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$DMD Demand Media, Inc. United States Patent - Systems and Methods to Facilitate Social Media Patent Publication number: US 2010/0088182 A
Scott Carter RYDER
Overview
Abstract
Application number: 12/245,613
Publication number: US 2010/0088182 A1
Filing date: Oct 3, 2008
Systems and methods to facilitate sharing of information and/or experiences among users within advertisements. For example, an advertisement can include a user interface to collect user content and to selectively present, within the advertisement, previously collected user content, while the...
Inventors: Scott Carter RYDER, Adam David WEINROTH, Duane Kimbell FIELDS
Assignees: DEMAND MEDIA, INC.
http://www.google.com/patents?id=wmbOAAAAEBAJ&printsec=abstract&zoom=4#v=onepage&q&f=false
[$$] DMD Demand Media: Search Spam or the Future of Content?: Tech News and ...
By David Card
Demand Media may have announced a successful IPO, but that didn't quite dispel the air of controversy surrounding the company. But while Demand's business model may be a little shaky, it's worth monitoring for lessons in content ...
GigaOMTech - http://gigaom.com/
http://gigaom.com/2011/01/31/demand-media-search-spam-or-the-future-of-content/
[$$] DMD Die, Demand Media, Die The Reformed Broker
Joshua M Brown - January 31st, 2011
"...that stupid “content farm” label, which we got tagged with. I don’t know who ever invented it, and who tagged us with it, but that’s not us…We keep getting tagged with 'content farm'. It’s just insulting to our writers. We don’t want our writers to feel like they’re part of a 'content farm'.”
- Demand CEO Richard Rosenblatt
By Joshua M Brown
Demand Media is to web content companies what Guy Fieri is to celebrity chefs - the very douchiest iteration that exemplifies every flaw of the medium and ultimately makes us detest the entire thing. Yes, If Demand were a TV chef, ...
The Reformed Broker - http://www.thereformedbroker.com/
http://www.thereformedbroker.com/2011/01/31/die-demand-media-die/
[$$] DMD Demand Media Announces Closing of IPO | WebProNews
By Chris Crum
Demand Media sold 5175000 shares of common stock, and the selling stockholders sold 5060000 shares of common stock in the offering. Demand Media received net proceeds of approximately $77.2 million from the sale of its shares, ...
WebProNews - Google - http://www.webpronews.com/taxonomy/term/21/0
Demand Media Announces Closing of IPO | WebProNews
http://www.webpronews.com/topnews/2011/01/31/demand-media-announces-closing-of-ipo
[$$] DMD Demand Media and the Everyday Web « Modeled Behavior
By Karl Smith
Tyler points to an article about Web Success demand media, which runs sites like eHow.com. Demand media has 13000 freelance writers on at its disposal who write short articles on what a computer algorithm tells you to write about. ...
Modeled Behavior - http://modeledbehavior.com/
http://modeledbehavior.com/2011/01/31/demand-media-and-the-everyday-web/
[$$] DMD Demand Media, a content mill | www.bullfax.com
By marketmaker
25, Demand Media sold 8.9 million shares at $17 each in an initial public offering. The following day, the price rose 35 percent to $22.61, which would give the company a market capitalization of $1.9 billion, greater than New York ...
Bullfax.com - Market News & Analysis - http://www.bullfax.com/
Demand Media and the Everyday Web
Monday ~ January 31st, 2011 in Economics | Tags: demand media, Web 2.0 | by Karl Smith
Tyler points to an article about Web Success demand media, which runs sites like eHow.com. Demand media has 13,000 freelance writers on at its disposal who write short articles on what a computer algorithm tells you to write about.
I actually noticed the rise of this model about five years ago. From the inception of the web, one of the skills I offered to amaze friends and in one case actually gain employment was finding information quickly on the web. In seconds I could extract useful information from Google or at the time, Yahoo.
The trick is that most people were tempted to “ask the web.” That is search for something like “what is electrophoresis.” In the days before Wikipedia lots of people felt like this should work, but it never did. They were pointed to tons of message boards with people talking about electrophoresis, but never really explaining it.
In this simple example, the trick would be to type something like “glossary electrophoresis” or even in full quotes “electrophoresis is similar” As I would tell people – don’t think like someone asking your question. Think like someone answering your question. What phrasing would the answerer use? Search for that – typically in full quotes.
Now here comes the fun part. The advantage of this skill collapsed in the last five years or so. My wife was able to find quickly answers by – shocker of shockers – asking the web. This was the very technique I had admonished her for doing years before. Yet, it was working like gangbusters.
Now I see, that I was brought down in part by Demand Media.
As I side note this is an example of the web spreading out beyond simply being the playground of infovores like myself, but into a realm that can help people caulk a window and other everyday skills.
Demand Media Gots Wiki Freaks, Problems @Wikipedia, the free encyclopedia
Demand Media, Inc.
Type Public (NYSE: DMD)
Industry Internet
Founded Santa Monica, California
(May 1, 2006)
Headquarters 1299 Ocean Avenue, Suite 500
Santa Monica, California, USA
Key people Richard Rosenblatt, Co-Founder, Chairman and Chief Executive Officer
Shawn Colo, Co-Founder and Head of M&A
Charles Hilliard, President and CFO
Revenue $200 million USD (2008) [1]
Employees 500 (2008) [2]
Website http://www.demandmedia.com
Demand Media, Inc. is an online media company that operates online brands such as eHow, and Cracked, and is known for creating online content based on a combination of measured consumer demand and predicted ROI. The company also provides social media platforms to existing large company websites and distributes content bundled with social media tools to outlets around the web.[3][4] The company also owns eNom, the world’s second-largest domain registrar.[5]
Demand Media was created in 2006 by a former private equity investor, Shawn Colo, and the former chairman of MySpace.com, Richard Rosenblatt.
The company employs an algorithm (CITATION SHOULD BE PROVIDED HERE AS THE CONCEPT OF ALGORITHM COULD BE SOME OLD GUY LOOKING UP SEARCH RESULTS) that identifies topics with high advertising potential, based on search engine query data and bids on advertising auctions. These topics are typically in the advice and how-to field. It then commissions freelancers to produce corresponding text or video content. The content is posted on a variety of sites, including YouTube (where Demand Media is the largest supplier of videos) (CITATION NEEDED - REFERRENCED FROM WHAT EXACTLY ???) and the company's own sites such as eHow, Trails.com, GolfLink.com, Mania.com, and Cracked.com.[6][7]
Demand Media was co-founded in May 2006 [8] by Richard Rosenblatt and Shawn Colo. Rosenblatt has a long history of building and selling Internet media companies. As CEO of Intermix Media and Chairman of MySpace.com, Rosenblatt was one of the innovators of Internet social networking.[9] Colo is a financial acquisition specialist. He worked for 10 years in the private equity industry as a Principal with Spectrum Equity Investors specializing in media and communications companies.[10]
Demand Media raised more than $355 million in financing over its first two years from investors such as Oak Investment Partners, Spectrum Equity Investors, Generation Partners and Goldman Sachs.[11][12]
In June 2007 Demand Media hired Charles Hilliard, a former Morgan Stanley investment banker and United Online senior executive, as its President and CFO[13] and acquired Byron Reese's how-to website, ExpertVillage.com of Austin, TX, for about $20 million. Reese became the company's Chief Innovation Officer and developed the algorithm that the company now uses to identify topics with high advertising potential.[6] By 2008, Demand Media had acquired more than 30 domain name portfolios and owned 65 destination websites. Demand Media said that its 2009 revenue was nearly $200 million and that it was making a profit,[1] but in fact the company had never been profitable.[14]
In July 2008 it was widely reported that Yahoo! was interested in buying Demand Media for between $1.5 and $2 billion.[15] Sources close to both companies said Yahoo! executives were attracted to Demand Media’s generation of advertising impressions and its ability to create niche social networks for media sites. Demand Media CEO Richard Rosenblatt later said that the company was not for sale.[16] The deal never got past the talking stage. It was reported that Rosenblatt wanted a price closer to $3 billion for Demand Media.[17]
[edit]Company
Demand Media employs about 500 people.[2] Its headquarters are located in Santa Monica, California. Demand Media also has offices in New York, London, Austin, and the Seattle area. Both of Demand Media’s co-founders are still with the company. Richard Rosenblatt is the Chairman and CEO while Charles Hilliard is the President and CFO and Shawn Colo is the Head of Mergers and Acquisitions.[4]
Acquisitions
Since 2006, Demand Media has acquired a collection of relatively unknown sites and relaunched them with social networking features and video capabilities that serve specific niche interests[18] In the company’s first six months it made nine acquisitions, including the purchase of major registrars eNom and BulkRegister.[19] On November 6, 2008, Demand Media Head of M & A Shawn Colo said the company would continue to buy niche, well-trafficked sites because the company is profitable and still has a lot of cash in the bank.[20]
In 2008 Demand Media acquired Pluck, a company providing social networking and commenting solutions to other websites, for a reported $75 million in cash.[21]
[edit]Business model
Demand Media executives say their websites are content-driven to attract visitors by showing up in multiword search-engine queries. The more words that are typed into a search engine, the more specific the search will be. This is called “the long tail”[22] search. Demand Media attempts to get visitors to its websites with these long-tail searches. It then tries to retain visitors with related content and social media tools. Their social media platforms get 3 billion interactions per month for clients with already well established brands.[23] Demand Media commissions specific website content that it then distributes to its own websites and others where they have advertising revenue sharing agreements.[24] As of 2008 Demand Media owned 135,000 videos and 340,000 articles. It is the largest contributor to YouTube, uploading between 10,000 and 20,000 new videos per month, and gets about 1.5 million page views per day on YouTube.[25]
Content is generated via a process in which Demand Media uses algorithms to generate titles, then posts the titles to a screened pool of free-lance writers or video creators. The list of available titles is always >100,000. Typically, writers can claim up to ten titles and then have a week to submit the articles. Format and length are dictated by guidelines. Submitted articles go to an editor (also a freelancer) who can either clean it up or request a rewrite. After writers submit a revised article it is either accepted or rejected. Payment via PayPal is twice a week.
