price as well as cultural challenges of combining so many properties, according to two people familiar with the scuttled deal.

Meanwhile The Onion continues to expand its scope of parody. Its newest vertical, ClickHole, spoofs the smarmy articles and videos of viral-lusting clickbait that have dominated Facebook and Twitter feeds. The Information recently spoke to Mr. McAvoy about ClickHole’s growth, why the site has pulled back on the pricey Onion News Network videos and what it’s like when real people still take fake Onion articles seriously.

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It’s not our goal to do that, but everything in The Onion is anti-dumb; that’s the position of the staff. Our motto is “Tu Stultus Es” which means “You Are Dumb,” when someone can actually end up being an unreasonable person and believe it to be true, it’s amazing. And in a weird way, inspiring.

Rob Guth commented on this article.
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Ultimately, producing high quality videos just to make money on pre-roll is a fun business but not a good business.