Demand Media files for IPO
The media syndication company has been criticized for its "content farm" model, but has managed to prove that it can make a few bucks doing so.
Demand Media, the publishing company that achieved both impressive revenues and industry notoriety for its business model of fast, cheap content, is planning to go public.
The company filed an S1 form with the U.S. Securities and Exchange Commission (SEC) on Friday. The SEC filing reveals that Demand's revenues in 2009 were $114 million, with losses of $22 million. Demand hasn't yet specified a value for the IPO or the index on which it plans to trade.
The Santa Monica, Calif.-based Demand popularized the model that has become known as a "content farm" or "content mill" by critics--using algorithms to determine high-priority topics and destinations for digital print and video content, and then quickly assigning freelancers to produce the content in question. There are more than 10,000 freelancers in Demand's network now. The company syndicates to partner sites, and also owns a number of standalone content sites like eHow, Trails.com, Cracked, and Livestrong.com.
Demand also has competition. AOL has launched a similar system of its own, called Seed.com, to manage freelance work on its many blogs and content sites as it attempts to position itself as a bigger player in the media business. A smaller rival, Associated Content, was acquired by Yahoo earlier this year.
There may be roadblocks to Demand's continued growth, too. A trade group called the Internet Content Syndication Council has said that the rise of companies like Demand "(threaten) to degrade the overall quality of content, thereby reducing the usefulness of the Internet for users seeking information--and also for the advertisers who want a good environment for their messages," and has called for a dialogue about some kind of stamp of quality for digital content.
Google, too, has applied for a patent for a technology pertaining to "identifying inadequate search content," something that may be aiming in the direction of quickly produced content that's specifically designed to pull in high search engine rankings.
Demand characterizes its content as "relevant (and) high-quality."