Demand Media’s acquisition of Pluck.com in 2008 gave it the means to provide specialized content and social media platforms to any website.[15] The content comes with advertising attached. The website owners get free content for their sites and split the advertising revenue with Demand Media. This hybrid Internet publishing model has been referred to as Curated Social Content.[26] It is a combination of Enterprise Generated Media, such as newspapers, and consumer-generated media, such as blogs.
IPO
As of second quarter 2010, Financial Times reported that Demand Media is planning on an Initial Public Offering which would mean any acquisitions would be out of the question. IPO filing was completed in August 2010. Shares were initially expected to be offered in December 2010, in an offer that would give Demand Media a value of approximately $1.5 billion.[27] However, due to a Securities and Exchange Commission investigation regarding the company's novel accounting for "long-lived content," the IPO pricing was delayed until January, 2011. On January 12, 2011, the company announced it would price its IPO between $14 and $16 per share giving it a valuation of approximately $1.3 billion.[28] Some blogs have questioned Demand Media's claim to be profitable, given that its IPO filings show that has reported losses for the past few years; and also recent stories about government regulators are taking a close look at the company's accounting.[29][30][31][32][33]
Criticism
Demand Media has attracted criticism from Internet media watchers for being one of the largest buyers of articles and video,[22] purchasing thousands of search engine-driven articles and videos from low-paid freelancers to use on its websites to attract advertisers such as Google's AdSense.[34][35] On any day Demand Media has listed over 100,000 titles in search of writers. However, during the fall (THIS MAY COME AS A SHOCK TO IGNORANT AMERICANS BUT THE REST OF THE WORLD DOES NOT KNOW WHAT THE FALL MEANS - CITATION NEEDED PLEASE) of 2010 options to write articles for $25 or $30 dwindled, leaving mostly $15 or $20 titles. Recently, critics have also focused on the company's aggressive accounting practices and business models (see IPO section above).
See also
eHow
Examiner.com
Associated Content
Helium.com
HubPages
Squidoo.com
Mahalo.com
References
^ a b Joseph Menn, Los Angeles Times, Champion of the Obscure, Under Richard Rosenblatt, the company has amassed thousands of specialty sites and expects a healthy profit this year, July 16, 2008
^ a b Yahoo! Finance, Demand Media, Inc. Company Profile
^ Michael LoPresti, EContent Digital Content Strategies and Resources, December 1, 2008
^ a b Business Week, Software and Technology Services snapshot
^ eNom.com
^ a b Daniel Roth (October 19, 2009), "The Answer Factory: Demand Media and the Fast, Disposable, and Profitable as Hell Media Model", Wired
^ David Carr (February 7, 2010), "Plentiful Content, So Cheap", The New York Timesw
^ Matt Marshall, Silicon Beat, The Mercury News, Demand Media raises $120 million for a bunch of shell websites, May 2, 2006
^ John Heilemann, CNNMoney.com, Giving the Audience Its Own Domain, profile of Richard Rosenblatt
^ Shawn Colo, Co-Founder and Head of M&A, Demand Media profile
^ Adam Ostrow, Mashable, All That’s New on the Web, Demand Media Raises $100 Million, September 25, 2007
^ http://paidcontent.org/article/419-demand-media-raises-another-35-million-total-comes-to-355-million/ PaidContent.org
^ [1]
^ David Goldman (2010-08-12). "The nonexistent profits Demand Media lied about". CNN.
^ a b Michael Arrington, Tech Crunch, Yahoo Takes A Gander At Demand Media To Plug Some Holes, July 9, 2008
^ Kara Swisher, Boomtown, All Things Digital, Demand Media’s Richard Rosenblatt Speaks, July 9, 2008
^ CNET News, July 9, 2008
^ Kenneth Li, Reuters, Demand Media buys Pluck Corp, March 4, 2008
^ Ron Jackson, DN Journal, His Companies Have Sold for Over $1.3 Billion: Can Demand Media’s Richard Rosenblatt Do It Again with Domains?, April 2007
^ Bambi Francisco, Vator News, Demand Media, profitable and still buying, November 6, 2008
^ Erick Schonfeld, Tech Crunch, Demand Media Buys Pluck for $75 Million, March 4, 2008
^ a b Los Angeles Times, July 16, 2008
^ Bambi Francisco, Vator News, Demand Media profitable and still buying, November 6, 2008
^ Pete Cashmore, Mashable, All That’s New On the Web, Demand Media Launches Deals.com,December 1, 2006
^ Bambi Francisco, Vator News, Demand Media is largest provider to YouTube, Interview with Steven Kydd, EVP of Demand Studios, October 30, 2008
^ Jeremiah Owyang, WebStrategist.com, Demand Media’s Unique Publishing Model: Curated Social Content (CSC), November 10, 2008
^ http://www.ft.com/cms/s/2/104ddb4e-48ea-11df-8af4-00144feab49a.html
^ http://kara.allthingsd.com/20110112/demand-media-clears-sec-and-prices-ipo/
^ Austin, Scott (August 12, 2010). "Where Did Demand Media's Profits Go?". The Wall Street Journal.
^ Goldman, David (August 12, 2010). "The nonexistent profits Demand Media lied about". CNN.
^ Byrne Hobart (August 12, 2010). Demand Media’s IPO: Everything You Need to Know Byrne's Blog.
^ Blodget, Henry (December 23, 2010). "Come On, Demand Media, Just Drop The Bogus Accounting". businessinsider.
^ Yarow, Jay (December 23, 2010). "Demand Media IPO Delayed, Tripped Up By Questionable Accounting Practices". businessinsider.
^ http://www.ft.com/cms/s/2/bba9fefc-795d-11df-b063-00144feabdc0.html
^ Nicholas Spangler (November/December 2010). In Demand: A week inside the future of journalism Columbia Journalism Review.
[edit]External links
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Demand Media Gots Wiki Freaks, Problems @Wikipedia, the free encyclopedia Demand Media, Inc.
eNom and LegitScript LLC Announce Agreement to Identify Customers Operating Illegal Online Pharmacies
SANTA MONICA, Calif.--(BUSINESS WIRE)--eNom, Inc., the world’s largest ICANN accredited domain name wholesaler, and LegitScript LLC, an Internet pharmacy verification and monitoring service recognized by the National Association of Boards of Pharmacy, today announced an agreement by which LegitScript will assist eNom in identifying customers who are violating eNom’s terms of service by operating online pharmacies in violation of U.S. state or federal law.
“We believe our tools, data and investigative assistance can help eNom address this fast-growing issue of rogue internet pharmacies to better protect consumers.”
“As the largest domain name wholesaler, we take our role and responsibility very seriously. As such, it is our policy to cooperate with law enforcement agencies, and where we have evidence of illegal conduct from law enforcement or another trusted source, we take appropriate action, including terminating domain name registration services,” said Taryn Naidu, senior vice president and general manager at eNom. “Our partnership with LegitScript provides us with a trustworthy source of information regarding the illegal sale of pharmaceutical drugs.”
Under the agreement, LegitScript provides eNom a list of domain names that knowingly host illegal online pharmacies. LegitScript regularly coordinates with law enforcement authorities to confirm that its lists are accurate. With this information, eNom can better enforce its policy of taking appropriate action against customers engaged in illegal activity in violation of its terms of service, including terminating services.
