initial public offerings (IPOs) trading on American exchanges

Sunday, September 18, 2011

Demand Media (DMD) looks like a buy

  • Demand Media (DMD) changed its name to Leaf Group (LEAF) in 2016.

Demand Media, Inc. (Demand Media), incorporated on March 23, 2006, is focused on an Internet-based model for the professional creation of content at scale. The Company’s business is comprised of two service offerings: Content & Media and Registrar. Demand Media’s Content & Media service offering includes, Content creation studio that identifies, creates and distributes online text articles and videos, utilizing its algorithms, editorial processes and community of freelance content creators; Enterprise-class social media applications that enable Websites to offer features, such as user profiles, comments, forums, reviews, blogs and photo and video sharing, and a system of monetization tools that are designed to match targeted advertisements with content in a manner that optimizes advertising revenue and end user experience. The Company’s Registrar, with over 10 million Internet domain names under management, is a wholesale registrar. As a wholesaler, it provides domain name registration services and offer value-added services to over 7,000 active resellers, including small businesses, large e-commerce Websites, Internet service providers and Web-hosting. In March 2011, the Company acquired CoveritLive. In August 2011, the Company acquired RSS Graffiti. In August 2011, the Company acquired IndieClick.
As of June 30, 2010, Demand Media’s content studio had over 10,000 freelance content creators, who generated a daily average of over 5,700 text articles and videos. The Company generates substantially all of its revenue through the sale of advertising in its Content & Media service offering and through domain name registrations in its Registrar service offering.

Content & Media Metrics
The Company defines page views as the total number of Web pages viewed across its owned and operated Websites and/or its network of customer Websites, including Web pages viewed by consumers on its customers' Websites using its social media tools. Page views are primarily tracked through internal systems, such as its Omniture Web analytics tool, contain estimates for its customer Websites using its social media tools and may use data compiled from certain customer Websites. Demand Media periodically reviews and refines its methodology for monitoring, gathering, and counting page views. The Company defines RPM as Content & Media revenue per one thousand page views.

Registrar Metrics
The Company defines a domain as an individual domain name paid for by a third-party customer where the domain name is managed through its Registrar service offering. This metric does not include any of the Company's owned and operated Websites. Demand Media calculates average revenue per domain by dividing Registrar revenues for a period by the average number of domains registered in that period. The average number of domains is the simple average of the number of domains at the beginning and end of the period. Average revenue per domain for partial year periods is annualized.
The Company competes with AOL, Yahoo!, Jive Software, KickApps, Google, GoDaddy, Tucows and Melbourne IT.

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