Demand Media Files For IPO

Ending the week on a bold note, Demand Media on Friday filed for an initial public offering. In a regulatory filing, however, Demand did not list a price range or a timetable for the IPO.

"We aim to grow our online audience reach and build passionate, online user communities," Demand said in the regulatory filing. "We intend to specifically target high-value vertical market segments, expand partnerships with brands and leading publishers and increase the scope of our relationships with our current Registrar customers."

In addition, Santa Monica, Calif.-based Demand said it plans to grow internationally and "increase monetization opportunities by improving ad-serving algorithms, growing our advertising base and expanding our direct sales force."

While averse to the term, Demand Media is often lumped in with other "content farms," which automatically assign "stories" to freelancers based on user interest and their search engine optimization potential.

In an effort to increase page views on the cheap, mainstream publishers are increasingly licensing Demand's content to pad their online offerings. The Houston Chronicle's Chron.com and San Francisco Chronicle's SFGate.com -- both owned by Hearst Co. -- just recently began adding Demand content to their sites, while Gannett Co.'s USA Today recently employed Demand to power its "TravelTips" section.

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The practice is also officially big business: Yahoo in May agreed to buy top Demand Media rival Associated Content for a reported $90 million.

Earlier this week, Demand debuted a Content Channels revenue-sharing service that places content on participating publisher sites. Under the terms of the partnerships, Demand Media plans to underwrite the cost to create and serve the content, and manage the ad programs associated with the implementation of the program. Publisher partners, meanwhile, will be responsible for selling display advertising for the Content Channels-powered sections of their sites.

For the first half of the year, Demand reported $114 million in revenue, along with a net loss of $6 million, and adjusted operating income before depreciation and amortization of $26 million.

The SEC filing also reveals that Demand's revenues last were $114 million, with losses of $22 million.

Along with syndicating content, Demand also owns several sites, including eHow, Cracked.com, and Livestrong.com.

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