CollegeHumor expands IAC's online advertising reachJune 16, 2010: 4:04 PM ET
This is one in a series of articles leading up to Fortune Brainstorm Tech, which takes place July 22-24 in Aspen, Colo. The articles will look back at the progress of companies that presented at Brainstorm in 2009 as well as look forward to those that will present this year.
By Shelley DuBois, reporter
The same force that compels you to watch YouTube clips when you should be working could drive the future of online advertising.
If so, IAC/InterActiveCorp CEO Barry Diller is sitting pretty. IAC is an Internet company that owns over 50 online brands. The company pulled in $385.9 million in revenue in the first quarter of 2010, up 16% from last year.
For years, Diller's been questioned about his purchases. In 2006, he bought a controlling stake in the company that owned College Humor, a site founded by a couple of college students in 1999. The site started as a forum for jokes and links that college kids, mostly guys, would send to their friends.
It's evolved. Now CollegeHumor publishes video advertisements, produced in house, that target the chunk of students who would openly admit that jokes about beer and genitals are like, freaking hilarious, dude. Before those punchlines came between ads. Now the ads are the content.
On June 8, CollegeHumor announced a partnership with PepsiCo's SoBe to crank out video ads for TV and the web. A couple days later, the company released its first video ad for Orbit gum that they did with DumbDumb, a new production company created by Jason Bateman and Will Arnett from the series Arrested Development. IAC production studio Electus is also in on the project.
At the 2009 Fortune Tech last year, Diller explained how CollegeHumor and sites like it were changing the model for video ads with such an open, creative and cheap production process. "I think they're going to take over the world eventually," he said, "groups like them are really the future."
These kinds of ads are crucial, he said because online advertising can't live on display ads alone. Display ads are the ones you see on the borders of web pages. Something else would need to take its place, Diller said.
CollegeHumor is only one small part of his web-wide reach. If you've virtually courted someone on Match.com, asked anything on Ask.com, or read up on your gossip via The Daily Beast, you've passed through Diller's virtual property. The big question now is whether the College Humor approach works its way through all of IAC. Could commercials as the new content be a model that works everywhere?