“LegitScript was created to fill a void in the monitoring and verification of the online pharmacy market, and our service has helped the investigative efforts of government agencies in the US and abroad,” said John Horton, president of LegitScript and former associate deputy director at the Office of National Drug Control Policy. “We believe our tools, data and investigative assistance can help eNom address this fast-growing issue of rogue internet pharmacies to better protect consumers.”
As part of the agreement, LegitScript serves as a resource to eNom regarding issues concerning drug safety, pharmacy laws and regulations, and complaints with respect to action taken by eNom against customers based on information provided by LegitScript. eNom assists LegitScript with its research concerning illegal online pharmacies by providing expertise in the domain name registrar business.
About Demand Media
Demand Media, Inc. is a leading online media company that informs, entertains and connects millions of people every day. Through a portfolio of vertical web properties reaching more than 80 million monthly visitors, a global network of digital partners, and an innovative content studio, Demand Media publishes what the world wants to know and share. Founded in 2006, Demand Media is headquartered in Santa Monica, CA with offices in Bellevue, WA, Austin, TX, New York, NY and London, UK. For additional information about Demand Media, visit: www.demandmedia.com.
© 2010 Demand Media, Inc. All rights reserved.
Demand Media, eNom, are trademarks and/or registered trademarks of Demand Media, Inc. in the United States and/or other countries. All other trademarks are trademarks of their respective owners.
Contacts
For eNom
Quinn Daly
310-394-6429 direct
Quinn@demandmedia.com
very interesting....i saw some of the video's. Here's a guy Rosenblatt whom sold 2 companies for 500 mil....he's no dummy that's for sure, will be watching this one carefully.
Thanks Ice for creating this board.
DMD IPO'd couple days ago..."Demand Media soars 40%; prices at $1.5B"
The Web publishing company hits the NYSE Wednesday under the symbol DMD
Financial trends and news by Faith Merino
January 26, 2011 | Comments
Short URL: http://vator.tv/n/164f
But it was on sharespost before then, like these privately held gems.
http://www.sharespost.com/
FEATURED COMPANIES
Company Industry Description
Digg Social Community voted content
eHarmony Web Online dating site
eSolar Cleantech/Energy Utility-scale solar power
Facebook Social Social networking leader
LifeLock Consumer Identity theft prevention
Linden Lab Social Virtual world environment
LinkedIn Social Business social networking
Silver Spring Networks Cleantech/Energy Smart grid provider
SolarCity Cleantech/Energy Solar power provider
SugarCRM Enterprise Open source applications
Twitter Web Social networking provider
Zag Consumer Car buying solution
Zynga Social Social networking games
This stock just IPO'd today. Correct ?
$DMD $$ Demand's business depends on Google...
Image: AP
Here Are The 8 Products Google's New CEO Larry Page Should Kill ?
10 Interesting Things We Just Learned About Demand Media
11/11
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#demands-business-depends-on-google-11#ixzz1CMOnPsd5
$DMD $$ Want to make money on the internet? Demand's Reese has a tip for you: buy tons of old, public domain books and turn them into websites
For example, by working a few hours, you could take an old Creole cookbook and turn it into the best site for Creole recipes, and make money from Google ads for cooking-ware. One site might not make you tons of money.
But a thousand would.
10 Interesting Things We Just Learned About Demand Media
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#want-to-make-money-on-the-internet-demands-reese-has-a-tip-for-you-buy-tons-of-old-public-domain-books-and-turn-them-into-websites-10#ixzz1CMOY2tDf
$DMD $$ We already knew this, but it's worth noting that Demand makes half its money from domain name registration, not content, and still loses money
10 Interesting Things We Just Learned About Demand Media
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#we-already-knew-this-but-its-worth-noting-that-demand-makes-half-its-money-from-domain-name-registration-not-content-and-still-loses-money-9#ixzz1CMOMEgUb
$DMD $$ Article topics picked by machines make 5X more money than the article topics picked by humans
That was in an earlier story by Wired on the company, which we'd read, but we'd forgotten that tidbit, so thanks to BusinessWeek for including it.
10 Interesting Things We Just Learned About Demand Media
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#article-topics-picked-by-machines-make-5x-more-money-than-the-article-topics-picked-by-humans-8#ixzz1CMOCqNN1
$ DMD $$ Another early experiment was happynews.com, which aggregated positive news stories from around the web
10 Interesting Things We Just Learned About Demand Media
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#another-early-experiment-was-happynewscom-which-aggregated-positive-news-stories-from-around-the-web-7#ixzz1CMNunX6k
$DMD $$ The biggest moneymaker, though, was santamail.org, which sold parents personalized letters from Santa for their kids
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#the-biggest-moneymaker-though-was-santamailorg-which-sold-parents-personalized-letters-from-santa-for-their-kids-6#ixzz1CMNovbad
$DMD $$ After the dotcom bust, Reese's company PageWise, founded in 2000, survived by selling coins, watches, collectible items with customized family crests, and "customizable Italian charm bracelets"
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#after-the-dotcom-bust-reeses-company-pagewise-founded-in-2000-survived-by-selling-coins-watches-collectible-items-with-customized-family-crests-and-customizable-italian-charm-bracelets-5#ixzz1CMNevTr9
$DMD $$ Demand Media didn't actually invent the content farm idea, it got into it by buying Reese's company PageWise in 2007
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#demand-media-didnt-actually-invent-the-content-farm-idea-it-got-into-it-by-buying-reeses-company-pagewise-in-2007-4#ixzz1CMNMxNpg
$DMD $$ Byron Reese, Demand's Chief Innovation Officer and the inventor of the content farm model, seems like a kooky -- and awesome guy
Reese is an avid deer hunter, fan of Byzantine history, and recently visited North Korea. According to his official bio, he started his first company in college. The business? "Elaborate practical jokes."
Here's what people who worked with him said about him: "He's an idea generator, the guy just has a gazillion ideas"; "He comes up with off-the-wall ideas and then he executes them."
We'd love to buy him a beer.
$DMD $$ Demand's average revenue per user is just $1.60 That's versus $24 for Google and $124 for Amazon (and about $4 for Facebook).
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#demands-average-revenue-per-user-is-just-160-2#ixzz1CMN2EHwn
$DMD $$ Demand is BIG: it publishes 5,000 articles and videos PER DAY, from 13,000 freelancers
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1#demand-is-big-it-publishes-5000-articles-and-videos-per-day-from-13000-freelancers-1#ixzz1CMMu5qbI
$DMD $$ 10 Interesting Things We Just Learned About Demand Media
Read more: http://www.businessinsider.com/10-things-we-learned-about-demand-media-2011-1##ixzz1CMMje7kx
$DMD $$ The New York Times Almost Bought Demand Media Four Years Ago
Jay Yarow | Jan. 26, 2011, 1:17 PM | 543 |
inShare
Here's a fun nugget of news about Demand Media.
According to Rafat Ali, founder of paidContent, the New York Times was very close to buying Demand four years ago, but CEO Janet Robinson shot it down.
The irony of this news is that Demand just IPOed, and it's valued at over $1.5 billion, which means it's worth more than the New York Times. (Another irony: The New York Times tries to practice journalism that's exactly opposite what Demand Media does.)
If the New York Times had bought Demand, it doesn't mean the company would be worth $3 billion today.
In fact, if it had bought Demand, it might be worth less, as investors looked at the company as a drag on NYT resources. Or the NYT may have shut it down, mismanaged it, or any number of alternate outcomes.
We asked the NYT's PR guy about this story on Twitter. (Didn't think it was worth bothering him on the phone.) If he tweets back, we'll let you know.
$DMD $$ Demand Media IPO: Higher valuation than the NYTimes - here's why...
By Tom Foremski | January 27, 2011, 2:32pm PST
CNNMoney reported:
Shares of online content creator Demand Media closed 33% higher Wednesday, following an IPO that valued Demand at more than $1 billion.
…That gives Demand a valuation of $1.5 billion — more than the New York Times Co (NYT), though less than other media stalwarts like Gannett Co. and Washington Post Co.
That’s also the highest market capitalization for an Internet company since Google’s IPO in 2004, according to research firm Renaissance Capital.
While its valuation might seem surprisingly high compared with the New York Times, it’s investors clearly believe it has a brighter future than the Gray Lady. And here’s why it deserves it:
Unlike the New York Times, which is trying to adjust its business model to cope with the harsh economic realities of online media, Demand Media was designed from the ground up for precisely these economies.
