Peter Kafka

Recent Posts by Peter Kafka

Google Attacks! And Demand Media Investors Yawn

Google is going to crush Demand Media!

So why aren’t investors running for the exits?

True, Demand shares are down by about 4 percent this morning, about 12 hours after Google announced-without-announcing it was overhauling its search algorithm to punish mass content-makers like Demand*.

So if you’re looking at a one-day chart, that looks like an awfully steep drop.

But pull back, and you’ll notice that Demand is still trading at the same range it has been at since it went public last month.

So perhaps investors have thought about Demand’s exposure to Google for some time, believe in CEO Richard Rosenblatt’s argument — in short, he says his company and Google are symbiotic, and working on the same page — and don’t think anything’s changed. Or maybe they’re delusional.

Either way Google’s news, and Demand’s response, have netted out to about a $100,000 drop in market cap. If that’s the full extent of this back-and-forth, we can all move on.

[UPDATE] Demand Media shares came bouncing all the way back, and were up 1.59 percent at the end of trading Friday.]

*Hey Google: What up with the nudging and winking here? For whatever reason, Google won’t say “content farms” or mention specific companies like Demand and Yahoo’s Associated Content when discussion their search changes. But all of the press outlets it pre-briefed on last night’s announcement seem quite sure that’s exactly what Google is talking about. So why not just say that directly, instead of via proxy?

Latest Video

View all videos »

Search »

Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work