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IAC puts CollegeHumor up for sale amid video deal boom

Dec 05, 2014

Erin Griffith is a senior writer. She joined Fortune in 2014.

CollegeHumor, an entertainment website owned by IAC (iaci), is talking to potential acquirers about sale of the business, according to sources familiar with the situation. IAC, which acquired a majority stake in CollegeHumor eight years ago for a reported $20 million, is hoping to find a buyer that will pay around $100 million.

CollegeHumor would be the third humor site seeking a buyer. Bloomberg previously reported that Funny or Die had hired Moelis & Co. for a sale that could generate between $100 million and $300 million. Bloomberg also reported that The Onion is on the block, with a source telling Fortune that the asking price there is around $100 million.

What’s driving this deal activity? In short, Walt Disney Co. (dis).

This past April, Disney acquired a network of YouTube channels called Maker Studios for almost $1 billion, valuing it at a rich multiple of four times its revenue run rate. “All the other incumbent traditional media companies stood up to take notice,” one banker says. “They’re all trying to figure out why Disney did that and what copycat transactions are credible alternatives.”

Disney's deal for Maker Studios sparked flurry of online video acquisitions: Maker rival Fullscreen Media sold itself to Otter Media, Peter Chernin’s joint venture with AT&T (t), for between $200 million and $300 million. Another YouTube network called BigFrame was acquired by subsidiary of Dreamworks Animation (dwa). Stylehaul, a fashion and beauty video network, sold to a European television company for $151 million. Up-and-comers, like Tastemade, which LA techies are calling “the next Food Network,” and MiTu, Latino lifestyle network, recently raised eight-figure rounds of venture funding at healthy valuations.

Digital video is having a moment, and as venture investors love to say, “The time to eat the hors d’oevres is when they’re being passed.”

Now the humor sites are hoping to take advantage of the acquisition interest. CollegeHumor, which operates Dorkly.com and WatchLoud.com, has more than eight million YouTube subscribers and calls itself the #1 YouTube comedy channel.

An IAC representative declined to comment.

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