It might shock the newspaper industry that an online article is only worth say $50 over its lifetime, but that’s the harsh reality. Demand uses its algorithms to figure out what people are searching for and how much it can earn in advertising dollars from each article over a five year period.
It’s very clinical and very sensible.
- The New York Times has to figure out how to squeeze its legacy costs into the tight corset of the online media economy. Demand Media doesn’t have that problem, it is a child of this media economy, it can grow with it, it can change with it — and still profit.
- Demand has a business model that works and one that’s finely tuned to online media markets — the New York Times does not. The New York Times is far behind, it is still trying to figure out its business model. It is experimenting with a paywall for the second time.
That’s why it’s not too outrageous to see Demand Media with a higher valuation than the New York Times.
Quality versus meh content
This is an interesting story because it is also seems to be a commentary on how the stock market values quality content over mediocre content. And it seems to prefer mediocre content producers … but that’s not a fair assessment.
The reality is that it is very difficult to monetize quality content on the Internet. The rewards for producing quality content aren’t that much greater than for mediocre content. NYTimes uses Google Adsense on its front page. Anyone can sign up for Google Adsense and host the same ads and reap the same rewards.
The problem is that there is no adequate reward system, on the Internet, for quality content - that’s why journalists are losing their jobs.
The discovery of a business model that rewards quality content over mediocre content, would make an important impact on society - it’s the Gordian Knot of our times. If someone solves it then we all solve it because we can apply that business model across all online media.
Will the Demand Media business model become the de facto new media business model?
It has to be more than that. The Mew Media Corp of the future will use a business model I call a Heinz 57 business model - multiple varieties of revenues; adverts, paywalls, lead generation, virtual goods, conferences, events, etc.
Multiple revenue streams in different forms for different publications. And it is this management of multiple revenue streams that will create successful new media companies.
Demand Media has the opportunity to add revenue streams and that means its profitability can improve without increasing its costs of production. Demand can take advantage of new revenue opportunities as they occur.
NYTimes can do the same but it also has the distraction of trying to manage a tricky downsizing.
Media deflation…
The challenges to Demand’s business model are the same as those of the New York Times: the value of content dropping over time. Demand calculates the value of an item of content five years ahead - but what if that forecast is wrong?
Every piece of media has to compete for the attention of a finite pool of readers/consumers. There’s a media tsunami happening and so there is greater competition, from an ever greater amount of media. T
This is a trend that amounts to a devaluation of all media content - mediocre or top-quality, they all face the same deflationary cyclone.
Also, will Demand exhaust most of the low-hanging fruit? How many “How to” articles can be written or videoed before you start moving into esoteric territory where the advertising gains are limited?
The algorithmic threat…
The threat from Google cutting out spam content is over blown and misunderstood. Demand’s content is basic but it’s not terrible, it is certainly far from being classified as spam.
Industry observers such as Danny Sullivan, from Search Engine Land, like to point to a recent Google post about changing the algorithm to get rid of spammy results, as a potential problem for Demand.
But Google isn’t referring to Demand Media. It would be very simple for Google to get rid of Demand’s content from the top of its indexes, Google is targeting outright spam.
Google changes its algorithm on a regular basis to shakeout those that are gaming the system too closely. Demand can easily tweak its SEO to accommodate any changes in the algorithm, without violating any of Google’s rules. And it can make those changes across a huge amount of content — that’s the beauty of scale.
It’s easy to see why Demand Media has a high valuation because it can adapt to the changing media landscape and importantly — it knows how to make profits in an industry where many are struggling to keep the lights on. The New York Times for example, had to sell its new office building and lease it back.
[Demand Media closed at $21.88 at rhe close of Thursday trading, down 3%.]
$DMD $$ Demand Media's eHow Faces User Backlash Over Facebook Log-in
eHow to Make Facebook Log-in Only Option
Friday, January 28, 2011
By Chris Crum
Demand Media is no stranger to controversy, and the subject of the company's content and the Google love it receives, has come back into the spotlight as the company launched an IPO this week, and Google is now saying it's going to alter its strategy on content farms. More on this here, here, and here.
Demand is also facing some amount of user backlash, as it is moving to a Facebook log-in-only approach on its eHow.com site (hat tip: ReadWriteWeb and Inside Facebook). eHow reportedly sent an email to users letting them know as much. On an FAQ page, an eHow community manager says:
We are committed to continuously improving your experience on our site. Facebook Login, formerly known as Facebook Connect, already exists as an option for members to login to eHow.com. The overall benefit of utilizing Facebook Login is that users can immediately connect with those they rely on and trust most: their Facebook friend network. Also, Facebook Login adds simplicity to eHow.com by helping users streamline their friend lists and eliminating the need for users to have to remember multiple logins. Facebook Login has revolutionized login across the Web, and we’re catching the wave.
Log in with Facebook for eHow
Here are a few of the comments from eHow users:
"I use Facebook rarely but don't want my ehow stuff and my facebook connected either."
"I think forcing the use of facebook is an invasion of privacy. My writing is not something that I share with my friends and family. I know it's kind of weird that I am private about that but I don't need everybody knowing what I choose to do in my spare time. I resent this transfer a great deal."
"Forcing the use of Facebook is not a good idea. I have a FB account but do not wish to use it for this purpose. In fact, I rarely use FB in the first place - too easy to waste time."
"I agree that Facebook should not be "forced" to be the ONLY way to get into eHow... why not make using your Facebook account - if you have one - an "OPTION"!?!? You know, something that resembles freedom of choice!"
I agree that this is a horrible move on eHow's part, unless they are owned by Facebook. I do have a Facebook, but I ONLY use it to connect with friends & family, people I KNOW. I don't play Mafia Wars, or FarmVille & I block those applications from my wall. I don't follow companies so I can get spammed. If I could connect through Twitter or my gMail I MIGHT consider it, but a seperate login should always be an option.
More here.
Could this be a move aimed at trying to drive more social traffic to articles with the new threat of losing some of the Google love eHow has been enjoying for quite some time (though this notion is disputed by Demand Media)? It's unclear at this point, whether it will actually have any bearing on that, but the timing is interesting. It does seem clear that it is going to alienate some users.
It should, however, be pretty good for Facebook, considering the amount of eHow content that is out there. This wouldn't be the first significant thing Demand Media has done for Facebook's Open Graph.
$DMDD $$ Demand Media Underwriters Buy Additional Shares
Santa Monica-based Demand Media, riding high on a successful IPO debut Wednesday, said Thursday that its underwriters have exercised their option to purchase an additional 675,000 shares from Demand Media, and 660,000 shares from selling stockholders at its initial offering price. The additional shares bring the total shares of common stock up to 10.235M shares in Demand. The firms' underwriters had been granted the option just prior to the firm's debut. Demand originally had filed to offer up to 7.5M shares in its IPO, bumping that to 8.9M on Tuesday evening just prior to the IPO.
$DMD $$ Flush With Cash And Liquid Stock, Demand Media Plans For Acquisitions...
Read more: http://www.businessinsider.com/flush-with-cash-and-liquid-stock-demand-media-plans-for-acquisitions-2011-1#ixzz1CMEnaD4O
Joanne Bradford
DMDJan 28 2011, 01:35 PM EST
21.01 Change % Change
-0.84 -3.84%
Now that Demand Media is public, has liquid stock, and a little cash to spend, it plans to start looking at premium content sites for possible acquisition, a source with knowledge of the company's plans tells us.
We don't know any specific targets, but given what do know, we'd speculate that properties like Sugar Inc, The Huffington Post, Mediaite, and Mashable are the kind of thing Demand would like to buy.
Alternatively, we wouldn't be surprised to see Demand make a run at a network property like Federated Media.
You could see this post-IPO pivot coming. Demand Media CEO Richard Rosenblatt did not shell out big equity to poach Joanne Bradford from her job as the boss of all ad sales at Yahoo to have her selling ads against McContent all day. She's at Demand because she has great relationships with big fancy brand advertisers – advertisers that like to put their brands against premium content.
The other reason Demand would go after premium content is to help the company's branding. For a company that just raised $151 million to set a $1.5 billion market cap, Demand has a few smudges on it thanks to the low quality of its content and it's peculiar accounting methods. Even a relatively small-sized premium property could quickly become the company's overall brand.
Related: 10 Interesting Things We Just Learned About Demand Media
Tags: Demand Media, HuffingtonPost | Get Alerts for these topics »
$DMD $$ Demand Media's Planet of the Algorithms
Fresh off its IPO, Demand Media is blanketing the Web with answers to millions of questions you didn't know you had. Is that a business?
By Felix Gillette
"We are thinking through the implications of, 'How do you editorially program the planet?' " says Byron Reese.
