Demand Media Inc. took a beating last year when Google Inc. significantly slowed web traffic to Demand’s sites. But the online publisher looks like it is finally on the mend.
Demand last month reported that its quarterly revenue was way up, its page views had increased and – for the first time since it went public last year – it reported net income. It was a thin profit of only $94,000, but it was a victory for a company that thoroughly revamped its strategy.
Demand’s main business is creating content for its three websites. The Santa Monica company sold ads for the sites and commanded premium prices thanks to billions of readers directed to its sites from search engines. But when Google last year started favoring sites it deemed had higher-quality content, Demand’s traffic swooned.
Retooling content and strategy has been a big undertaking for the company once slammed as a “content farm.” Part of the process involved removing more than 600,000 low-quality or redundant articles. But it was necessary.
“Demand was forced to clean and scrub its content,” said Anil Gupta, an analyst with Imperial Capital in Century City. “They were successful in removing low-quality content that was user generated and raising the quality of what they were producing. That was the key.”
The company, which employs 600, has made other moves, too. Last fall, it formed a partnership with San Bruno-based YouTube Inc. as part of the video site’s $100 million effort to create original channels. Demand formed three channels for YouTube that are spinoffs of its sites eHow, for basic information and instruction for do-it yourselfers; LiveStrong Women, focused on health and fitness; and eHow Pets.
These channels show Demand’s focus on expert-driven content. For example, videos on the eHow Pets channel feature dog trainer Victoria Stilwell, who has hosted programs on CBS and Animal Planet. The Livestrong Women channel featured a series that followed four female athletes as they competed in the 2012 Olympics in London.
Michael Blend has led Demand’s content side during the turnaround. Blend, who was promoted last month from head of content to president and chief operating officer of the company, came to Demand in 2006 when it acquired his domain registration company.
He sees the company’s recent upswing as an adaptation to the ever-changing nature of the Internet.
“We’re always making improvements in the types of content we produce,” he said. “What you’re seeing is the results of that labor and the continued effort to produce better work.”
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