Content mill Demand Studios has changed their name to Demand Media, and are filing an IPO – with Google funding a huge chunk. Who’d have thought – Google backing a content farm!
According to the filing, DM says,
“We have an extensive relationship with Google and a significant portion of our revenue is derived from cost-per-click performance-based advertising provided by Google. For the year ended December 31, 2009 and the six months ended June 30, 2010, we derived approximately 18% and 26%, respectively, of our total revenue from our various advertising arrangements with Google.”
the IPO paper goes on to address SEO:
“Another method we employ to attract and acquire new, and retain existing, users and customers is commonly referred to as search engine optimization, or SEO. SEO involves developing websites to rank well in search engine results.
Our ability to successfully manage SEO efforts across our owned and operated websites and our customer websites is dependent on the timely modification of SEO efforts from time to time in response to periodic changes in search engine algorithms, search query trends and related efforts by providers of search services designed to ensure the display of unique offerings in search results.
Our failure to successfully manage our SEO strategy could result in a substantial decrease in traffic to our owned and operated websites and to our customer websites through which we distribute our content, which would result in substantial decreases in conversion rates and repeat business, as well as increased costs if we were to replace free traffic with paid traffic. Any or all of these results would adversely affect our business, revenue, financial condition and results of operations.”
Google has allowed the proliferation of content farms, and DM irately defends on page 20 of the document their place on the net:
“Perception that the quality of our content may not be the same or better than that of other published Internet content, even though baseless, can damage our reputation. We are frequently the subject of unflattering reports in the media about our business and our model.”
A Financial Times article touched on the subject of content mills in a recent interview with Googler Amit Singhal, who oversees Google’s ranking algorithms. Singhal said:
“If there is an information gap out there and someone fills that gap, it’s good for the world.”
So what does this mean for the web? Is Google trying to gain control of Demand in order to take them over? AOL has their own content program, and Yahoo is the news portal – perhaps Google intends to make Demand their own little generator. Hopefully for Demand contributors, the IPO won’t affect the hundreds of work at home moms and wannabe freelancers who make dollars for articles there.
Accordong to TopNews, the sale is prompted by Demand’s catastrophic losses over the past few years:
“The Santa Monica, California-based Corporation for the first time posted its income. It reported a $22.3 million loss on proceeds of $114 million, for the first half of the year. The figure is quite less compared to its result in 2009, where the firm had incurred a loss of $28.9 million on revenue of $91.3 million, during the same time frame.”