It's March 2010, and Reese, the chief innovation officer of Demand Media (DMD), is accepting a "game changer" award for innovation at the We Media conference in Miami. Several dozen people listen as he invokes Demand's plan for cranking out Web pages and videos to quench every last bit of human curiosity wherever it springs up. The plan's code name: Little Brother, a nod to George Orwell.
Reese does not share many details about how Little Brother will work. Instead, he shows an image from The Terminator. "Perhaps at this point you're thinking, 'I know where all this is going,' " says Reese. " 'I've seen this movie before. The machines are going to start making the decisions. We're going to be ignorant. They're going to take over.' " He assures his audience that Demand Media will not annihilate humanity.
Over the past decade, Reese has quietly pioneered a new breed of media company, colloquially called a "content mill." Where traditional media companies rely on creative professionals to generate ideas aimed at loyal repeat readers, content mills are far more transient. They rely on crowd-sourced stories and search engine optimization, the art of gaming online search results to ensure one appears at the top, to rope in drive-by users looking for a quick hit of information—how to hang a door, say, or make sourdough starter. The pedigree of the source providing it is not important.
Large media companies, including Yahoo! (YHOO) and AOL (AOL), are introducing variations on the content mill model, hoping to draw more traffic, and in turn more advertising revenue, while lowering the costs of content creation. Demand Media is the fastest-spinning mill of all, currently producing more than 5,000 articles and videos for the Internet every day on topics often selected by computers. A decentralized horde of 13,000 freelance writers, editors, and producers earn minimal fees (around $15 for writing an article of a few hundred words) to keep the production line humming. The resulting stories are distributed across Demand-owned websites such as eHow.com, Answerbag.com, or Livestrong.com and are hyper-engineered by specialists to appear at the top of search engine results for a vast number of queries. The stories, which are not tied to news events and are thus designed to have long shelf lives, tend to be coherent but uninspired. The potential for monetization is said to be vast.
"It's a great business model," says Ken Doctor, an affiliate analyst for Outsell. "They've been pioneers in defining a new content creation model based on harnessing so much low-cost content and matching it better than anyone with targeted advertising."
"They really understand consumer behavior on the Web and how to build businesses on it," adds Sheryl Sandberg, Facebook's chief operating officer.
"I feel privileged to be an investor," writes Aviv Nevo, head of venture capital firm NV Investments and one of the largest holders of Time Warner (TWX) stock, in an e-mail. "I am confident that the company will continue to be the premier leader in the creation of rich, focused and tailored content."
On Jan. 25, Demand Media sold 8.9 million shares at $17 each in an initial public offering. The following day, the price rose 35 percent to $22.61, which would give the company a market capitalization of $1.9 billion, greater than New York Times Co.'s (NYT) value of $1.5 billion.
The company spent the past few months in a pre-IPO quiet period. As a result, Reese and Chairman and Chief Executive Officer Richard Rosenblatt, the company's press-friendly face, were unable to comment at press time. According to the prospectus, Demand plans on using the influx of capital for product development and international expansion. Executives have said in the past that someday Demand hopes to crank out as many as a million articles and videos every month.
At the Miami conference, as Reese finishes up his Terminator presentation, he makes it clear that, while easily parodied, he doesn't view himself or Demand as a bringer of intellectual destruction. "This is a frightening notion of the future—that somehow in doing this we lose our fundamental humanity," he says. "I don't think this is the case."
One of Demand's primary selling points to investors is that in just a few years of existence it has already built a huge Web audience. Its prospectus promotes the fact that its sites attracted 105 million unique visitors in November 2010, according to ComScore (SCOR) data, making it the 17th-largest Web property in the U.S.
Raw traffic numbers tell only part of the story. Many analysts now say the best way to gauge a Web company's financial hardiness is to look not at page views or monthly unique visitors but at how much money it can generate from each user. Matthew Shanahan, senior vice-president of strategy for Web consulting firm Scout Analytics, says thriving digital ventures typically have a high ARPU (average revenue per user). Amazon.com (AMZN), for instance, makes on average $189 per unique user. Google (GOOG) takes in around $24. Web publishers, Shanahan says, tend to become reliably profitable at about $10 a user. Demand's average revenue per user currently hovers around $1.60.
Since launching in 2006, Demand has yet to turn a profit. In 2009 it lost $22.4 million on $198.4 million of total revenue, according to its prospectus. In the first nine months of 2010, it lost $6.3 million on revenues of $179.3 million. While it has a lot of unique visitors, they tend to have minimal exposure to advertising, because the average user bounces into a Demand site—and bounces out just as quickly.
According to data from Web research firm Alexa, the average visitor to eHow, Demand Media's most visited site, spends only 2.3 minutes and clicks on 1.7 pages before departing. By comparison, Facebook users average 31.9 minutes and 12.7 page views per visit.
"There is no brand loyalty there," says Shanahan. "They are relying almost purely on bringing in new customers using search engine optimization, which attracts a fly-by audience. As a result, you have this huge revenue risk: Can they keep winning new people? If I were a potential investor, that's the question I would be asking."
In the years ahead, a number of factors could make it tougher for Demand to keep expanding its audience of unique visitors. Considering its voluminous output, Demand eventually could run low on new, lucrative, and underserved how-to subjects. The rise of social media could negatively affect a business model that is unlikely to generate much traffic from recommendations from "friends." Or search engines could tweak their algorithms, making it harder for Demand to score high in search results across such a broad range of subjects. "Looking at the current model—can you really keep doing that for five years and grow the top line the way you're trying to grow it?" asks Shanahan. "It doesn't seem plausible."
A disproportionate chunk of Demand Media's revenue comes directly from Google—making the search giant a life raft for the company. During the first nine months of 2010, according to Demand Media's Securities and Exchange Commission filings, 28 percent of total revenues came from Google. Demand is aware of the risk of piggybacking so heavily on one source for traffic and revenue, warning potential investors in its SEC filings that the company is "dependent upon certain material agreements with Google for a significant portion of our revenue" and that a "termination of these agreements, or a failure to renew them on favorable terms, would adversely affect our business."
"For Google to make a change that would wipe out Demand Media, I'd be surprised," says John Andrews, an SEO consultant in Seattle. "They are carrying Google's ad inventory." Yet on Jan. 21, Matt Cutts, the engineer overseeing Google's search quality team, posted on the company's official blog, explaining that as pure Web spam decreased, the company had shifted its focus and made two major "algorithmic changes" over the past year targeting mills. "Nonetheless," wrote Cutts, "we hear the feedback from the Web loud and clear: People are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content." Does Google consider Demand a content farm? The company did not respond to several e-mails seeking comment.
Gabriel Weinberg, the founder of DuckDuckGo, a niche, privacy-oriented search engine, says the blog post looked to him more like a "PR offensive" than an actual change in policy that would affect Demand. Last year, Weinberg says, after receiving numerous complaints about the quality of Demand articles, he tweaked his algorithm to strip Demand content from his search engine's results. He doubts Google will follow his lead. "They'd be editorializing," Weinberg says. "I think they would be accused of censorship."
Over the past year, Demand executives have taken steps to diversify the company's revenue stream. They have struck a handful of partnerships selling Demand content wholesale to third parties, including the websites of USA Today, the San Francisco Chronicle, and the National Football League. And in March 2010, Demand hired away Yahoo's Joanne Bradford, an experienced digital ad sales executive, to become Demand's chief revenue officer. Bradford now oversees an ad sales staff charged with bringing in brand advertising independent of Google.
In the meantime, the competition among media companies to engineer their content onto the all-important first page of Google search results, no matter how obscure the query, is intensifying. Outsell's Ken Doctor says that businesses such as Examiner.com and Yahoo! Contributor Network are elbowing in on Demand's territory. "Other companies are organizing their own stringer freelance networks using the same kind of technology," says Doctor.
As a result, Demand Media will have to devise new and better ways of extracting revenue from each of its customers in the months to come. For that they are likely to lean heavily on the man who swears he's not the Terminator.
Reese, 42, was born and raised in Texas and graduated from Rice University in Houston in 1991 with a degree in economics. According to his official bio on the Demand Media site, he ran his first business in college, orchestrating "elaborate practical jokes." Reese was unavailable to speak with Bloomberg Businessweek for this story, but interviews with a handful of former colleagues, who say they spent rewarding stretches of their careers working intimately with him, yielded a strong impression. Over the past decade few entrepreneurs have dreamed up more effective and improbable methods of squeezing profits out of obscure corners of the Internet.
Reese lives in a restored Victorian house in the small town of Georgetown, about 25 miles north of Austin. He and his wife, both devout Christians, homeschool their four children and have decorated their home with Biblical paintings. He is an avid deer hunter, has a thing for Byzantine history, and not long ago visited North Korea. According to former colleagues, he has an endless number of business ideas.
