Ben Huh with two of the new stuffed animals his company plans to sell

When I last caught up with Ben Huh of I Can Has Cheezburger fame, the Internet entrepreneur was overseeing an expanding empire of off-the-wall entertainment Web sites. That unusual collection of cat photos, misspelled signs and motorcycle wreck videos continues to grow and grow and grow. The network of Web sites (operating under the name Pet Holdings) is now attracting five million page views per day, with Huh predicting that the sites will top two billion page views this year.

Not bad for a guy who works out of a tiny, white-walled server closet in lower Queen Anne. But Huh -- whose company is profitable and growing -- is not slowing down. At a recent visit to the bare bones office, the former journalist offered a sneak peek at no fewer than half a dozen new projects and Web sites.

Those ranged from the development of new cat and walrus plush toys -- to be unveiled in the company's retail store this week for $19.97 -- to a yet-to-be-released Web site based on the Japanese comic strip style known as yonkoma. Oh yeah, Pet Holdings also quietly purchased a Web site out of Finland called Twittypic a few weeks ago that aggregates popular videos and images moving through Twitter. That service -- to be renamed Son of a Tweet -- is the first of the company's Web sites that doesn't have a pure comedy focus.

Huh, for one, thinks Son of a Tweet could be a huge success since it intelligently scans hundreds of thousands of videos and images almost in real time on Twitter. In a way, Huh said they can basically replicate Digg, just using Twitter as the source. Other services such as Retweet are operating in the arena, but Huh said Son of a Tweet's automated scanning technology behaves like a "giant brain editor."

"We think it is going to be big," he said. "Other people are trying to figure out who is popular (on Twitter). We don't care about who, we care about what people like."

When I showed up at the office, Huh was working on a yet-to-be-named Web site that will allow users to easily place funny captions on YouTube videos. Huh and his team have been working with Seattle's Overcast Media on the project for the past few months.

"This is as complicated as we've gotten in terms of creating content," said Huh. "Captioning a picture is pretty easy. Dragging balloons over a picture is a little harder. Captioning an entire video segment gets a lot more more difficult and complicated."

That's because video captions need comedic timing, inserted just at the right moment to get the maximum laugh. With the new tool, Huh said "we wanted to bring captioning videos to the masses." On the site, users could add dozens of different video captions to say a Barack Obama press conference or a music video. It is considering making money off the site by inserting short ads at the beginning of the videos.

While Huh is confident that the 11-person company will continue to grow its advertising revenue in 2009, he's also looking to diversify. Fail Blog and Graph Jam books are in the works, while Huh continues to look at other ways to syndicate content.. And the diversification strategy is one of the reasons for the new plush toys, including the Lolrus and the original Happy Cat from I Can Has Cheezburger. They also sell buttons, stamps, shirts and other products.

I asked Huh about the irony of an Internet company turning to stuffed animals and printed books for revenue. 

"It gives you a little bit of sense of how hard it is to make money online using advertising," he said. "And one of the difficulties is clearly the industry... When you are competing against millions of other sites trying to earn ad dollars, it does get difficult. We are going to make a big push in 09 to try to establish some great relationships with advertisers, and deliver reallly creative value."

Like what?

The company is experimenting with contests, flash games and other forms of advertising that engage the audience in much deeper ways. For example, it could partner with a movie studio or a video game company to run a contest where audience members add captions to screen shots.

"As long as you have an audience that is engaged and consistent and creative, you can literally come back to them and make it more fun where it is a value add to the user as well as the advertiser," he said. That strategy is working wonders for Huh, who said more advertisers reached out to the company so far this year than during the entire fourth quarter. And with the company generating cash, Huh said they are uniquely positioned to place "bigger bets."

There's possibly a another idea at work behind the success of I Can Has Cheezburger, Fail Blog, Enrgrish Funny and the other comedy sites.

Amid all of the bad economic news, Huh believes people just want something fun to read or view.  "When people are stressed out, they want that release," he said. "And we provide that release."

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