Demand Media Says It's Getting Along Just Fine With Google, Thank You Very Much
So the first wave of investors has taken a look at Demand Media, and they’re buying: The “content creation platform,” as the company likes to describe itself, closed at $22.65 yesterday, up 33 percent on its first day of trading.
Again, be wary of reading too much into any stock’s performance on any given day. But it seems safe to draw at least one conclusion: Investors aren’t freaked out about Demand’s symbiosis with/dependence on Google. Even after a puzzling blog post from the search giant last week.
The post, written by Google engineer Matt Cutts, defended the search engine’s performance against a chorus of criticism. But it acknowledged that Google was paying attention to complaints about “content farms and sites that consist primarily of spammy or low-quality content” clogging its search results.
Lots of people logically assumed that Google/Cutts was talking about Demand, although the post never mentioned the company by name. And if Google, which supplies 28 percent of Demand’s revenue and a big slug of its traffic, has a problem with Demand…
But Demand CEO Richard Rosenblatt insists that Cutts wasn’t talking about his company at all. In fact, he says, Demand and Google are getting along just great, in a relationship that pays out real dividends for both parties. It looks like investors believe him.
I chatted with Rosenblatt about the Google post, and the companies’ relationship, yesterday at Demand’s New York outpost. Here’s an excerpt from our conversation:
Peter Kafka: Do you think that Google post was directed at you in any way?
Richard Rosenblatt: It’s not directed at us in any way.
Did you talk to them about that?
I can’t comment on that.
Okay. But they wrote this post, which talks about content farms, and even though you say they weren’t talking about you, it left a lot of people scratching their heads.
Let’s just say that we know what they’re trying to do. Last year, they put out three major changes. They put out Mayday–that was going specifically after spammers and low-quality content. Our traffic increased when they did that. The reason why is our content is being scraped and stolen, [because we’re] the largest content producer. So they’re looking for original, non-duplicated, human-made content. That’s all our content. So if they were targeting us, you’d also see Wikipedia, About.com, Wikihow, every person that makes more than a few dozen articles….Our traffic went up.
Second one: They did something called Caffeine, to increase the [search] index. Our traffic went up.
They then did Google Instant. Our traffic went up.
So the three things [Cutts] talks about in his blog post did not adversely affect us. You can draw your own conclusions.
The post talks about going after spammers and content farms. But when you guys think of content farms, you don’t think that means Demand, right? You’re thinking of people who take my copy or your copy, and cut and paste it, and tweak it enough to fool Google.
He’s talking about duplicate, non-original content. Every single piece of ours is original. Written by somebody. And I understand how that could confuse some people, because of that stupid “content farm” label, which we got tagged with. I don’t know who ever invented it, and who tagged us with it, but that’s not us…We keep getting tagged with “content farm”. [Ahem.] It’s just insulting to our writers. We don’t want our writers to feel like they’re part of a “content farm.”
So can you sum up your relationship with Google today?
This is why our partnership with Google makes sense. 1) We help them fill the gaps in their index, where they don’t have quality content. 2) We’re the largest supplier of all video to YouTube, over two billion views and 3) we’re a large AdSense partner. So our relationship is synergistic, and it’s a great partnership. And it’s a partnership that we’re excited to continue to expand.