"He's an idea generator," says David Hehman, an angel investor in the San Francisco area who helped to back Reese's first major Web venture. "The guy just has a gazillion ideas," says Johnny Anderson, a business executive in Texas who worked alongside Reese at a software company called HotData in the late '90s. "He comes up with off-the-wall ideas and then he executes them," says Zach Hotchkiss, Reese's former head of e-commerce and marketing.
One of Reese's longtime passions, according to his former colleagues, has been making money by identifying and filling in what he sees as the vast gaps in humanity's collective knowledge, as represented by pages on the Web. Over the past decade, Reese has made a small fortune running an eclectic series of Internet ventures somehow related to this idea—and that collectively set the framework for much of Demand Media's current business model.
Around 2000, after roughly a decade working as a marketing executive for various software companies in California, Oregon, and Texas, Reese decided to strike out on his own and wrote a business plan for a company called Brilliant Pebbles, borrowing the name of a Reagan-era missile defense system. At the time a number of media giants—AOL, Yahoo, Microsoft (MSFT), and others—were battling to create the dominant portal. Reese saw an opportunity: What if there were no portal? What if search engines, particularly Google, became so efficient and well-trafficked that users bypassed gatekeepers and went right to the content?
Reese's idea, according to Anderson, was to create a media company catering directly to Google users. The articles could be largely unbranded, because people wouldn't be coming to you for your news judgment, editorial style, or the number of Pulitzers your staff had won. They'd be coming to your page to learn, say, how to treat an allergic reaction to a bee sting because they stumbled on it immediately after they got a bee sting and turned to Google for answers.
In 2000, Hehman decided to help back Brilliant Pebbles. "I liked Byron's raw intelligence," he says. "This guy is probably the smartest guy I know, and it's on a variety of topics: everything from the world's religions to history to technology. He's a really eccentric individual."
Reese opened an office in Austin and renamed the company PageWise. To make the venture work he needed lots of low-cost content, so he launched a feeder site called writeforcash.com. "From needlecrafts to networking, we need your articles," read a version of the site's home page. "We are seeking articles on specific topics that we know to be popular and sought after by people searching on the Internet. Some examples include, 'How to program a universal remote,' 'How to make a sock monkey,' and 'All about Louis Vuitton Handbags.' Get started today!"
Potential candidates flooded in, and Reese gathered a collection of writers willing to fulfill assignments for minimal fees (typically $10 or $15 per article) and no benefits. He used the incoming articles to stock a hodgepodge of sites, such as AllSands.com and WebGuru.com, which promised "to mine all the knowledge of the human race and make it available for free to everyone."
Reese's plan was to monetize the resulting Web traffic using advertising. Then the Internet bubble burst and ad rates plummeted. "We laid everybody off," recalls Hehman. "It was just Byron, his ideas, and the chief technology officer."
Reese reconsidered his business model. Thanks to the churning content mill, he had lots of article pages and plenty of eyeballs, but no significant advertising. So, in a period of aggressive experimentation, he decided to try to monetize his own audience with his own advertisements for his own products.
Every week, according to Peter Handsman, the former CTO, Reese would come up with an idea for something new to peddle. They would draft a business plan, launch a website, and measure consumers' subsequent interest in a product. Efforts to sell coins and watches failed. At one point, Reese tried manufacturing family portraiture using inexpensive subcontractor artists in places such as Russia. The concept wasn't easy to expand. "A lot of people have ideas," says Handsman. "Byron has the discipline to actually measure them. He was willing to come up with a ridiculous number of ideas, but he was also willing to abandon them if they were proven not to work."
Eventually some experiments succeeded. One early hit was a genealogy website where customers could create collectible items decorated with customizable family crests. Reese bought a laser engraver and began shipping out everything from scrolls to plaques to wine glasses decorated with ornate insignias. At around the same time, PageWise happened onto a surprisingly lucrative market for customizable Italian charm bracelets.
In 2002, PageWise launched santamail.org. The site sold parents personalized letters from Santa Claus for their kids. Each letter was postmarked North Pole, Alaska, and sold for $9.95. "The margins were ridiculously high," recalls Hotchkiss, the former head of e-marketing for PageWise. "The volume was insane. It became a cash machine."
Shortly thereafter, Reese's content mill prototype started producing serious revenue, too, thanks to Google's AdSense. Under the program, which launched in 2003, Web publishers could sign up to be Google partners. Google would then go out and sell ads, place them alongside related content on partners' websites, and share a cut of the resulting revenues. "We were selling $6 million worth of jewelry a year by then," says Hehman. "The content money was just gravy."
Reese kept tinkering. In the summer of 2005 he launched happynews.com, which aggregated sunny news stories from around the Web. The site was popular with readers and a punching bag for critics. "Prozac for the eyes," wrote Paul Farhi in The Washington Post.
Reese had ambitions beyond text. He told colleagues that as the price of bandwidth fell, people would begin spending more time viewing Web videos. According to his calculations, Hollywood was spending an average of about $1,000 per one-thirtieth of a second of video. He set out to see if he could produce video for a penny a frame. Not long after jumping into the happy-news business, Reese launched a how-to video site called ExpertVillage.com. In August 2006, the company announced the official debut of its Filmmaker Program. The idea was to recruit some 5,000 freelance filmmakers. Once registered, they could claim assignments from a long list of search-friendly topics. Reese budgeted $2 million to create 75,000 how-to videos over the next 18 months. "We looked at the production of video not as a creative process as it has always been viewed but as a manufacturing process," Reese said in a radio interview with the Christian news organization American Vision. "When it's a manufacturing process, you learn how to optimize certain steps of it and lower costs."
In 2006, Richard Rosenblatt, a polished Southern California media executive, founded Demand Media with an investor named Shawn Colo. Rosenblatt had previously run Intermix, the parent company of Myspace, and orchestrated a sale of the company to News Corp. (NWS) for $580 million. Rosenblatt and Colo raised $355 million and went on an acquisition spree, eventually purchasing eNom, now the world's second-largest Internet domain registry; eHow.com, an online instructional content provider; Pluck, a social networking business; and a hodgepodge of niche content sites, such as Cracked.com and GolfLink.com.
What attracted Rosenblatt to PageWise, according to former CTO Handsman, was not the Italian charm bracelets, the family emblem scrolls, the letters from Santa, or even the happy-news stories. Rosenblatt was interested in Reese's model for manufacturing high-volume, low-cost videos. In June 2007, Demand Media bought PageWise for $15.8 million.
To make cheap content, Demand relies on its seemingly ever-expanding army of 13,000 freelance writers, copy editors, and filmmakers, who have passed the company's vetting process to become members of something called Demand Media Studios. Once accepted into the "studio," writers and producers can log onto a website and choose assignments from a list of possible topics.
The assignments are generated via proprietary black-box technology, which sifts through data on what people are typing into search engines, compares the search queries with keyword advertising rates, and then analyzes how many websites are already serving that particular market. If after mining the data the algorithm determines that a certain headline for a specific topic, no matter how obscure, will be profitable, it pushes the idea into the pipeline. Last year, Demand Media executives told Wired magazine that the mechanized assignments generate 4.9 times more revenue than ideas generated by humans.
In the spring of 2007, a few months before selling PageWise to Rosenblatt, Reese delivered a lecture at Austin's annual South by Southwest festival. His topic: how to start an Internet business for $100.
That afternoon, Reese recommended the crowd get into Web publishing. "The Internet has six billion pages on it right now," Reese said. "Believe it or not, it needs a whole lot more. There's a huge, huge, huge shortage on the Internet of the kind of information that people are actually searching for." The key, he said, was to keep costs low. If possible, don't pay for the intellectual content. Look for material, he urged, on which the copyright has expired. Any book published in the U.S. before 1923 was available.
He said he was in the process of turning vanloads of old books into websites. With a few hours of labor, for example, you could take a turn-of-the-century Creole cookbook and transform it into the definitive site for vintage Creole recipes. Google's AdSense program would then load the thing up with ads for shrimp and cooking pots and spices and direct people looking for shrimp recipes to your website. Every time someone clicked on an ad, you got a cut of the resulting revenue. On a click-by-click basis, those payouts were likely to be minuscule. Don't scan one book. Scan a thousand.
Reese said that years earlier he had created a site called Essortment.com. Over the years the cheaply constructed nonperishable articles stayed more or less the same, while fresh Google ads kept pouring in. "To this day, Google sends me over a hundred thousand dollars a month off this one site," said Reese. "It's like the Energizer Bunny. It goes up to $200,000. It drops off to $70,000. But it never fluctuates out of that range. Year after year after year."
