In February 2000, Onion editor and New York native Rob Siegel said: "We probably could have grown bigger, faster in a bigger city, but when you're removed from the craziness of New York or Los Angeles it's easier to make fun of it . . . We haven't been co-opted by the coasts." So how come they've upped sticks now? "The main reason was that we wanted to," says Siegel. "The germ of it was from the writers wanting a change of scene. I wanted to be near my family, Todd and Carol [two Onion writers] always wanted to live in New York.

Moving from Madison to New York can't be cheap - the rent increases alone must be astronomical. However, the Onion is in a sound financial position. Its co-owners, Scott Dikkers and Peter Haise, bought the newspaper 12 years ago for $16,400 from two University of Wisconsin students who had set it up in 1985. The company now has over 50 full-time employees.

"We made a lot of money last year," says Siegel. "This year we're pouring a lot of money into the New York office. Internet sales are down, but we're still making money from the paper and the books [Our Dumb Century, The Onion's Finest News Reporting and, the latest, Dispatches From The Tenth Circle]. Though Internet revenue is down it's still a significant chunk of our revenue."

And the Onion, as one of the very few self-sufficient dotcoms, still has a lot of ads. Many of these are the pop-up variety, one of which managed to shut down my Explorer recently. "Pop-up ads are annoying," Siegel apologises, "but just click them off. We need them to survive. The alternative is that the Onion won't pop up. You'll type in onion.com and nothing will come up. We don't like it, but it could be a lot worse. You should see some of the things advertisers wanted us to use. Ad mascots dancing across the screen or whatever. We could make a lot more money on this but we refuse some ads".

Whatever people's opinion of the move to NYC, the editor insists it has worked well so far. "As soon as we moved here we got a deal with Miramax, which wouldn't have happened in Madison," he says.

The deal is what is known as a "first look agreement" to develop scripts and features based on stories carried by the Onion. Projects will be jointly produced by the Onion and 3 Arts Entertainment.

"As lifelong New Yorkers, we're proud to welcome the Onion to our city with this first-look deal," said Harvey Weinstein, Miramax's co-founder.

"With their witty, sophisticated humour, they will undoubtedly soon be the toast of the town." Siegel was more to the point: "The goal for this Miramax deal is to create movies that don't suck," he said.

This is not their first foray into the film world. Last year, DreamWorks optioned two articles: 10th Circle Added to Rapidly Growing Hell (which is to be developed as an animated feature by Onion head-writer Todd Hanson) and Canadian Girlfriend Unsubstantiated (to be scripted by former Onion writer and editor Rich Dahm and produced by 3 Arts in tandem with Ivan Reitman and Montecito Picture Company).

Their latest figures show that 929,510 people read the Onion online every week. Ireland is its eighth biggest market outside America with 0.12 per cent of the total readership (there are 1,087 weekly readers in the Republic).

However, most of the writers still consider it a paper rather than a website. "One of the nice things about moving to New York is that more people will read it in its pure form," says Siegel. "There are things you can do with a paper that you can't do with a computer screen. Take it to the bathroom for instance.

"I like to see a paper as part of the fabric of the city. People reading it in restaurants or seeing it crumpled up in a gutter." The New York edition of the paper is due out this week, at which point Siegel will go on Conan O'Brien's TV show to promote it for a second time, having been on previously when they first moved to the city. On that occasion, Siegel sold his car by giving out his e-mail on the programme.

Was he nervous that first time on O'Brien's show? "I wasn't in 'be funny' mode, I was in 'don't screw up' mode. Next time I'll try to be funny," he says.

Overall, Siegel does not see being in New York as a huge change. "For the most part, it's the same as it was in Madison. Any involvement we have in New York circles is by choice. We haven't been swept up by anyone. No clubbing, no models. We haven't given reporters anything juicy.

"Maybe when the paper hits the streets, things that people predict will happen, and that I've laughed at, might happen," he says.

But he says it in a way that suggests any notion people might have of a sell-out is just plain wrong. And the truth is that as long as it continues to be the funniest thing on the Web, no-one is going to mind where the Onion is written.