IT'S HIP 2 B SQUARE SPONGEBOB SQUAREPANTS HAS ADULTS DROOLING OVER A CARTOON CHARACTER.

Byline: Greg Hernandez Staff Writer

A cartoon about an incurably optimistic sea sponge who lives in an underwater two-story pineapple seemed a perfect concept for, say, wide-eyed 5-year-olds. But it turns out that dad likes to catch the adventures of ``SpongeBob SquarePants'' a whole lot too.

The Nickelodeon cable channel cartoon has grown into such a broad-appeal hit that it is blossoming into one of the holiday season's merchandising and home-video powerhouses.

SpongeBob isn't just a television character anymore, he's an industry. In addition to the cartoon, drawn at Nickelodeon's Burbank studio, there's a series of DVDs, a clothing line for men, women and kids, video games, giant plush dolls, custom watches, a karaoke machine, a kiddie car seat, and a 13-inch SpongeBob television set.

``You are talking about a property worth hundreds of millions of dollars just in this year alone,'' Toy Wishes magazine publisher Jim Silver said. ``This is a bigger merchandising program than 'The Simpsons.'''

The talking sponge is even featured on a 60-inch inflatable pineapple pool and on the No. 1 selling line of boxer shorts for the Target chain.

``One of the interesting things about the apparel is that 50 percent of it was being sold in large-adult-males sizes so the property was being bought by 4-year-olds and 40-year-olds,'' Silver said. ``It was meant to get the kids, never meant to get the adults. It's just became cool to be wearing SpongeBob.''

The cartoon series, created by Stephen Hillenburg, features the nautical adventures of SpongeBob and his friends, like Patrick the starfish and Sandy Cheeks, a Texas squirrel wearing a spacesuit. They live beneath the tropical island of Bikini Atoll where SpongeBob makes a living as a fry cook at Crusty Crab and gets on the nerves of his grumpy neighbor, Squidward Tentacles.

``I think it's offbeat and adults appreciate its MTV-style humor,'' said Lake Balboa resident Jeff Hutchinson, who was DVD shopping Thursday at Best Buy in Canoga Park.

The 26-year-old writer, who likes to catch the show whenever he has the time, described it as ``goofy and wacky.''

``It successfully crosses over to everybody but it never gets too offensive or too adult,'' he said. ``It's kind of great all around.''

Paramount Home Video recently released the entire first season of ``SpongeBob SquarePants'' in a boxed set of DVDs that quickly sold out at Best Buy and is selling briskly at online retailers Amazon.com, Barnes & Noble's BN.com and WalMart.com.

``It's one of our most popular cartoon franchises,'' said WalMart.com spokeswoman Cynthia Lin. ``We expect sales to ramp up even more as we get closer to the holiday.''

The boxed set followed a successful series of single-disc ``SpongeBob SquarePants'' DVDs and includes more than 40 episodes and a host of special features. In addition, Paramount has just released a special Christmas show.

Considering the short turn-around time for the release of television programs on DVD, the three years it took for ``SpongeBob SquarePants'' episodes to hit store shelves was unusually long.

``With a main character who is a sponge, even if he's extraordinarily popular with everyone you know, you need to do your market research in advance. Fortunately, it clicked right away so here we are now talking boxed sets,'' said Martin Blythe, Paramount Home Video vice president of publicity.

Steve Youngblood, Nickelodeon's senior vice president of media products said ``SpongeBob SquarePants'' marks the first time a show originally for kids has been released as an entire season on DVD.

``It's a very, very unique phenomenon to start with kids and go up,'' Youngblood said. ``The adult appeal comes because there are multiple levels of humor. From a buzz perspective, it's a property that has clearly transcended demographics.''

As proof of that buzz, references to the program have popped up on television programs ranging from cable dramas ``Six Feet Under'' and ``Queer As Folk'' to the sitcom ``Everybody Loves Raymond.''

``It's now part of the culture,'' Youngblood said.

Last month, television commercials advertising the DVD boxed set began airing on such cable channels as Nick at Night, MTV and CMT timed for holiday gift giving. Paramount plans to release boxed sets of subsequent seasons in the future.

``All of the marketing has been toward adults, going after the college audience and going after 18- to 34-year-olds,'' Youngblood said.

Although ``SpongeBob'' has been a ratings sensation since it debuted, it wasn't until a merchandising promotional tie-in with Target in 2001 that the level of passion for the show became clear.

``When an audience is that passionate, they want to be able to express that,'' Youngblood said. ``The key thing to the number of categories is the multiple demographic: boys, girls, older and younger.

``We knew we had a great show, a great piece of entertainment. These things have a way of getting a life of their own.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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(1 -- 2 -- color) In addition to DVDs, ``SpongeBob SquarePants'' merchandise includes items from clothing to television sets.