Atomic Online is mushrooming across the Internet.

The Baldwin Hills-based Internet company has bought an average of three Web sites per month since August. The goal is to build an e-publishing empire comparable to Conde Nast in print, with flagship titles that can also draw readers to related special interest sites.

The company stands out in the world of online publishing because it owns its sites and sells the advertising, in contrast with the industry model, which is for site publishers to farm out ad sales to networks.

Atomic divides its audience into men, women and teens. Each sector has a flagship site, which funnels readers into more specialized niche sites.

Atomic Online General Manager Mike Dodge says the strategy is working on two fronts: advertising and readership.

“Users are spending more time on mid-size niche sites,” Dodge said. “A male reader, for example, might be a gamer but he’s also interested in sports or movies. Rather than going back to Google, we can take him directly to those other sites.”

Atomic has sold ads to the largest names in consumer products, including Procter & Gamble Co., Fox, Kraft Foods Inc., Victoria’s Secret, Cingular, Kellogg’s Co., Coca-Cola Co., Paramount Pictures and Sony Corp.

With its buying binge, Atomic now controls more than 50 sites.

In the last three months, Atomic purchased several top women’s sites, including LovingYou.com, the most popular site for readers looking for information about marriage and long-term relationships, and Soaps.com, for soap opera fans. These, together with a clutch of cooking, entertainment and family-oriented sites, serve niches beneath the umbrella of the company’s main female destination, SheKnows.com.

The SheKnows.com group attracts 5.5 million unique visitors and 50 million page-views per month, according to the company.

The acquisitions also allow Atomic to share technologies and other resources among the sites.

Usually Atomic buys out a publisher completely and moves the operation to Los Angeles.

A typical Atomic acquisition costs between $500,000 and $5 million. In determining the price, Dodge looks for a loyal audience in a specific niche, and he only buys one of the three most popular sites within the niche.

Financing for the purchases has come from a consortium of private equity funds. The company doesn’t have a traditional chief executive; Dodge reports to the board of Pegasus LLC, a holding company owned by the funds.

Web publishers might be passionate about their subjects and their ventures, but they’re eager to sell their sites and surrender control to Atomic.

“Publishers have to weigh their choices for immediate liquidity versus longtime growth and further realization of their creative vision,” Dodge said. “At Atomic Online, we afford publishers the opportunity to realize liquidity in the near term within an organization committed to continuing their creative endeavor.”

After the purchase, the Web site publisher typically becomes an employee. The company runs its 50 sites with only 70 full-time employees, 40 of them in Los Angeles, plus 60 freelancers in various locations.

New advertising market

Atomic competes with large advertising networks, which are organizations that group together many similar sites and sell their collective ad space to big-brand marketers. However, by owning its sites, Atomic has a big advantage in the market.

“It gives you a lot more control and flexibility when we start planning a campaign,” said Samantha Lim, supervisor of media buying at Palisades Media Group in Santa Monica. “Also, since I buy for the studios, we’re always under a time crunch and a site owner can make decisions in a day or two, whereas with a network it can take two to three weeks to work out a plan.”

Dodge said a site owner like Atomic can better integrate the ads into the content, while networks usually accept only standard-sized ads.

“Advertisers want to stand out from the crowd, so that means custom executions,” said Rex Cook, executive creative director at AvatarLabs, a Hollywood agency that creates online ads. “If you interact directly with the site owner, you can get an exception to the rule for something special.”

Atomic also works well for contests or promotions that have unusual technical requirements yet need to run on multiple sites. Dodge said that advertisers like the ability of his sites to use graphic backgrounds, known as wallpapers or skins, that feature a logo or other image covering a screen.

One challenge for Atomic is that most of its revenue comes from brand advertising, which tout a company’s name, in contrast to direct response ads, which try to get the consumer to make an immediate purchase. Since the Internet’s earliest days, direct response ads have been the mainstay of the online economy. But Atomic hopes to change that.

“In the early days of the Internet, everything was focused on direct response,” said Dodge, who formerly worked at Internet Brands Inc. in El Segundo. “As users spend more entertainment time online, we’re seeing that shift dramatically to brand adverting.”

An example of direct response ads is the advertisements for mortgage lending that appear on Web search engines. Now, traditional brand advertising is becoming more common on the Internet. While mortgage lenders want readers to click on their link and refinance their home loans, brand advertisers don’t expect Web surfers to buy deodorant over the Internet. But advertisers want consumers to remember the brand names when they go to the store.

Magazine and TV the traditional media for brand ads usually sell yearlong schedules to advertisers. Cook said that Web sales are more flexible.

“It’s far more fluid than traditional print, for one reason because the rates change pretty rapidly,” he said. “Everyone’s trying to craft their own deal. There are no standard practices right now.”

But the Atomic model doesn’t work well for large campaigns. Lim said a conglomerate like Atomic might have five core sites targeting one demographic audience, while a large ad network might offer 250 sites.

Dodge believes advertisers are moving from the big search engines toward specific content sites.

“Midsize and smaller niche sites represent great values for advertisers today,” he said. “But just as prices over the past few years have risen on the bigger sites, prices will rise on the midsized sites as well. Revenues will be more spread out across the Web.”