Demand Media IPO Numbers

If you’ve been following Demand Media and their success in creating mass content creation using sophisticated search data combined with cheaply paid editors for long-tail search traffic, then you may find a recent post by Gil Reich interesting.

Demand Media LogoI discussed Demand Media during my UGC talk at Pubcon and fully intend to cover them on this site, even if much of their content is actually paid for, versus purely user-generated. The reason I usually discuss them is because I often find myself educating people about the goldmine that is available in long-tail SEO (with UGC being the top tactic at targeting the long-tail).

Onto the post. Gil works for, a direct competitor of Demand Media for many long tail search queries. I haven’t met Gil, but I will soon as he will be speaking with me on the UGC panel of SMX East. When Demand Media released some numbers for their IPO, Gil took a look through the 269 page document to highlight some numbers that are counter to the story that has been written about Demand Media. In particular, he noticed:

  • Demand’s content farm made $73 million, not $200 million (still a sizable chunk).
  • Demand lost $22 million lat year (the number should be higher due to amortizing creation costs over 5-year periods rather then when the service is performed). Demand has lost $52 million since its formation in 2006.
  • 60% of eHow’s pageview traffic comes from Google. There’s no question that eHow and LiveStrong heavily depend on Google for their traffic and a single update could greatly decrease their traffic (I expected the Caffeine update to hit Demand Media hard, but it didn’t seem to affect them as much as I would have thought).

If these numbers are of interest to you, especially if you are considering investing in the IPO, I suggest you read Gil’s article about Demand Media.

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1 Response to Demand Media IPO Numbers

  1. Gil Reich says:

    Nice post, Dustin, and thanks. I look forward to speaking with you at SMX.

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