Viacom Wants to Peel Onion: Report

Viacom (VIA Quote) is in talks to buy the satirical news Web site The Onion, according to news reports.

The media conglomerate has been interested in buying The Onion and merging it with its Comedy Central cable channel since News Corp. (NWS Quote) beat Viacom out in the race to buy MySpace last year, according to Variety.com. The Huffington Post cautions that the acquisition is "not a done deal yet."

Neither site cited any sources for their reports, and officials from Viacom and The Onion couldn't immediately be reached for comment. The reports highlight large media and Internet companies' rising interest in buying niche Web sites.

Last year, Viacom agreed to buy Neopets, a site that lets people create virtual pets, for $160 million. General Electric's (GE Quote) NBC Universal acquired iVillage, which produces content aimed at women, for $600 million earlier this year.

"It will conceptually fit in well with its Comedy Central portfolio brand," writes Rafat Ali of PaidContent.org. "The pioneering site/newspaper has been suffering from low visibility of late," he adds, as other sites have come to the fore.

Small Web sites are increasingly being gobbled up by large media behemoths eager to cash in on the growing demand for Internet advertising. Wall Street analysts say the boon in Web ads is helping Yahoo!(YHOO Quote), which is due to post second-quarter earnings after the close of trading Tuesday, and Google (GOOG Quote), whose results are due Thursday.

Advertisers also are interested in reaching well-heeled audiences that are difficult to find otherwise. Target (TGT Quote), News Corp's 20th Century Fox and Volkswagen are among the companies with either ads or sponsorships on the site.

"More than 3 million people read The Onion's unique brand of news coverage each week -- online and in print in select cities -- making it by far the most popular news organization in its class," The Onion says in its online media kit. "Nearly a million more hear it on the radio coast to coast via the Onion Radio News service."