Demand Media, a content mill

Via The Browser, this was an excellent article on one of the companies which manufactures superficial web content to draw interest from Google searches.  Three bits:

On Jan. 25, Demand Media sold 8.9 million shares at $17 each in an initial public offering. The following day, the price rose 35 percent to $22.61, which would give the company a market capitalization of $1.9 billion, greater than New York Times Co.'s (NYT) value of $1.5 billion.


Many analysts now say the best way to gauge a Web company's financial hardiness is to look not at page views or monthly unique visitors but at how much money it can generate from each user. Matthew Shanahan, senior vice-president of strategy for Web consulting firm Scout Analytics, says thriving digital ventures typically have a high ARPU (average revenue per user). (AMZN), for instance, makes on average $189 per unique user. Google (GOOG) takes in around $24. Web publishers, Shanahan says, tend to become reliably profitable at about $10 a user. Demand's average revenue per user currently hovers around $1.60.


Last year, Demand Media executives told Wired magazine that the mechanized assignments generate 4.9 times more revenue than ideas generated by humans.

The company employs 13,000 freelancers.


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