Wall Street Welcomes the Content Farm: Demand Media Supersizes Its IPO

Demand Media has given skeptics plenty to chew on over the last six months: Accounting issues to hash out with the Feds; weird noises from Google, which it depends on; and debates about what “profitable” means.

And lots of investors don’t care. I’d heard Demand’s public offering, led by Goldman Sachs and Morgan Stanley, was oversubscribed, and yesterday the company confirmed it: Demand said it had increased the size and price of the deal, selling 8.9 million shares at $17, instead of its initial plan to sell 7.5 million at $14 to $16.

That gives Richard Rosenblatt’s company a value, for the moment, of just under $1.5 billion–about the same as the New York Times.

Now everyone else gets to vote, when the shares list today, trading on the New York Stock Exchange under the DMD ticker.

It will be tempting to overestimate the meaning of the stock’s first-day movement (or in subsequent days, for that matter), so I’ll try hard not to. But we can at least agree that this the first big-name Web company to go public in a very, very long time.

So even if Demand’s business didn’t have anything to do with the media business, it would get plenty of scrutiny.

And, of course, Demand is in the media business, using a model that terrifies lots of people in the media business. It produces lots and lots of Google-ready content at very low prices, with the help of computer taskmasters and an army of freelancers.

Lucky for me! None of them write news stories about media companies going public. So I’ll make the most of the opportunity and check back in later today.