Here, in keeping with the Ten Things tradition of sharing more than 10 things, are 11 things about Rosenblatt:

What qualities do you like in a person?
I admire people who are curious, innovative, respectful to everyone and eternally optimistic. I firmly believe that the best days are in front of us and we must always try new things while learning from others, in order to continually grow as people.

What qualities do you dislike?
People who are constantly negative rather than being constructive, or those who are jealous of another’s success. Being positive is a state of mind and all about how you perceive a situation — is it a permanent fall or a chance to learn and get back up? I’m also disillusioned by how negatively people react to another’s success when it’s not a zero sum game.

What’s the single most important issue in the world today?
Education. No question. Whether it’s formal or informal. There is unlimited knowledge available via the Internet, and we need to find an effective way to spread this knowledge globally to people who can benefit from it.

Do you still buy CDs or rent DVDs?
No, I download all media on my iPad or stream it through services such as Spotify or Netflix.

What would you be doing if you were not in your current job?
I’d be looking for the next opportunity to innovate in the online media landscape and increase my lecturing opportunities at UCLA and USC.

What is your greatest achievement to date?
Raising three respectful kids who are curious, innovative and optimistic.

iPhone, Android or BlackBerry?
All iPhone all the time.

What site/app do you check first when you wake up?
Twitter to get some news and tweet some info. Then eHow.com, Livestrong.com and Cracked.com to see what’s new and exciting on our properties. And then I’m tweeting again.

What was the last thing you fixed?
Boy, that’s a tough one. I’d say (and my wife would punctuate the point) that “handiness” is not one of my strengths. But, I inflated a flat tire on my son’s bike last weekend, and, as of now, it’s holding air.

If you could have any superpower, what would you choose?
Freeze time, so we would all have more time in the day!

Name your favorite guilty pleasure.
Wine, paddle tennis and pizza (without cheese). The perfect day would be enjoying all three at once!

Earlier today, Demand Media turned a Q1 performance that beat expectations and also raised its outlook for the year ahead.

Revenue was $82.9 million, up 9 percent, compared to an estimate of $79.6 million. Earnings per share, adjusted for one-time costs, were seven cents, above the expected five cents.

You can read it all here in these lovely Demand slides:

Demand_Media_Q1 Supplemental Data FINAL

Not bad, given many investors have been down on Demand, for a variety of reasons, mostly centered on traffic pressure due to search algorithm changes on the all-important Google. The low stock price resulted in a deal, in which Demand recently almost went private.

So what does CEO Richard Rosenblatt have to say for himself about all this? Here’s a liveblog of the conference call with Wall Street analysts, taking place at 2 pm PT.

Earlier:

2:05 pm: The call started a little late, but Rosenblatt was quick at it, noting the news was a lot better than was thought.

Always a jaunty dude, he was jauntier than usual, if possible, throwing in a lot of terms like “growth,” “momentum” and “Those fiddling geeks from Google did not kill us, after all!” Okay, not the last one.

It was a strong performance, indeed, which is a cause for happiness, I suppose, and especially since Demand’s stock has been in the doldrums since it went public earlier this year.

Not Groupon bad, but that’s a moon crater.

“It was a strong performance,” said Rosenblatt. He gets to say that.

More on the specifics, which showed growth in pages views, engagement and such things on its flagship sites, such as Cracked and LiveStrong. Its juggernaut, eHow, is still recovering from the Google search changes, in an effort deceptively called Panda.

This was not a cuddly panda, but Panda Gone Wild.

2:18 pm: The CFO guy who just repeats the numbers in the press release. (This is the part where I go to the bathroom.)

2:28 pm: Back! Sorry I took so long, but I was getting a computer science degree. (You knew that Yahoo joke was coming!)

The CFO is still chitchatting, still positive about the year ahead and saying “growth” a lot.

2:30 pm: Time for Q&A!

The first is about the mobile arena and monetization there.

Important, but no one is anywhere on this, due to the fact that it does not monetize very well at this point in time.

Everyone has a smartphone now, but the advertising part of it is still a wee baby.

“The monetization will come later,” said Rosenblatt, pointing out the obvious, although he did note that Demand was focusing in it.

Whee! Get on it, Chief of Revenue Joanne Bradford (I know you work hard, but work harder)!

Now to video. More monetizable, obviously, and Demand has a lot of videos to offer, being one of the bigger content providers to YouTube.

I am now officially tired of this question. Next!

2:35 pm: Ooh, a future and direction question about eHow.

“How should we think about its utility in the world?,” asks the analyst.

You should think about it as a place to learn to boil an egg, which is what Rosenblatt mentions. Who doesn’t want to know how to boil an egg? And who doesn’t forget how long to do it, resulting in rubber balls or drippy messes?

These are the great queries of our day, people!

The next question is about “bullish” YouTube upfront last week, in which Google pretended to go Hollywood.

Google will never go Hollywood, by the way, since it requires charm and glamour.

Demand was not there, but it is all up on the YouTube channel thing.

And, why not, since Google is giving away dough to become Hollywood. (Not … gonna … happen … ever, but take the money, all you celebs!)

2:40 pm: Next question is about mobile, again. Quantify that, and when is it going to be big?

No one can say yet, but why not ask!

Still, Rosenblatt makes a college try (I wonder if he has a CS degree?), noting it is “happening fast.”

Another question on YouTube channels and then on registar business.

Rosenblatt and Google are apparently going to see if they can make a go of this thing! Like kids putting on a show in the barn! Let’s see if we can make something of this dang talented group of kids!

The questions never end. Wait, the analyst asks about All Things Digital and my story on their private equity deal!

I can check another one off my bucket list: Being mentioned on a Demand Media earnings call!

Rosenblatt cannot say much, but notes, “We have a duty as a public company to look at anything that comes across.”

Which means it’s true, though he might have taken a moment to compliment my scooptastic skills.

Sigh.

2:51 pm: I am bereft by the slight, but shall recover.

And now it is over, so it is back to boiling my egg.

According to sources close to the situation, Demand Media was deep into discussions with a private equity firm to complete a deal that would have taken the online content company private, nearing a price that was double its current value.

But Demand abandoned the effort this past week — which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners to purchase the company for a price of up to $1.2 billion. That was due to a number of challenges, including complications related to its financing and the ability to retain executives in its aftermath.

The move on Demand by private investors is perhaps no surprise, and is part of a wider trend related to some Internet companies whose stocks have a depressed value relative to the worth of their assets.

Among companies having been and also being evaluated by private equity firms, whose business it is to turned the undervalued into a goldmine: Yahoo and AOL.