Demand Media executives hope the same is true for their growing library of videos and articles—an ageless future, supported in perpetuity by Google paychecks. They are not the Terminator. They are a pink, fuzzy, hardworking bunny.
As he wound down his talk in Austin, Reese explained the key to success on the Web. He told the crowd of conventioneers to have a bias toward action and not to try to be too smart. "Be as agnostic as possible," he said. "Don't be a true believer in anything."
Gillette is a staff writer for Bloomberg Businessweek in New York.
$DMD Demand Media Says It’s Getting Along Just Fine With Google, Thank You Very Much
by Peter Kafka
Posted on January 27, 2011 at 3:00 AM PT
So the first wave of investors has taken a look at Demand Media, and they’re buying: The “content creation platform,” as the company likes to describe itself, closed at $22.65 yesterday, up 33 percent on its first day of trading.
Again, be wary of reading too much into any stock’s performance on any given day. But it seems safe to draw at least one conclusion: Investors aren’t freaked out about Demand’s symbiosis with/dependence on Google. Even after a puzzling blog post from the search giant last week.
The post, written by Google engineer Matt Cutts, defended the search engine’s performance against a chorus of criticism. But it acknowledged that Google was paying attention to complaints about “content farms and sites that consist primarily of spammy or low-quality content” clogging its search results.
Lots of people logically assumed that Google/Cutts was talking about Demand, although the post never mentioned the company by name. And if Google, which supplies 28 percent of Demand’s revenue and a big slug of its traffic, has a problem with Demand…
But Demand CEO Richard Rosenblatt insists that Cutts wasn’t talking about his company at all. In fact, he says, Demand and Google are getting along just great, in a relationship that pays out real dividends for both parties. It looks like investors believe him.
I chatted with Rosenblatt about the Google post, and the companies’ relationship, yesterday at Demand’s New York outpost. Here’s an excerpt from our conversation:
Peter Kafka: Do you think that Google post was directed at you in any way?
Richard Rosenblatt: It’s not directed at us in any way.
Did you talk to them about that?
I can’t comment on that.
Okay. But they wrote this post, which talks about content farms, and even though you say they weren’t talking about you, it left a lot of people scratching their heads.
Let’s just say that we know what they’re trying to do. Last year, they put out three major changes. They put out Mayday–that was going specifically after spammers and low-quality content. Our traffic increased when they did that. The reason why is our content is being scraped and stolen, [because we're] the largest content producer. So they’re looking for original, non-duplicated, human-made content. That’s all our content. So if they were targeting us, you’d also see Wikipedia, About.com, Wikihow, every person that makes more than a few dozen articles….Our traffic went up.
Second one: They did something called Caffeine, to increase the [search] index. Our traffic went up.
They then did Google Instant. Our traffic went up.
So the three things [Cutts] talks about in his blog post did not adversely affect us. You can draw your own conclusions.
The post talks about going after spammers and content farms. But when you guys think of content farms, you don’t think that means Demand, right? You’re thinking of people who take my copy or your copy, and cut and paste it, and tweak it enough to fool Google.
He’s talking about duplicate, non-original content. Every single piece of ours is original. Written by somebody. And I understand how that could confuse some people, because of that stupid “content farm” label, which we got tagged with. I don’t know who ever invented it, and who tagged us with it, but that’s not us…We keep getting tagged with “content farm”. [Ahem.] It’s just insulting to our writers. We don’t want our writers to feel like they’re part of a “content farm.”
So can you sum up your relationship with Google today?
This is why our partnership with Google makes sense. 1) We help them fill the gaps in their index, where they don’t have quality content. 2) We’re the largest supplier of all video to YouTube, over two billion views and 3) we’re a large AdSense partner. So our relationship is synergistic, and it’s a great partnership. And it’s a partnership that we’re excited to continue to expand.
http://mediamemo.allthingsd.com/20110127/demand-media-says-its-getting-along-just-fine-with-google-thank-you-very-much/
Demand Media, Inc. Announces Exercise of Option to Purchase Additional Shares in its Initial Public Offering
DMD Rx VIPPS DD
Date : 01/27/2011 @ 7:15PM
Source : Business Wire
Stock : Demand Media, Inc. (DMD)
Quote : 21.85 -0.8 (-3.53%) @ 8:00PM
Demand Media, Inc. Announces Exercise of Option to Purchase Additional Shares in its Initial Public Offering
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Today : Friday 28 January 2011
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Demand Media, Inc. (“Demand Media”) (NYSE: DMD) announced today that, in connection with Demand Media’s initial public offering, the underwriters have exercised in full their option to purchase an additional 675,000 shares from Demand Media and 660,000 shares from the selling stockholders at the initial public offering price of $17.00 per share. The full exercise of the option to purchase additional shares brings the total number of shares of common stock to be sold in the initial public offering to 10,235,000 shares. Demand Media will not receive any of the proceeds from the sale of shares of common stock by the selling stockholders.
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated are acting as joint book-running managers for this offering. UBS Securities LLC, Allen & Company LLC, Jefferies & Company, Inc., Stifel, Nicolaus & Company, Incorporated, RBC Capital Markets Corporation, Pacific Crest Securities LLC, Raine Securities and JMP Securities LLC are acting as co-managers for this offering. This offering will be made only by means of a written prospectus forming part of the effective registration statement relating to these securities. Copies of the prospectus may be obtained by contacting Goldman, Sachs & Co., 200 West Street, New York, NY 10282, Attention: Prospectus Department (Tel: +1 866 471 2526; Fax: +1 212 902 9316; e-mail: prospectus-ny@ny.email.gs.com) or Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, NY 10036, Attention: Prospectus Department (Tel: +1 866 718 1649; e-mail: prospectus@morganstanley.com).
A registration statement on Form S-1 relating to the initial public offering of shares of Demand Media’s common stock was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on January 25, 2011. Copies of the registration statement can be accessed through the SEC’s website at www.sec.gov. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
$DMD Demand Media - Amended Statement of Beneficial Ownership (3/A)
Date : 01/27/2011 @ 3:29PM
Source : Edgar (US Regulatory)
Stock : (DMD)
Quote : 21.85 -0.8 (-3.53%) @ 8:00PM
http://ih.advfn.com/p.php?pid=nmona&article=46198292
SXSW 2010: Richard Rosenblatt Interview: Content On Demand
Demand Media $DMD these 12 Online Pharmacies hope you stay a around awhile... Because it is a Win Win for all involved with $DMD For example
AETNA, BioScrip, CIGNA, CVS, DRUGSTORE.COM, EXPRESS SCRIPTS, HealthWarehouse.com, MEDCO HEALTH SOLUTIONS, SUPERVALU, UNITEDHEALTH GROUP, WALGREEN, and even a little 1-800-PETSMeds... Will be very THANKFUL you are here for being so Proactive in Policing Online Pharmacies acting in Violation of U.S. Laws.
In My Opinion
EQUITIES Rx (VIPPS INDEX) For 2011 is an Index of Publicly Traded Internet Pharmacies that have been Verified Legitimate from National Association of Boards of Pharmacy.
$DMD
We recently entered into an agreement with LegitScript, LLC, an Internet pharmacy verification and monitoring service recognized by the National Association of Boards of Pharmacy, to assist us in identifying customers who are violating our terms of service by operating online pharmacies in violation of U.S. state or federal law. Under that agreement, LegitScript provides us a list, updated regularly, of customers using their domain names knowingly to host illegal online pharmacies, allowing us to better enforce our policy of terminating services or taking other appropriate action against customers engaged in illegal activity in violation or our terms of service. In addition, LegitScript has agreed to serve as a resource to us regarding issues concerning drug safety, pharmacy laws and regulations, coordination with law enforcement authorities, and complaints regarding action taken by us against our customers based on information provided by LegitScript. We have agreed to assist LegitScript with its research concerning illegal online pharmacies by providing our expertise in the domain name registrar business. Our agreement with LegitScript may not be sufficient to identify all illegal online pharmacies hosted by our customers, may not protect us from further criticism when our customers engage in illegal activities, will not address any illegal activities other than in the online pharmacy area, and may subject us to complaints or liability if we terminate customer websites mistakenly.
Several bodies of law may be deemed to apply to us with respect to various customer activities. Because we operate in a relatively new and rapidly evolving industry, and since this field is characterized by rapid changes in technology and in new and growing illegal activity, these bodies of laws are constantly evolving. Some of the laws that apply to us with respect to customer activity include the following:
The Communications Decency Act of 1996, or CDA, generally protects online service providers, such as Demand Media, from liability for certain activities of their customers, such as posting of defamatory or obscene content, unless the online service provider is participating in the unlawful conduct. Notwithstanding the general protections from liability under the CDA, we may nonetheless be forced to defend ourselves from claims of liability covered by the CDA, resulting in an increased cost of doing business.
