Wednesday, February 23, 2011

Demand Media: We’re Not THAT Dependent on Google

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An instructional guide on Demand Media’s eHow.com
A big question mark around Demand Media, one of the IPO darlings of last month, was its dependence on Google for traffic and revenue for its websites such as how-to site eHow.com and humor hub Cracked.com.
In the company’s first earnings conference call as a public company, Demand Media talked about all the ways it isn’t so reliant on Google. The defense is important because of an attention getting manifesto Google recently issued that appeared to declare war on so-called “content farms” that churn out Web results gamed to show up prominently in search results.
“Google makes hundreds of changes to its algorithm every year,” said Demand Media CEO Richard Rosenblatt, and yet he said the company’s traffic continues to grow. (In January, Demand Media websites such as eHow and LiveStrong.com drew 75.5 million unique visitors, according to comScore, making it the 13th-most-popular Web property in the country.)
Rosenblatt also told analysts that Demand Media embraced Google’s efforts to take out “duplicate spammy content,” and the company follows Google guidelines to the letter. “We consider ourselves very white hat,” he said.
As Peter Kafka pointed out at AllThingsD, Demand Media posted an actual, honest-to-goodness-by-U.S.-accounting-standards profit in the fourth quarter — a milestone the company has found it hard to reach until now.
But even while it said Google is a good friend, Demand Media also said its future isn’t tied totally to the search giant. Rosenblatt told investors that more than 80 million unique visitors came back to its flagship website, eHow.com, more than once in a recent month. Rosenblatt said the stat is a sign people find eHow helpful and useful, and they’re not just landing onto the website because of search laziness.
He also said in December, more than 100,000 different eHow articles were shared on Facebook, an important way people learn about news stories and information. And Rosenblatt said the rate of people typing “eHow.com” directly into their Web browser is far outpacing the rate of growth from search visits — all signs that Demand Media needs to drink less from Google’s traffic trough.
According to Demand Media’s IPO documents, about 41% of its websites’ page views in the third quarter of 2010 came directly from referrals from search engines, the majority of which were Google. Demand Media also said it generated 28% of its revenue from “various advertising arrangements” with Google for the nine months ended Sept. 30.
In the earnigns call, Rosenblatt also talked up efforts to generate advertising on its own, and said the company had signed up big marketers including Wal-Mart and Charles Schwab.
Rosenblatt also used his podium to strike back at critics of Demand Media, who say the company is a cynical attempt to capitalize on search results by churning out thousands of pieces of crummy Web stories and video, for which it pays freelancers just pennies a word. Rosenblatt said he hasn’t been able to take on criticisms because of “quiet period” restrictions surrounding the IPO.
Rosenblatt said the niche articles eHow writes about – How to Log In as Guest on Rosetta Stone, for example — may not be everyone’s cup of tea, but people want and need this information.
As an example, Rosenblatt said the company found more than 100,000 people did Web searches last month for how to make flying paper lanterns. Rosenblatt said Demand Media picked up on the trend, wrote up pieces to answer those queries, and served up answers to nearly 20,000 of those paper-lantern fans.
(Searching Google for “making flying paper lanterns,” two eerily similar results on eHow show up as the first two links: How to Make Flying Paper Lanterns, and How to Build a Flying Lantern. Judge for yourself whether these posts are helpful.

Regards,

Pallavi Sakhare MBA [ HR ]

AeroSoft Corp

E mail : Pallavi@AeroSoftcorp.in

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