And also Demand, which is now worth only $605 million, a market cap that is off 65 percent since it went public in February 2011. Shares now trade at $7.25 each.

That depressed share price has been due to a number of issues, most especially changes to Google’s search algorithm to improve results. Called Panda, the changes at the search giant — a critical partner of Demand’s — has cut traffic to its major content sites and also called into question its ability to monetize its scaled editorial efforts.

Such a situation is nearly irresistible to PE firms — in this case, Lee, which approached Demand.

Several sources said that the board threw out a hefty number that it assumed would shut down any interest and the pair began talking with an initial offer to take the company private at $11.28 a share.

That equals close to $1 billion for Demand, which also has more than $100 million in cash. But sources said Lee and Demand also discussed the addition of a large loan as part of the ongoing discussions, for possible acquisitions related to a content roll-up strategy it had, which would bring the total up to $1.2 billion.

One source underscored that the board of the Santa Monica, Calif., company had no interest or intention to sell the business, but that the premium was large enough that it engaged.

The deal from Lee, which also included a strategy of splitting up the content arm from Demand’s lucrative domain-registar business.

There were also large cash-out provisions for major shareholders, as well as for CEO and co-founder Richard Rosenblatt.

Thus, the two sides engaged intensely in the last several weeks in crafting an agreement, although the devil would prove to be in the details.

One big issue is that taking Demand private was still a big financial commitment for Lee — which tried to engage some of its limited partners in the transaction — as well as other investors, including Silicon Valley’s Marc Andreessen.

That proved harder than Lee thought, said sources, with some balking at the firm’s ability to make a big enough score on the possible turnaround.

“It was hoped it would be a Skype situation, but there were worries,” said one source, referring to the blockbuster sale of the Internet telephony company by private investors to Microsoft for $8.5 billion last year. That deal was widely considered a PE home run, given the excessive premium paid for it.

Demand’s challenges increasingly worried the firm as it moved forward, sources said, causing it to reevaluate its earlier bid several times.

Also a worry: Retaining major talent, including Rosenblatt and others, after they sold large chunks of their equity.

After Lee asked for more time to complete the financing, Demand ended the talks last week.

Another source, as is typical in these endings, said it was the Lee that walked away (who knows and, really, who cares — both sides were engaged seriously).

One thing was true: “Demand was definitely at the altar, but it did not get to the vows,” said one source.

Another source noted that the board also determined that Demand’s situation was improving, and that new trends are showing that the bottom might be been reached. The company reports its first-quarter earnings on May 8, which is expected to show some traction related to its many challenges.

“There is nothing Lee could do that Demand could not do for itself,” said one person. “So throwing in the towel seemed premature for now.”

Lee declined to comment, as did Demand.

Here are the actual 10 patents that Facebook is using in its just-filed counter-claim against Yahoo’s patent infringement lawsuit.

Several are held by Facebook CEO and co-founder Mark Zuckerberg, as well as other employees of the social networking giant, in areas such as personalized news feeds, tagging digital media and headline posting algorithms.

The patent ball, as irritating lawyers say, is in Yahoo’s court.

Enjoy:

Exhibit A – US7827208

Exhibit B – US7945653

Exhibit C – US6288717

Exhibit D – US6216133

Exhibit E – US6411949

Exhibit F – US6236978

Exhibit G – US7603331

Exhibit H – US8103611

Exhibit I – US8005896

Exhibit J- US8150913

Prabhakar Raghavan, the well-respected head of Yahoo’s Labs unit and also recently its head of strategy, is leaving the company to take a job at Google.

The departure comes ahead of what will be very deep cuts in his division, which is in charge of long-term research at the Silicon Valley Internet giant, said sources, and is spread all over the country. More researchers at Yahoo — which is a very well-respected group — are also expected to go too and will be the subject of fervent recruiting interest by companies such as Google and Facebook.

Yahoo confirmed the move after I made an inquiry about it this morning.

In a statement, the company said:

“Yahoo! thanks Prabhakar Raghavan for his dedication and contributions to Yahoo! for the past 7 years. We wish him well in his next endeavor. Ash Munshi, CTO, will assume leadership for Y! Labs.”

It is unclear what Raghavan’s new role at Google is.

But, as head of Yahoo Labs, Raghavan’s research arena has been extensive, encompassing everything from data mining to algorithms to search.

He is also a consulting professor of computer science at Stanford University. According to his bio, Raghavan has “co-authored two textbooks, on randomized algorithms and on information retrieval.”

The Berkeley PhD had been CTO at Verity and had held a number of jobs at IBM Research.

More to the point, he was very well respected within the company, which seems to be curtailing its commitment to research as it attempts to turn itself around under the new leadership of CEO Scott Thompson.

Raghavan had been made head of strategy under former CEO Carol Bartz, who was fired.

He has been at Yahoo seven years.

A little more than a week ago, Morgan Stanley kneecapped Demand Media’s stock by downgrading the Santa Monica, Calif., online content company’s prospects.

Some worries: Pressure from algorithm-tweaking Google, upon which Demand relies heavily for traffic; worrisome drops in said traffic due to said tweaking; and not enough uptake on higher-quality, premium stories the company had promised in the fall.

Demand shares fell 6.5 percent that day, to close at $5.93.

It has recovered a bit to $6.13 today, but is still off almost 8 percent since the beginning of the year, and 71 percent from a year ago.

One irony to the tough call by Scott Devitt, of course, was that Morgan Stanley was the investment bank that had taken Demand public in January of 2011, at $17 a share.

In addition, the recent departure of three of the company’s six founders has also worried investors.

All this will presumably be on display today when Demand reports its fourth-quarter earnings. Wall Street analysts are expecting Demand to earn seven cents a share on an adjusted basis on an expected $81.95 million in revenue.

We’ll see after the market closes, as well as what its execs have to say about the key metrics of costs and traffic.

“Advertising is based on one thing: Happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams with reassurance that whatever you’re doing … It’s okay. You are okay.”

Don Draper, “Mad Men,” Season 1, “Smoke Gets In Your Eyes”

I wonder what Don Draper would think today when the 23-year-old digital media buying whiz quips back, “Maybe, but let’s load it up into the system, along with 5,000 other versions of copy, and measure how many Facebook ‘Likes’ it drives within our target demo.”

I love the “Mad Men” version of the ad business. The storytelling. The simplicity. The glasses of scotch at 10 am. But these days in digital, it feels like the Math Men media buyers (with their terabytes of data) are taking over for the Mad Men creatives. It may not make for great TV drama, but they’ve got the performance data to prove that it’s their turn in the driver’s seat.