The Digital Millennium Copyright Act of 1998, or DMCA, provides recourse for owners of copyrighted material who believe that their rights under U.S. copyright law have been infringed on the Internet. Under this statute, we generally are not liable for infringing content posted by third parties. However, if we receive a proper notice from a copyright owner alleging infringement of its protected works by web pages for which we provide hosting services, and we fail to expeditiously remove or disable access to the allegedly infringing material, fail to post and enforce a digital rights management policy or a policy to terminate accounts of repeat infringers, or otherwise fail to meet the requirements of the safe harbor under the statute, the owner may seek to impose liability on us.?
Although established statutory law and case law in these areas to date generally have shielded us from liability for customer activities, court rulings in pending or future litigation may serve to narrow the scope of protection afforded us under these laws. In addition, laws governing these activities are unsettled in many international jurisdictions, or may prove difficult or impossible for us to comply with in some international jurisdictions. Also, notwithstanding the exculpatory language of these bodies of law, we may be embroiled in complaints and lawsuits which, even if ultimately resolved in our favor, add cost to our doing business and may divert management's time and attention. Finally, other existing bodies of law, including the criminal laws of various states, may be deemed to apply or new statutes or regulations may be adopted in the future, any of which could expose us to further liability and increase our costs of doing business.
Demand Media ?$DMD "The Offering"
Common stock offered by us
4,500,000 shares
Common stock offered by the selling stockholders
4,400,000 shares
Common stock outstanding after this offering
81,964,617 shares, or 82,639,617 shares if the underwriters exercise their option to purchase additional shares in full.
Use of proceeds
We expect to receive net proceeds from this offering of approximately $66.5 million, based upon the initial public offering price of $17.00 per share, and after deducting underwriting discounts and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares in this offering by the selling stockholders, including upon the sale of shares if the underwriters exercise their option to purchase additional shares from certain of the selling stockholders in this offering. We intend to use the net proceeds from this offering for investments in content, international expansion, working capital, product development, sales and marketing activities, general and administrative matters and capital expenditures. We currently anticipate that our aggregate investments in content during the year ending December 31, 2011 will range from $50 million to $75 million. See "Use of Proceeds."
Directed share program
The underwriters have reserved for sale, at the initial public offering price, up to approximately 431,000 shares of our common stock being offered for sale to business associates, Demand Media customers and friends and family members of certain of our directors and officers. We will offer these shares to the extent permitted under applicable regulations in the United States and in various countries. The number of shares available for sale to the general public in this offering will be reduced to the extent these persons purchase reserved shares. Any reserved shares not purchased will be offered by the underwriters to the general public on the same terms as the other shares.
New York Stock Exchange symbol DMD
Demand Media $DMD BREAKOUT The ICE.... Welcome Investor's Hub, Home of the Best DD on $DMD.... For Free!
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Demand Media Celebrates its IPO on the New York Stock Exchange
Date : 01/26/2011 @ 9:50AM
Source : Business Wire
Stock : NYSE Euronext (DMD)
Quote : 22.65 5.65 (33.24%) @ 8:00PM
Demand Media Celebrates its IPO on the New York Stock Exchange
Demand Media, Inc. today opened for trading on the New York Stock Exchange under the ticker symbol “DMD” after its IPO, in which it raised $151.3 million in gross proceeds. Demand Media, Inc. is a leading online media company.
“We are thrilled to welcome Demand Media, Inc., a leading innovator in the online media space, to our growing network of technology-based listed companies,” said Scott R. Cutler, EVP and Co-Head of U.S. Listings and Cash Execution, NYSE Euronext. “Demand Media is at the forefront of transforming the media landscape and we look forward to a lasting partnership with the company and its shareholders.”
Background:
As of December 31, 2010, NYSE Euronext markets listed 585 technology companies with a total combined market capitalization of $3.895 trillion. Notable recent tech listings include Youku.com (YOKU); E-Commerce China Dangdang Inc (DANG); iSoftStone Holdings Limited (ISS); Motorola Mobility Holdings, Inc. (MMI); Inphi Corporation (IPHI), and Green Dot Corp. (GDOT).
In 2010, NYSE Euronext (NYX) led the U.S. market for Initial Public Offerings (IPOs) and new listings both in total capital raised as well as number of transactions, with $39.1 billion in IPO proceeds raised on the New York Stock Exchange (NYSE) through a total of 99 IPOS, including a rising share of technology companies.
About Demand Media, Inc. (NYSE: DMD)
Demand Media, Inc. is a leading online media company that informs, entertains and connects millions of people every day. Through a portfolio of vertical web properties reaching over 100 million monthly visitors, a global network of digital partners, and an innovative content studio, Demand Media publishes what the world wants to know and share. Founded in 2006, Demand Media is headquartered in Santa Monica, CA with offices in Bellevue, WA, Austin, TX, Chicago, IL, New York, NY and London, UK. For more information about Demand Media, visit: www.demandmedia.com
About NYSE Euronext Read more..
Demand Media DMD
Demand Media is a leading online media company that informs, entertains and connects millions of people every day. Through a portfolio of vertical web properties reaching more than 90 million monthly visitors, a global network of digital partners, and a breakthrough content studio, Demand Media publishes what the world wants to know and share. Founded in 2006, Demand Media is headquartered in Santa Monica, CA with offices in Bellevue, WA, Austin, TX, New York, NY and London, UK. For more information visit http://www.demandmedia.com
Leading global provider of online content and domain name registration services.
This is an initial public offering of shares of common stock of Demand Media, Inc.
Demand Media is offering 4,500,000 of the shares to be sold in the offering. The selling stockholders identified in this prospectus are offering an additional 3,000,000 shares. Demand Media will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.
Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $ and $ .
Application has been made for listing on the New York Stock Exchange under the symbol "DMD."
From Wikipedia, the free encyclopedia
Demand Media
Industry Internet
Founded Santa Monica, California
(May 1, 2006)
Headquarters 1333 Second Street #100
Santa Monica, California, USA
Key people Richard Rosenblatt, Co-Founder, Chairman and Chief Executive Officer
Shawn Colo, Co-Founder and Head of M&A
Charles Hilliard, President and CFO
Revenue $200 million USD (2008) [1]
Employees 500 (2008) [2]
Website www.demandmedia.com
Demand Media, Inc. is a privately held online media company that operates online brands such as eHow, LIVESTRONG.COM and Cracked, and is known for creating online content based on a combination of measured consumer demand and predicted ROI. The company also provides social media platforms to existing large company websites and distributes content bundled with social media tools to outlets around the web. The company also owns eNom, the world’s second-largest domain registrar.
Demand Media was created in 2006 by a former private equity investor, Shawn Colo, and the former chairman of MySpace.com, Richard Rosenblatt.
The company employs an algorithm that identifies topics with high advertising potential, based on search engine query data and bids on advertising auctions. These topics are typically in the advice and how-to field. It then commissions freelancers to produce corresponding text or video content. The content is posted on a variety of sites, including YouTube (where Demand Media is one of the largest suppliers of videos) and the company's own sites such as eHow, LIVESTRONG.COM, Trails.com, GolfLink.com, Mania.com, and Cracked.com.
Form Description Company (Filer) View File Size Received ( Period )
S-1/A Securities Registration Statement DEMAND MEDIA INC. 5549.1 kb 10/29/10
S-1/A Securities Registration Statement DEMAND MEDIA INC. 5314.5 kb 10/12/10
S-1/A Securities Registration Statement DEMAND MEDIA INC. 5806.9 kb 09/16/10
S-1 Securities Registration Statement DEMAND MEDIA INC. 9324.9 kb 08/06/10
D Small Company Offering and Sale of Securities Without Registration DEMAND MEDIA INC. 14 kb 07/13/10
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Demand Media, Inc. (Demand Media) is focused on an Internet-based model for the professional creation of content at scale. The Company's business is comprised of two service offerings: Content & Media and Registrar. Demand Media's Content & Media service offering includes, Content creation studio that identifies, creates and distributes online text articles and videos, utilizing its algorithms, editorial processes and community of freelance content creators; Enterprise-class social media applications that enable Websites to offer features, such as user profiles, comments, forums, reviews, blogs and photo and video sharing, and a system of monetization tools that are designed to match targeted advertisements with content in a manner that optimizes advertising revenue and end user experience. The Company's Registrar, with over 10 million Internet domain names under management, is a wholesale registra |
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