• The Wall Street Journal, Thursday, August 12, 2010 2:26 PM

Over the past couple of years, Demand Media founder and CEO Richard Rosenblatt has repeatedly told members of the press that the company was profitable. After digging through the company's IPO filing, however, The Wall Street Journal reveals that Demand was "deep in the red," last year. "In fact, Demand Media ... has never been profitable since its inception, according to the filing." In 2009, its loss was $22 million, wider than a $14.2 million loss a year earlier, reports The Journal's Digits blog. In the first six months of this year, meanwhile, the loss was $6.1 million, and its accumulated deficit stands at $52 million.

"That certainly doesn't sound like the profitable company that Rosenblatt has repeatedly described," remarks Digits. Anticipating Demand response, Digits guesses that the company will point to "non-GAAP numbers in the IPO filing that exclude a host of items." These numbers -- "adjusted OIBDA," or adjusted operating income before depreciation and amortization expense -- show the company made $36.8 million in 2009. "But adjusted OIBDA is hardly what most people think of when a CEO says a company is profitable."

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