For years, digital ads were bought and sold by young media buyers from ad agencies and smooth salesmen from online publishers and networks, sealed over the modern version of the “three-martini lunch.” But with the steady advancement in online advertising technology over the last ten years, the geeks — I mean the Math Men — have gained the upper hand in determining how to spend these digital marketing dollars. Today, ad buying and selling is automated across nearly every digital channel, driven by complex algorithms crunching terabytes of data, all employed to meet rigorous ROI objectives — typically measured by new customer acquisition, profit margin, or revenues.

It all started in search, where Overture introduced (and Google perfected) a keyword ad marketplace for search pages. We take that marketer proposition for granted now, but it was heretical at the time — only pay us when a user clicks on your ad (versus every time we show your ad), and you decide how much to pay for that click (versus the same price for every advertiser). And sophisticated marketers took full advantage by leveraging technology platforms from Math Men companies like Efficient Frontier to maximize the efficiency of their search ad spend across millions of keywords, bids and text ad copy.

Since then, several major advances in advertising technology have further enabled the Math Men:

• Six years ago, Right Media introduced the first ad exchange for display ads, enabling the Math Men and their algorithms to buy and sell banner ads and skyscrapers across the Web. Google subsequently perfected the display exchange via their DoubleClick acquisition as well.
• Three years ago, Blue Kai introduced the first ad targeting-data marketplace, enabling the Math Men to leverage anonymous audience targeting data to further enhance marketers’ campaign performance.
• A year ago, Facebook launched its own ad platform API to enable Math Men and their algorithms to bid for Facebook ads based on user attributes. It seems likely that Facebook will eventually extend its monetization platform to third-party publishers, similar to what Google did with AdSense, as Facebook already has a strong distribution foothold via Facebook Connect.

It feels like we are witnessing the tipping point in digital media buying. Measured by dollars or by impressions, greater than 50 percent of online advertising is bought via APIs today (granted, most of this is still search). In a few years, I believe that 90 percent of all digital ad impressions, and more than 75 percent of digital ad dollars, will be bought and sold programmatically.

As we witnessed with search marketing, once a) marketers get a taste of the increased spend efficiency offered by these emerging platforms, and b) these platforms (and the associated marketer tools) become sufficiently easy to use, the dollars will flow, and quickly. The Math Men at Efficient Frontier are leveraging these display, data and social platforms to deliver superior ad spend performance for marketers across all digital channels today. It’s no longer just about search.

And the Mad Men are taking note. In the last few years, the ad agency holding companies have rolled out their own technology-driven digital ad “trading desks” to help their clients take advantage of these ad trading platforms. I wonder if they’ve replaced the scotch in the mini bars with the Math Men’s drink of choice, Red Bull.

Chris Moore is a partner with Redpoint Ventures and has been enabling the digital Math Men with investments in Efficient Frontier, Right Media, Blue Kai, Auditude, Inadco, Extole, Intent Media and eBureau. Follow him on Twitter @Redpointvc and @Moorski.

Two of the more interesting online media properties are apparently joining up for a year-end online idea festival.

The AOL-owned Huffington Post, and TED, the massive conference organization and online site dedicated to its offerings, will jointly feature 18 of the best onstage speeches from TED’s excellent year-round global events.

The idea-thon will be called “Best of TED 2011: A Countdown of 18 Groundbreaking Ideas to Reshape the World in 2012.” A post on the Huffington Post site noted that it will feature the popular TEDTalks and combine them with “new blog posts written by the people who delivered them, examining how their ideas were impacted by being shared with a global audience.”

Out of a total of 300 possible choices, the number of speeches has been narrowed down to 18, because TEDTalks are limited to no more than 18 minutes. The talks range over a wide array of topic areas, including science, art, music, tech and more.

In an interview today, HuffPost majordomo Arianna Huffington said that the aim was to spur thinking around big problems the world faces.

“We are trying to be people to rethink everything in a super engaging way,” she said. “That is what TED is famous for and we wanted to shed a lot of light on it.”

Here’s today’s, with game developer Kevin Slavin on “How Algorithms Shape Our World”:

The application, called Shopycat, makes product recommendations based on the items people have liked or talked about in their news feed.

It is not particularly flashy. The logo is a picture of a cat sticking its head out of a shopping bag. The tagline reads “the right gift every time.” But the app’s rudimentary design fits nicely with the experimental nature of social commerce. Retailers are just starting to figure out ways to leverage social networks. Wal-Mart is no exception.

Wal-Mart promises that while it looks simple, the technology running behind the scenes is more complex than you might imagine.

The product was built by @WalmartLabs, which was created after Wal-Mart acquired Kosmix, a Bay Area start-up that was tracking social networks to determine people’s interests.

Venky Harinarayan, founder of Kosmix and co-founder of @WalmartLabs, said developing the application was surprisingly difficult. First, they had to find the relevant information on a person’s Facebook page. Then, they had to find products that best matched those interests.

For example, if someone likes Lady Gaga, the most obvious product to recommend is her albums. But a fan would likely already own those. A better gift is something more special — a collector’s item or a limited edition. That’s a more complex problem.

Since gifting is a practice humans naturally struggle with, maybe algorithms can do a better job.

After using Shopycat, Harinarayan learned his wife was a fan of “Game of Thrones,” the TV series on HBO. She has posted several times on Facebook about the show, but he hadn’t noticed. “Facebook is so transient and things flow by. Here’s a way to aggregate it all and put it in one place,” he said.

The technology also sometimes fails. When Harinarayan viewed gift ideas for me, it recommended a number of Sony products. Months earlier, I liked Sony’s fan page in order to gather information for a story — not because of any deep admiration I had for the company’s products. An algorithm would have a hard time knowing that.

“I think it’s a good first pass,” Harinarayan admits. “But there’s areas we should get better at. Right now, it is our goal to give one good gift idea per person. If we do that, then we are successful.”

The application is available to Wal-Mart’s 10 million fans on Facebook if they give permission to install it.

Harinarayan said Shopycat is the mega-retailer’s first foray into using social and promises that more is coming soon, including social experiences in the store and on its Web site.

Just last week, it seemed as if the dangerous riptide had finally turned for Demand Media, the social content company whose stock for the quarter bottomed out in mid-October, in the $5-a-share range.

It has now rebounded to close Friday at $7.76, with a market valuation of just over $651 million — still a far cry from a high of over $27 a share in the last year, but well below the target price of upward of $14 from Wall Street analysts.

That’s why there will be plenty of questions for CEO Richard Rosenblatt in a conference call scheduled for after the Santa Monica, Calif.-based Demand reports its third-quarter earnings, following the close of markets this afternoon.

Analysts are expecting Demand to lose four to six cents a share. Revenue is expected to be up.

