Demand Media Finally Breaks Away for Good From Lance Armstrong
In the midst of last week’s earnings call, after the company had released strong results, Demand Media CEO and co-founder Richard Rosenblatt made an unusual declaration about its once-tight affiliation with now-disgraced professional racing cyclist Lance Armstrong.
Said Rosenblatt about the Santa Monica, Calif., social content company to Wall Street analysts about the status of the relationship in the wake of Armstrong being stripped of his many Tour de France titles:
“Our relationship is with the Livestrong Foundation, not with Lance, and we are aligned in empowering people to live healthier lives, and we support the important work of the foundation. We have built a powerful destination, popular applications and a very engaged community. None of this has changed and we have seen no material impact on the consumer traffic or metrics.”
In reality, the once-close relationship between Demand and Armstrong ended a while ago, even though the athlete’s cancer-fighting charity has been a high-profile shareholder since early 2008. At the time, Demand struck a four-year exclusive deal with Livestrong to create a health and wellness site, and also got a perpetual license to the Livestrong.com domain name.
But Armstrong — despite appearing at the Web 2.0 conference in 2008 with Rosenblatt — eventually had little to do with the Demand brand.
And it is down to zero involvement now, after he recently stepped down as chairman of Livestrong, due to the doping controversy. That mess has caused a lot of the brands he was tied up with, such as Nike, to disassociate themselves from Armstrong himself, although not from the Livestrong Foundation.
That has also been Demand’s direction, especially given that the commercial Web site, which has become the No. 3 health property in the U.S., is one of the company’s strongest ones. That adds up to about 26 million monthly unique visitors, a gain of 97 percent since last year.
But with that success, why did Demand make the statement at earnings — as well as putting up a blog post recently clarifying that it had “no direct relationship” with Armstrong?
Apparently, according to several sources, Demand had to move to be as explicit has possible, not because of consumers, but because of advertisers.
“The advertisers did care about the affiliation,” said one source. “So it was time to say in no uncertain terms to them and shareholders that Lance Armstrong has nothing to do with Demand.”
Or, as the blog post in late October noted rather strongly:
“We don’t believe the struggles of one individual should detract from the millions of real people who have benefited from work that’s been done to prevent cancer and improve the lives of those unfortunate enough to have it.”
Or, as they say in bike racing, Armstrong had simply become too much of a wheel sucker.