Cheezburger - business catBy now, it’s pretty clear there’s a real business in the hocking of internet culture. And when it comes to the business of documenting—and merchandising—the latest memes bubbling up from the internet’s underbelly and straight into pop culture, I Can Has Cheezburger is at the top of the pile. The company runs dozens of sites like Fail Blog, The Daily What and LOLmart which chronicle even the briefest, most obscure internet phenomena.

So when a web series births a spin-off web series—and ultimately a sizable online catalog—dedicated to dissecting the evolution of the now thousands of memes, you can bet Cheezburger took notice. Now today, we have learned from sources familiar with the deal, that Cheezburger Networks has acquired Know Your Meme for a low seven-figure sum.

The spin-off web series of Andrew Baron’s long-running Rocketboom began with humble ambitions only to eventually explode past its flagship with millions of views on its weekly episodes and over 2 million monthly visitors to its growing meme database. The series’ hosts Elspeth Rountree, Kenyatta Cheese, Jamie ‘Dubs‘ Wilkinson took a plausi-scientific approach to tracing memes in a series that blossomed in popularity even landing a Streamy Award-winning guest appearance by Weird Al Yankovic.

The acquisition by Cheezburger comes on the heels of a recent infusion of $30 million in funding earlier this year from investors including the Foundry Group, Madrona Venture Group, Avalon Ventures and SoftBank Capital. Cheezburger founder Ben Huh said in a 2009 interview with Slate.com that he prefers to buy established sites rather than copy them, something he appears to have done here with the pickup of the web’s largest meme database.

Cheezburger already has MemeBase, which stands as one of its most successful sites generating 90 million page views on around 3.5 million monthly visitors, but to be fair it’s name is somewhat of a misnomer as it mainly serves as a TLD for dozens of Cheezburger’s niche offshoot sites like GraphJam and Go Cry Emo Kid. Even the vanilla memebase.com serves mainly as a user submission ground for images and videos of recent memes, lacking the depth to be considered any substantial authority on memes.

Cheezburger’s roll-up of the internet culture business, with notable acquisitions like Fail Blog in 2008 and a reported $2 million for the original I Can Has Cheezburger site back in 2007, does invite the question of at what point does the line between reporting on memes and starting them start to disappear?

The breakout of Rebecca Black and her piercingly overly-tuned “Friday” video, after all, can be traced back to a March 11 post on The Daily What, subsequently spawning the 13 year-old’s unfortunate leap into mainstream popular culture. Naturally, with all of the requisite re-mixes, animated gifs, and countless references, Know Your Meme has cranked out over 500,000 views of its lengthy entry for Friday. For comparison, the snarkier (and somewhat NSFW) Encyclopedia Dramatica entry is also worth a read.

Neither Cheezburger or Rocketboom would comment on the deal, but information we received tells us that it has already closed and that three Know Your Meme employees have already transitioned over to working for Cheezburger. More evidence of the acquisition comes to light in the updated Terms of Service for the Know Your Meme site, which unless they happen to share the exact same attorneys and somehow relocated to Washington State (home of Cheezburger’s Seattle-based parent company PET Holdings Inc.), pretty much cement this one as a done deal. (See below)

Know Your Meme – Terms of Service:

Know Your Meme - TOS

I Can Has Cheezburger – Terms of Service:

Cheezburger TOS

As for the fate of the web series, it’s not clear what will happen. Longtime hosts Kenyatta Cheese and Ellie Roundtree recently announced their departure from Rocketboom and Know Your Meme after several years with the company. Rocketboom, which is still running, does not appear to included in the acquisiton.

UPDATE: Rocketboom’s Andrew Baron has posted on his Dembot blog confirming the news, though still not mentioning the specific deal terms other than calling it a “super seven figure deal.”

Today at Rocketboom we announce the sale of Know Your Meme to The Cheezburger Network. Cheezburger recently raised $30M and offered a super seven figure deal (Id like to tell you how much exactly but they wanted to keep that confidential). Before diving into the sale, I entertained another serious buy-out offer, entertained an offer for investment from a premiere investor, and even considered turning it into a double-bottom-line company, but all in all, everyone advised this was by far the best deal to be done (esp. because I was 100% owner of the company with no other investors or partners involved). When I took the idea to the Know Your Meme staff and got everyone’s complete conviction, I decided to hand it off.