Demand Media has sold Creativebug, an online video arts and crafts business, to Otter Media for $10 million. Demand also completed the sale of its real-time engagement solution business, CoveritLive, to Canadian company ScribbleLive.

“These divestitures allow Demand Media to refocus attention from nascent businesses in emerging markets to opportunities that are more in line with our overall growth strategy,” interim Chief Executive Shawn Colo said in a statement.

Creativebug is the first acquisition for Otter Media, a video venture formed by AT&T and Chernin Group that announced plans in April to invest $500 million in acquiring and launching large-scale video services. The joint venture also holds a majority stake in Crunchyroll, a subscription video service for Japanese anime and Asian content.

AT&T and Chernin Group ran an unsuccessful $500 million bid for Hulu last year, before co-owners Disney, 21st Century Fox and NBCUniversal decided to retain their ownership in the online video streaming service.

Shares of Demand Media were down 10 cents, or 2.2 percent, to $4.43 a share midday Monday on the New York Stock Exchange.

Staff reporter Melissah Yang can be reached at Follow her on Twitter @MelissahYang for the latest in L.A. tech news.

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