One issue sure to be on the docket will be the traffic problems at its flagship eHow site, which stymied Demand in the quarter. The situation caused it to release a statement about the issue, “which the Company believes is temporary and was the result of an internal technical issue. The technical issue has recently been remediated.”

Assume you will hear more on that and other topics, including updates on the cost of its content and the continued impact on Demand of search-algorithm changes at Google, as well as how it is faring in attracting more lucrative advertising.

I will be covering the earnings and the analyst call, so tune in later today for answers.

I have called Yahoo the Hamlet of the Internet many times, for its seemingly endless ruminating on what it should do and what it should be.

And that is true on a lot of fronts — from its strategic direction to rejiggering its advertising business to finding solid leadership to whether or not it will sell itself and how to a variety of bidders.

It’s no small irony then that perhaps it’s only easy move right now and the one most likely to happen soon — and which could temporarily assuage its always restless shareholders — is to finally settle a long and arduous effort to sell its Japanese assets.

Sources close to the situation said that the deal — as has been reported — is the closest to a deal compared to any other that Yahoo is contemplating.

Sale or outside investment discussions remain mired, while similar share sale discussions with its Chinese partner, Alibaba Group, remain a constant roundelay of dashed deals.

It has not always been thus recently between Yahoo and Yahoo Japan. Just over a year ago, the company shifted its paid and algorithmic search from Yahoo to Google, raising tensions between the companies.

Now, though, Japan has become the easy one.

In actuality, striking an actual deal is not and has been a task is on that Yahoo has been working on for many years, trying to figure out the best tax-free way to shed its 35 percent stake.

It makes sense, since the asset is no longer a strategic plus it once was.

It also frees up a lot of cash. As of September 30th, according to Yahoo, the pre-tax value of its Yahoo Japan stake was worth $6.4 billion. Presumably, Yahoo would either use the money to bolster its business or, more likely, give its shareholders some kind of dividend.

In such a deal, Yahoo’s longtime Japanese partner — and one of its very first investors — SoftBank would buy out Yahoo’s stake.

That’s the simple way of putting a deal that only an accountant can grok. But one plus is that if Yahoo does pull it off, it would be rid the company of one complication too many.

That said, any Japanese asset sale could also be impossible without a larger settlement of Yahoo’s globally connected issues — or, as I like to call it, the hairball.

And SoftBank, which already owns a lot of Yahoo Japan would certainly need more than just cash — perhaps more of Alibaba than it already owns — to be enticed to buy even more.

Also, for all intents and purpose, SoftBank is the only buyer of Yahoo’s Japan asset, so there’s that issue.

But if it could show some progress in some part of its hopelessly complicated world, for Yahoo, that is always a good thing.

Ready, aim, fire — at Google at the Senate Judiciary Committee’s antitrust subcommittee hearing happening right now in Washington, D.C.

It is titled: “The Power of Google: Serving Consumers or Threatening Competition?”

Here we go:

11:04 am: As usual in D.C., the Senators on the committee get to pontificate first.

Oh, joy! (I used to live there and cover Congress stuff for the Washington Post from time to time and I am having bad déjà vu right now.)

A quick cut to Google Executive Chairman Eric Schmidt, who is appearing alone. He looks a little peaked, especially as the pols begin to describe the scary behemoth the search giant is.

And also that it is trying to force users to its other products.

Rut-roh.

11:07 am: Sen. Mike Lee, the Republican from Utah, who is a Google critic, is talking on about the search giant’s power, reading from his testimony in a dullish style.

I thought this dude was a Tea Party firebrand!

“The primary focus should be consumer welfare,” he says, blah, blah, blaaaaaaah.

11:09 am: Now, the subcommittee’s dour chairman, Sen. Herb Kohl from Wisconsin, is introing Schmidt, who is actually being introed by California Sen. Dianne Feinstein.

She is an Eric fan, obvi, praising his accomplishments at Google. But she also gives props to Jeffrey Katz, CEO of Nextag, who is testifying against Google later. Also, let her add, is the fabulous CEO of Yelp, Jeremy Stoppelman, another anti-Google speaker to come.

“I hope they tango rather than tangle,” says Feinstein inexplicably about those called to testify. Hey, white geeks can’t dance, although wrestling would also be hard for them too.

In any case, gotta love these everybody-loving pols!

11:14 am: Finally, Schmidt, who — of course — starts off invoking the last big tech giant who was here getting spanked by Congress.

Schmidt does not name Microsoft — classy, by which I mean not at all — but is referring to the software giant.

“We get it,” he says about the lessons Google has learned from Microsoft’s own antitrust troubles back in the day.

11:18 am: Schmidt is talking about Google and saying he welcomes the competition.

“Today it’s Google turn in the spotlight,” he says, still not uttering the word “Microsoft,” much as Microsoft execs have often not been able to say Google. “One company’s past [should] not be another company’s future.”

Now, the senators can have at him. Kohl is up first.

11:20 am: The first question is if Google is favoring its own products, via search.

Schmidt harkens back to what he calls early Google lore that it is just trying hard to get consumers stuff quicker.

The need for speed!

“Is really trusting Google to do the right thing sufficient?,” asks Kohl, who quotes former President Ronald Reagan’s famous line: “Trust but verify.”

That gives Schmidt the chance to talk about how quickly Google could lose out to competitors and then is onto how hard it is to do what Google does.

It takes extra-smart smartypants. Trust us, he says, as we are smartier!

11:24 am: Kohl comes back with a damning quote from Google’s famous Marissa Mayer, who apparently has said that the company favors its own products and why not?

Schmidt says he was not there when she allegedly said this, but that its own testing and intuition tells Google if consumers want a Google map or whatever tout de suite!

Kohl repeats the Mayer quote again: “We do all the work for the search page, so we put [a Google Maps link] in first.”

“I will let Marissa speak for herself,” says Schmidt, now too deep in the weeds of her verbal faux pas. Get out, Eric!

11:28 am: Sen. Lee is up, not taking any of this speedy, we-know-best business.

And he has a chart! I love a good chart. It shows Google info always ranks first in listings versus other sites it competes with.

Schmidt has not seen this poll, but thinks it is not accurate.

11:31 am: Let me note that Schmidt’s grey suit is fantastic looking. And right behind him, you can see Google’s top lawyer, the always nattily dressed David Drummond.

Back to the chart!

Lee wants to know why, according to his chart, that Google seems to come up first.

“Either way, you’ve cooked it,” claims Lee.

“Senator, I can assure you we have not cooked anything,” counters Schmidt.

(Note: Google does have an excellent cafeteria in Silicon Valley, complete with organic arugula and Kombucha for all.)

