Demand Media Inc. of Santa Monica has sold its humor website, Cracked.com, to E.W. Scripps Co. of Cincinnati for $39 million in cash.
The sale was motivated by Demand Media’s desire to narrow its portfolio of internet companies and add cash to its balance sheet, said Chief Executive Sean Moriarty.
“We made the decision in response to an inbound from E.W. Scripps,” he said, insisting that Demand Media had not shopped Cracked to potential buyers. “As we looked at it and recognized its forward opportunity, we also realized it would require time and capital to fuel its growth. At this time, Scripps was better positioned to fuel its growth.”
Demand’s remaining properties include fitness website Livestrong.com, do-it-yourself website eHow.com, lifestyle website LeafTV, online artwork store Saatchi Art, and online art print store Society6.
Content websites represented about $74 million of the Demand’s $126 million in revenue last year. However, revenue from those assets has fallen over the last several years, including a 46 percent drop from 2014 to 2015.
Since Moriarty took over Demand Media in 2014, the company has worked to turn itself around by focusing on its growing e-commerce properties. Demand’s e-commerce revenue last year was $52.2 million, an increase of 47 percent from 2014.
The sale of Cracked will further decrease Demand Media’s reliance on advertising-supported media, taking with it nearly 40 employees and annual revenue of nearly $11 million.
Moriarty said the firm has no plans to sell its other content properties.
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