Demand Media's IPO ambitions

CEO Richard Rosenblatt on his new media's financing future, and his Godly goals

Entrepreneur interview by Bambi Francisco Roizen
October 28, 2009 | Comments (2)
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When you listen to Richard Rosenblatt, CEO and co-founder of Demand Media, explain his company's mission, it has a sort of Google-esque ring to it. Google's missions is simple: to organize the world's information.

"We want to publish the world's content," said Richard, in a recent interview with me, at the Web 2.0 conference.

If search is the primary online conduit to finding knowledge, then Demand wants to be the deliverer of that information and the beneficiary of all those clicks from billions of people seeking answers. So far, so good. Since launching in 2006, Demand has grown to publishing 4,000 pieces of bite-sized nuggets of daily content - pumped out with scientific precision - that now attracts 80 million unique visitors monthly to its vast network of sites. 

Demand Media is a social media company, consisting of a number of niche sites, such as Livestrong and eHow, a vast library of domain names via eNom, and a social media toolkit through Pluck that powers large organizations, such as USA Today, Conde Nast and Whole Foods.

With a growing audience base, and a profitable business off of annual revenues of some $200 million, Demand appears to have many options before itself for future financing and an eventual exit. And, whatever it is - IPO or M&A - it'll have to be a significant one. Demand has raised more than $355 million from top-tier investors, including Oak Investment Partners, Spectrum Equity Investors and Goldman Sachs. Its valuation after raising its last round was $1 billion.

To that end, Demand has to do something grand. It could wait until a large media company offers several billions for the young company. This summer, it was rumored  that Yahoo was interested in buying Demand, but at a price that wasn't worth selling for. Or, it could be that Demand partners with one of its competitors - Mahalo,, etc. - to get even bigger and go public. With Shawn Colo as Demand's co-founder, partnering or acquiring companies to get big is one of Demand's fortes.

Or, Demand could stay the course and go public.

It's clear which one Richard has his eye on. 

Are there ambitions to go public? What do you gain from that? I asked. 

"We want to build a sustainable business," said Richard. "We believe we’re the size that we can go public and it’s something we want to do."

Richard's background consists of at least two exit wins - selling iMall to ExciteAtHome and more famously selling MySpace to Rupert Murdoch's News Corp. Both sales were more than half a billion. There's no doubt that when this guy sets his mind on something, he's going to pursue it relentlessly. 

And, maybe by 2010, when the markets are ripe and media property options for investors continue to disappear, perhaps there'll be appetite for a new media company IPO, with a grand mission to "publish the world's content." Google went public with a similar simple yet bold and grand vision to organize the world's content. Look what it did for investors. 

Wait a second, is Demand Media trying to usurp Google as God?

(Watch the interview and listen to Richard explain Demand's business model and hints at future announcements. The next segment of this interview will be on partnerships and which media partners make sense for Demand to partner with. First segment is: Demand Media's scientific approach to news)

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Demand Media
Description: Demand Media is building a different type of new media company. With a proprietary media platform that powers the company's highly-traffi...
Richard Rosenblatt
Chairman and CEO,
Demand Media

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John Doyle
John Doyle, on October 28, 2009

Excellent interview Bambi. I'm not sure what he meant by "Have you read the rumors about our revenue? They're saying $100 million." That response was slighly bizarre and elusive. The problem that these guys will have with an IPO is that they will be compared to Internet Brands, whether it is fair or not. Hollywood is not the only place that people use comparison...Internet Brands meets You Tube with a dash of Myspace. That description may not go over well with institutional investors.


John Doyle

Bambi Francisco Roizen, on October 28, 2009

He was referring to the $200 million in revenue that many publications have written about. That's an interesting description of Demand, btw.

Danny McGowan
Danny McGowan, on October 29, 2009

the mobile stategy? i understand it requires the creation of mobile location based services for user engagement, user attention and retention. seems the best place to stategize, position and leverage long tail bite size premium content.

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