11:33 am: Hoo boy! But Lee’s time has expired, so Schmidt gets a break in the form of New York’s Sen. Charles Schumer.

I like the way he says “ee-no-vation” for innovation.

He does an expected plug for New York, of course. Somehow it is No. 1 in tech. Not so much, but brag on, Chuck!

11:38 am: Schumer is still talking about New York and its fab entrepreneurs.

Apparently, he has done a lot of jawboning with start-up dudes (likely over Kombucha) and they think Google is a positive force.

“Google is actually pretty good, we don’t see them as rapacious,” Schumer says the New York nerds tell him.

Is “rapacious” the criteria here?

Schumer is running out of time and has yet to ask a question and now is trying to get Schmidt to test Google’s broadband project in the Hudson Valley.

Now that’s rapacious!

Is there going to be an actual question here?

Yes: Oh please tell us, genius boy, what could Google do better?

Really.

11:42 am: Now, Sen. John Cornyn from Texas is on and asking about the prescription controversy Google was embroiled in recently.

Oops, I missed a bit when someone called me about the CEO mess at Hewlett-Packard I reported on earlier.

Onto Senator Amy Klobuchar from Minnesota. She is cleverly using an article about the Vikings football team to ask about how Google’s super-secret-sauce algorithm works and how it ranks results.

“Do you think companies should have a lot more certainty in how they are ranked?,” she asks.

11:51 am: Schmidt is not really answering, except to say Google is not perfect.

“We don’t know how to do it with more certainty,” he says, which is odd for a company that is perhaps the most irksomely certain group of geeks ever assembled on the planet.

Klobuchar moves to copyright issues. “There’s a real problem here,” agrees Schmidt.

Yes, and some media companies think Google is the problem and has not done enough to fix the problem.

“It’s difficult,” says Schmidt. Well, isn’t Google smartier?

“We’re under great pressure to resolve this,” he says.

11:55 am: Klobuchar is still worried about the small businesses, but she wants Google to come to Duluth.

Good lord, it’s a shakedown in plain sight. Maybe Google isn’t the scary one here! These pols seem pretty frightening.

Now Iowa Sen. Charles Grassley is saying he will attend some Google event in his state.

Of course!

Grassley makes a wishy-wishy statement, and we get to hear from Iowans on both sides.

Some are apparently concerned that Google is a troublemaker and some aren’t.

Iowans, like a lot of folks, are torn.

“We are happy to be judged,” says Schmidt.

12:00 pm: Now it is time for Sen. Al Franken from Minnesota.

“First let me say, I love Google,” he says.

Otay. I wonder if Franken knows that Google is a giant scary computer.

But, as a citizen of San Francisco, I say he should love whoever he wants!

Franken is also concerned about his love’s behavior and is taken aback by one of Schmidt’s previous answers.

It’s that irksome Marissa Mayer quote again.

When asked if the algo was unbiased, Schmidt apparently was not as sure as shootin’!

Now, it is onto Yelp and the fiery quotes from Stoppelman about how Google nefariously blocks the review site’s content.

Eric “generally” disagrees with Jeremy.

At one point Google tried to buy Yelp, so this is a fraught situation.

Does Franken know about the previous Google-Yelp hookup?

Drama!

Schmidt says it is Yelp’s fault for asking to be removed from the algo. Actually, Yelp only asked Google to stop jacking its fare.

12:11 pm: Oh noz, another pol? This time Sen. Richard Blumenthal from Connecticut.

He is super-smiley, while calling Google a “behemoth.” I like that word a lot and use it for the company often, although I always like to use a qualifier like “thuggish” or “freaky.”

Back to the blabby Blumenthal, who cannot seem to get out a question.

Wait! He asks if Google can suggest some fixes to “avoid government regulation.”

I. Kid. You. Not.

12:21 pm: Kohl is back and giving Google a little more slap-a-doo.

I like the whole Kohl thang of looking over his glasses down at Schmidt.

He asks: Should we trust Google? Should we?

In my opinion: If your mother says she loves you, you should check it.

So, no!

Schmidt assures him: “We make mistakes.”

Lee is then back, asking if Google gives preference to its own products in search?

Exactly the point and a question that is still not answered properly.

12:24 pm: Lee remains troubled by Schmidt’s testimony.

He uses terms like “leverage its natural dominance” and “significant market share to disadvantage” competitors.

Sounds like, um, Microsoft. And then it is back to that niggling Marissa Mayer quote. (Memo to the voluble exec, who apparently never met a microphone she didn’t want to talk into: You might want to take a day off today at the Googleplex.)

Google-luvin’ Franken is back and he is asking about mobile search.

Where Google is dominant again! (Jellllllo, Al, we in Silicon Valley know that one already!)

He asks if all Android devices come pre-loaded with Google products. Schmidt thinks two-thirds come with it, but handset makers can choose.

12:31 pm: Back to all-smiles Blumenthal, who says he has come to no conclusion.

But lo! He is not as silly as he seems and goes into an interesting racetrack analogy about how Google owns the track and now has horses and now those horses are winning.

Hmmmm…

Schmidt disagrees, natch!

He thinks the Internet is the platform and Google is the GPS.

Metaphor contest!

I think Google is a big tasty banana cream pie we can’t stop eating, although we know it’s bad for us.

That or an alien wearing an expensive suit who will soon eat us all.

Franken comes in with a doping horses joke. Remember when he was funny on “Saturday Night Live”?

Me neither.

It goes on without a lot of really good discussion. Klobuchar asks something, but I forget it immediately. My bad!

She has a last question about advertisers and privacy. Softball!

Let me write this for Schmidt before he inevitably spits it out: Of course, Google wants to protect privacy.

12:37 pm: Finally, the second panel of critics. Sadly, I must go to an appointment in Silicon Valley to visit one of its rapacious companies.

Oops, I meant ee-no-vative.

But, no worries, John Paczkowski will take over from here once it gets going again after the break.

12:47 pm: The panel’s back in session. The first critic to take a shot at Google, Thomas Barnett, a lawyer for Expedia.

12:51 pm: Riffing on Schmidt’s earlier “We know, we get it” comment, Barnett argues the opposite.

“Google doesn’t get it,” he says, adding that the company’s ever-expanding market power is troubling.

12:54 pm: Google is a monopoly, Barnett continues, and it has a duty not to abuse that position. He concludes by saying antitrust enforcement can and should play a role in maintaining competition in the markets in which it does business.

12:57 pm: Moving on now to Nextag CEO Katz, who has some tough words for the search giant. “Today Google doesn’t play fair,” he says.

He argues that Google rigs its results to drive consumers to Google Product Search when they search for information to inform their purchases.

