Info-Publishing and Domain Name Giant Demand Media Files For IPO
By Anna Johnson on August 8th, 2010Demand Media – the company behind such popular information sites as eHow.com and the domain registry eNom – has filed for an initial public offering (IPO) aimed at raising $125 million.
Demand Media’s IPO prospectus indicates the company isn’t yet profitable. In 2009 Demand Media made a loss of $21.9 million on revenues of $198 million. In the first half of 2010, the company made a loss of $6 million on revenues of $108 million.
Where does Demand Media make most of its money?
While the Internet media has given a lot of attention to Demand Media’s information publishing business – denigrated by some as ‘content farms’ – this accounted for revenues of $67 million in the first 6 months of 2010 (59 percent of the total), whilst $47 million (41 percent) came from Demand Media’s domain name registration business. (To arrive at its stated $108 million revenues for the period, Demand Media deducted traffic acquisition costs of approx. $6 million.)
eHow is Demand Media’s highest earning information business, contributing 21 percent of all revenues for the period to June 30, 2010.
Indeed, eHow is a top 20 ranked website in the United States with 46 million unique visitors in June 2010, according to comScore. eHow’s library includes approximately 1.4 million text articles and over 150,000 instructional videos.
Much of eHow’s revenue comes from running Google ads. In fact, 26 percent of Demand Media’s 2010 ad revenue came from cost-per-click advertising provided by Google.
Demand Media isn’t just highly dependent on Google for ad revenue, but also for traffic. According to Demand Media’s IPO prospectus, in the first half of 2010, 60 percent of traffic to eHow came from Google searches.
You can bet, then, that Demand Media takes both search engine optimization (SEO) and its relationship with Google seriously! You won’t see any blackhat shenanigans from these Demand Media!
Demand Media’s IPO prospectus also reveals that in the first half of 2010 Demand Media’s websites generated 3.9 billion page views with an average revenue per thousand page views (RPM) of USD $11.81.
During the first half of 2010, Demand Media’s domain name registration business made an average of $9.96 per domain. As at the end of June 2010 there were 10.1 million domains registered with Demand Media’s domain name registration business.
August 8th, 2010 at 11:11 am
something doesnt add up
you report 10 million domains in the first half at 9.95 or roughly 100 million in revenue.
You also say that the first half of 2010 they had revenue of 108 million.
So none of the other web properties made any revenue?
August 8th, 2010 at 7:11 pm
Oops, good pick up Brian. I’ve clarified the post to state that Demand Media’s domain name registration had 10.1 million domains registered with it at the end of June 2010. That doesn’t mean the company ‘sold’ 10.1 million domains during the period (as I’d erroneously indicated previously).
August 8th, 2010 at 9:47 pm
This news is a great spotlight for the SEO industry. Since many investors including executives will be following this IPO some may even decide to grow or develop in house SEO teams. I think more people will be looking to take Internet marketing courses and learn the science behind SEO.
I’m also curious since it’s been made public that Demand Media relies heavily on the search engine algorithms if any future ‘May Day’ updates will affect the stock once it goes public. It’ll be an interesting story to follow.