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.
[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?