1:00 pm: Next: Stoppelman of Yelp, who wonders if it’s even possible to create a company like Yelp today because of Google’s massive market power.

1:04 pm: Google’s outside lawyer, Susan Creighton, takes the mic next. Having trouble with the video stream from the Senate, but as best I can tell she talked broadly about the competitive landscape and reiterated Schmidt’s “competition is just a click away” narrative.

1:08 pm: She concludes by saying government oversight of Google’s search results rankings would put the company at a disadvantage and turn its search service into something akin to a “regulated utility.”

1:09 pm: Interesting. Creighton says she doesn’t believe Google has monopoly power.

1:10 pm: “Each of you right now can test whether or not you like Google’s search results and if you don’t like them it’s free and instantaneous to try someone else.”

1:22 pm: Apologies, the Senate video feed has gone from bad to worse.

1:23 pm: Franken asks Yelp’s Stoppelman and Nextag’s Katz if they could start their companies today given Google’s market power.

Both say that’s unlikely.

1:26 pm: Terse exchange between Franken and Creighton about whether Google paid Apple to be the default search engine on its iOS devices. Lots of back and forth, but Creighton finally concedes that there’s some sort of financial deal between the two companies.

1:39 pm: Sen. Lee asks what Google might do to “level the playing field.” Stoppelman suggests separating search from its other properties. Pipe dream.

1:40 pm: Well, it looks like it may be getting near the end of the session, which is a good thing because we get it to by now.

And that is: Nothing significant is going to get said here.

The arena for news readers on tablets and smartphones is competitive, with high-profile efforts such as Flipboard, Livestand from Yahoo, AOL’s Editions and start-ups such as Pulse and Zite.

The reason for CNN’s acquisition interest — as well as look-sees from several other publishers — is not a surprise: As readers turn more toward using these mobile devices to consume content, big media companies are trying to acquire the technology to serve up their fare to them.

It is a dicey arena, though, where content aggregation meets (and crashes into) content lifting. Vancouver-based Zite, for example, was sent a cease-and-desist letter in March, by a panoply of media companies (not CNN!) alleging various copyright violations.

That happened right after it was launched, with $4 million in funding from angel investors and Canadian grants and an innovative personalized article-picking algorithm.

As Liz Gannes wrote then:

[Then] Zite CEO Ali Davar describes the iPad as a way to “emancipate the technology” his team originated at research at the University of British Columbia.

It had previously been put to work in a browser plug-in called Worio. And, as you might have guessed, browser plug-ins are a tough business.

The free Zite app imports a user’s Twitter tweets, follows and Google Reader subscriptions, offers lists of pre-made categories, and then solicits feedback and refines over time a list of topics and sources the user is interested in. It features articles based on their popularity, number of shares from a user’s network and topic relevance. (Davar said he thinks a person’s Facebook network data is too heterogeneous to reliably recommend articles, so it’s not included as an option.)

Last week, a Canadian site called Techvibes first wrote about the possibility of the sale of Zite to CNN, which is based in Atlanta and owned by Time Warner.

In a press release, CNN said Zite would remain a standalone unit, as a wholly-owned subsidiary of CNN, and that CEO Mark Johnson will continue to run Zite’s operations, but now in San Francisco. CNN also said that Davar will remain an executive director and Mike Klass will continue as CTO.

In a statement, Johnson said: “Zite is thrilled about combining forces with CNN to create a world-class news discovery platform. In CNN, we have found a partner who shares our vision and passion. Being part of the CNN family gives us the capital to grow Zite’s business and continue to innovate in the space.”

Today, Demand Media beat Wall Street expectations in its second-quarter earning, growing revenue and lessening losses.

The Santa Monica, Calif., online content maker also announced that it had re-upped and expanded its advertising partnership with Google and also bought two start-ups in social media and advertising.

Now, it’s time for the inevitable conference call to explain it all to Wall Street analysts and the media.

2:02 pm PT: The call starts off with an unusually jaunty CEO Richard Rosenblatt, who quickly got to the real deal: Exactly how badly did Google’s changes to its search algorithm, under a program code-named Panda, hurt Demand’s content business?

Not much, says Rosenblatt, who reels off a list of things the company has done to improve its offerings, which have been dinged by many as, well, spam.

Rosenblatt was not having any of that, talking about removing 300,000 pieces of crappy content and also “quality improvements” with partners such as cheerily demented cooking goddess Rachael Ray. She might cook with spam — here is a delightful Spam Hawaiian recipe — but she ain’t spam!

2:13 pm: Now it is on to the acquisition of IndieClick. Essentially: It’s for the young people.

Then, international. Latin America Demand editorial via eHow en español! (Actually, the acquisition of Emergincast.com, an Argentine start-up. Coming soon to a blog site near you: ¿Cómo se hierve el agua?

Last, social media. Demand will be doing a lot more of it, like everyone else in the world, including more recommendations. I would really like it if some Internet company said it was going anti-social.

2:18 pm: The finance guy comes on, covering everything already in the press releases. Which is why I am cutting out here and getting a gluten-free doughnut at the Whole Foods store where I am writing this post.

It is as delicious as you might imagine a gluten-free doughnut can be. Which is to say: Not very!

2:32 pm: Q&A time from the Wall Street dudes — and, let it be said, they are all dudes.

The first question is about the “cleansing” of its cruddy content and if it is all flushed out.

It might be baked-on sludge, but Rosenblatt assures that Demand has it all figured out.

Then, a query about international and how the company decides what to pick. Algo, of course! And local content writers.

Back to the spam content: Does the need to have better content mean less of it? Kind of, since there is a lot more video. But still a lot of content churning out of Demand!

A question about Facebook and how to program Demand content into it. Good lord, it’s hyper-poking!

“It’s not clear the best way of how you expand into all these properties,” said Rosenblatt, specifically referring to its acquisition today of both IndieClick and RSS Graffiti.

The next question is how successful Demand is in the display and brand business, and how IndieClick, a premium ad company aimed at niche blogs, will be integrated in.

More on social media advertising’s future. Aaaghh, this is as obvious as a store-bought-crust apple pie baked by Rachael Ray.

Rosenblatt notes that its flagship site, eHow, is but one means of distribution, but Demand content is going all over the place and winging by people when they least expect it.

“Social is more effective … to try to find stuff you didn’t know that you needed,” says Rosenblatt, who also would not dis search as a means of discovery.

That’s important, since Google is a major traffic driver and advertising partner, when it is not terrorizing Demand and others with its search algo version of Defence Against the Dark Arts Professor Snape.

And presto, here comes a question about Demand’s Google ad relationship, which Rosenblatt touts nicely.

