• December 27, 2010

Demand Media's IPO plans are going ahead, but the timing is stalled by the SEC's concerns about the company's accounting practices, reports CNET. The probe will examine whether Demand, which runs on a large network of freelancers, will be profitable given its current revenue projections. Demand Media amortizes the expenses of paying its freelance writers, distributing the cost over five years. The major issue is whether Demand is -- or will be -- profitable given its current costs and revenue projections. Henry Blodget of Business Insider is critical of Demand's practices, saying it should "drop the bogus accounting" because reporting costs over a distributed span of time can make individual years' profits look deceptively higher.