Of course he does. It’s tastier than spam, after all.

The five-year-old HubPages, which publishes content from hundreds of thousands of authors and primarily relies on Google search to obtain Web traffic, has seen “early evidence” that its overhaul may be able to “lift the Google Panda death grip,” said Paul Edmondson, its chief executive, in an interview.

Read the rest of this post on the original site »

“This report is completely unfounded and false, and nothing has changed in our approach,” a Google spokesperson told AllThingsD.

Published to the Launch Conference blog, the report alleged that Google had forbidden manual adjustments to its search results since its infamous “Panda” algorithm update ostensibly because of “multiple government investigations–and possible investigations.”

According to Google, that’s not at all the case. Its search methods are unchanged since Panda, a measure against the “shallow or low quality content” being driven into the company’s search results by content farms.

“Computer algorithms are the most scalable way to deliver relevant results,” the spokesperson said. “However, manual controls are necessary to improve the user experience in very limited cases, such as security concerns, legal issues and spam.”

In other words, Google denies that a government investigation has caused it to adjust its search approach and, further, that it hasn’t adjusted that approach at all.

But have government investigators asked it for examples of manual, non-algorithmic changes to its search results?

Google won’t say. “We don’t discuss the details of our conversations with government officials,” a spokesperson said.

Still, Launch and its founder, Jason Calacanis–who operates Mahalo, a “human-powered search engine” severely impacted by Google’s Panda update–hold firm to their allegations.

“We stand by our story,” Calacanis said. “Google search teams are behaving differently by laying off manual changes–which they admit doing in the case of spam–because government investigations are asking for examples of manual changes. They, of course, need to take the public position that nothing has changed.”

“No one expects them to say, ‘We used to make a lot of manual adjustments to make search better–you know the obvious stuff that any intelligent person would make–but now that the government is investigating our search results we’re being diligent about not handing them ammunition to regulate us.’”

FURTHER READING: Google and the Evolution of Search

1. Human Evaluators — Google Engineering director Scott Huffman
2. Cheating the System — Google software engineer Matt Cutts
3. What’s Next in Search? Much, Much Better Search — Google Fellow Amit Singhal

Last week, after he turned in better-than-expected earnings and tried to explain to a worried Wall Street how the search algorithm changes at Google, called Panda, were significant but not devastating to his business, BoomTown had a short phone interview with Demand Media CEO Richard Rosenblatt.

To ask even more questions about Panda! Grrrrr…

Actually, Rosenblatt was as cordial as ever about what is a hair-pullingly critical issue for his newly public company, which has really been under investor and other scrutiny from the get-go about the way it handles content.

Which is to say very much differently than traditional media companies had done in the past, with an eye on how to optimize traffic and advertising revenue by using tech to know exactly how much each piece of content online is actually worth and how much it should cost.

Them’s been fighting words for a while, with accusations by detractors of Demand’s system that it is little more than a “content farm,” producing poor quality fare.

Rosenblatt has battled that charge all the way through a lucrative IPO, but the company definitely got caught in the Panda maelstrom, as Google has tried to cull out bad results (and make itself look better, it must be said).

This has put Demand in an awkward position–trying to minimize the damage, real and perceived, created by the changes, and also making sure Google does not become even more aggressive by tut-tutting those changes.

It’s a delicate dance for Rosenblatt, as you will see from my handful of questions (especially since Demand’s stock has been badly hit):

Q: What were you trying to communicate in the call, especially since investors seemed very focused on Panda?

A: I was trying in the simplest way to explain the way we figure the relationship of how much traffic to ROI (return on investment) and RPM (revenue per 1,000 impressions).

We really need these kind of signals to shake things up.

Explain what you are doing to improve quality–does that mean longer articles or paying more for content to get better stuff?

A: There are some topics that do not deserve more than 500 words, and some deserve more.

We would spend more on a post on “How to Build a Deck,” for example, if Home Depot were interested in sponsoring that content.

Q: Given Google’s shift in its algorithm, are you shifting your distribution, such as toward social and mobile?

A: If you look at where trends are going, that’s where we are going to be.

If you are out there with our data and our assets, you change as the market changes.

Q: How are you changing the continued perception that Demand is a content farm?

A: I don’t think anyone has defined what a content farm is and I am not sure what it means either.

The only way we are going to do that is continued growth in revenue and showing that we are doing this for the longterm.

Today, after Demand Media beat Wall Street expectations, its execs got on the horn with investors to explain how it plans to beat the Panda.

That would be the beastly name for Google’s rejiggering of its search algorithm, in order to rid search results of poor quality content.

Along with many other sites, Demand has gotten smacked by its raging paw.

Still, the Santa Monica, Calif.-based company reported revenue of $79.5 million and six cents a share in adjusted net income.

Wall Street was expecting the company to report about $69.6 million in revenue for the three months, with four cents a share in adjusted profits.

On a GAAP basis, net loss per share was 13 cents compared to 94 cents a year ago.

Here’s the liveblog of the conference call:

2 pm PT: Demand’s investor relations dude came on and I immediately tuned out until CEO Richard Rosenblatt got on the line to talk about the results.

He was as perky as ever, launching right into the meat of the situation–how Demand was going to pretty up its offerings, such as a redesign of its flagship eHow site and its new editorial arrangement with another perky person, food lady Rachael Ray and the also perky fashionista/talk show lady Tyra Banks.

Gone will be user-generated content that Demand used to let people post at will on its eHow site that was, well, less than good.

As in, bad.

Instead, it’s “curation,” “editorial innovation” and feedback cycles.

We old-timers like to call that journalism and copyediting, complete with mean old editors who spiked said copy when it was crappy.

“Let me be clear,” said Rosenblatt, the Google changes did negatively impact Demand’s traffic. But Rosenblatt said the company dug into its content and has been improving it since.

2:17 pm: Now it was CFO Charles Hillard reading the results themselves. I am sorry, Mr. Finance Guy, but I can read it myself, so this is always the time in earnings calls when I check out and spend my time improving my content.

So when I heard words such as “stock-based comp,” I moved on to fixing all the typos that a very nice reader alerted me to, since I was writing too quickly.

Then, I briefly considered writing a high-quality post for eHow on how to write earnings and fix typos at the same time. I am that good.

2:30 pm: The CFO dude finished up and the Q&A with analysts started.

All Panda questions, natch!

Rosenblatt seemed calm, cool and collected.

“We think on this one, they did a very good job,” he said of Google’s search-fixing efforts, trying to soothe the savage beast. “We all continue to evolve.”

Which translated to: Google says jump and we say: “How high?”

Which is then followed by: “Please sir, can I have some more (traffic)?”

More Google algo change questions.

I suspect there is a new tactic afoot by Demand: Bore us into submission about the traffic devastation from Larry Page’s minions with endless questions about algo.

Finally, a question about mobile and international expansion. Apparently, Demand content is going to be translated into five different languages.

Yay! I am readying my version of “How to Boil Water” in French! (“Comment Faire Bouillir L’eau”!)

Mobile is going to be big too for Demand, which it is for everyone.

Then it was onto a question about improving content, including paying its writers more moolah, which would then eat into the Demand cheaper content business model.

I liked that question! I suddenly decided I was going to shift to a lugubrious post on the history of the Maginot Line in 132 parts!

Oops, Rosenblatt said the data has to show that the peeps want those longer pieces.

Back to the boiling water opus!

It’s on to some video questions and then back to search, as in diversifying away from relying on search to get traffic and premium prices for its advertising.

As in, how much are you going to cozy up to Facebook CEO Mark Zuckerberg?

“It’s less about where traffic comes from and more about where they land,” said Rosenblatt, except you just know he sent a lovely floral bouquet plus a hefty selection of citrus to Zuckerberg’s new house in Silicon Valley right after Panda roared.

Rosenblatt deflected a lot of questions in this arena. “We still think that search is a fantastic way” to gain traffic, he said, making sure Google’s Page did not chomp off his hand as he courted his social networking nemesis at Facebook.

But as the old Kikuyu proverb goes: “When elephants fight, it is the grass that suffers.”

More likely, as Mary Chapin Carpenter sings: “Sometimes you’re the windshield. Sometimes you’re the bug.”

We’ll see which is which for Demand in the quarters ahead.

Until then, here’s Carpenter performing her song, “The Bug”:

Demand Media handily beat Wall Street expectations in its first quarter results today, released after the market closed.

The company reported revenue of $79.5 million and six cents a share in adjusted net income.

Investors were expecting the company to report about $69.6 million in revenue for the three months, with four cents a share in adjusted profits.

On a GAAP basis, the net loss per share was 13 cents compared to 94 cents a year ago.

The decent results could boost Demand’s stock, which has been hit hard since Google launched “Panda,” an overhaul of its search algorithm to improve results and remove poor quality content.

In a conference call at 2 pm PT today, which BoomTown will be liveblogging, most will be paying more mind to what the online content company’s top execs–especially CEO Richard Rosenblatt–have to say about the impact of the updates from Google to Demand’s various Web offerings.

As a first strike, some of Demand’s execs briefed the media earlier today on efforts to improve the quality of its content–you can read the official press releases here on that and also here.

In them, Demand said it will remove some online posts that were substandard and created under a now-suspended writers’ compensation system. It said it is also improving reader feedback tools and adding more substantive stories to its sites.

Those are all good ideas, since Google’s tweaks have been chewing away at a range of Web sites–such as those owned by Demand–which rely heavily on search engine optimization to bring in huge traffic.

One big hit for Demand, due to Panda, has been to its flagship eHow site.

All the mishegas has hurt the Santa Monica, Calif., company’s stock. It’s down just over 30 percent since Demand’s IPO in late January, as bearish investors fret over the implications of Panda.

Still, in its report, Demand said its content and media revenue was up 72 percent to $51.9 million, compared to $30.2 million last year.

Later today, Demand Media will report its first-quarter earnings, its second outing after its IPO earlier this year.

Wall Street is expecting the company to report about $69.6 million in revenue for the three months, with 4 cents a share in profits.

But what most will be paying more mind to will be what the online content company’s top execs–especially CEO Richard Rosenblatt–have to say about the impact of search algorithm updates at Google to its various Web offerings.

Codenamed “Panda,” the effort by the Silicon Valley search giant is aimed at improving results by getting rid of poorly conceived content.

And, indeed, the tweaks have been chewing away at a range of Web sites–such as those owned by Demand–which rely heavily on search engine optimization to bring in huge traffic.

One big hit for Demand, due to Panda, has been to its flagship eHow site.

All the mishegas has hurt the Santa Monica, Calif., company’s stock. It’s down just over 30 percent since its public offering in late January, as bearish investors fret over the implications of Panda.

That said, Demand shares were up more than six percent yesterday, to close at $15.75. And some think the recent stock fall has been overblown.

However the winds blow, Rosenblatt must play it cool, since he cannot spook Wall Street, but also does not want to indicate to Google that its efforts are not effective either.

Tune in after 1 pm PT today to get the first-quarter results, and even more at Demand’s 2 pm conference call with analysts, where BoomTown will translate it all for you.

Until then, please enjoy the movie trailer for “Kung Fu Panda 2,” which opens May 26:

Tonight, Demand Media–in reaction to a new study showing that its flagship eHow site had now gotten much more negatively impacted by Google’s rejiggering of its search algorithm than previously–released a statement and blog post about the tempest.

In it, the Santa Monica, Calif.-based company reaffirmed its outlook for fiscal year 2011, noting, in part:

“Certain third parties that have published reports attempting to estimate the effect of recent search engine algorithm changes made by Google on traffic to the Company’s owned and operated websites have significantly overstated the negative impact of those changes on traffic to eHow.com, as compared to the Company’s directly measured internal data.”

The company, though, declined to give specific details about the impact of Google’s attempt to clean up its search results by tweaking its algorithms to cut out poorly made material from so-called “content farms.”

While others had apparently been initially impacted by Google’s first foray, such as Yahoo’s Associated Content unit, Demand had not been.

That is, until a recent Sistrix poll (see chart below), showing eHow has now been hurt badly by even more Google search changes, codenamed Panda.

While acknowledging a decline in search traffic on eHow from the Google changes, Demand said the Sistrix data was way off.

In a blog post, Larry Fitzgibbon, Demand’s EVP of Media and Operations, wrote, in part:

“However, recent third-party reports attempting to estimate the impact to our search driven traffic, including one projecting a 2/3rds decline in eHow.com traffic, are so significantly overstated that we decided to comment.”

When Google began making changes to its search formula, Demand CEO Richard Rosenblatt told MediaMemo’s Peter Kafka in an interview that its relationship with Google was all sunshine and roses.

When asked how its relationship with Google was, Rosenblatt said:

“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.”

It will be interesting to see how he feels now.

Here are both Demand’s official press release and blog below:

Demand Media Reaffirms Outlook for Fiscal Year 2011

SANTA MONICA, Calif., Apr 18, 2011 (BUSINESS WIRE)

Demand Media, Inc. (NYSE: DMD), a leading content and social media company, announced today that it is reaffirming its financial outlook for fiscal year 2011 that it previously provided on February 22, 2011.

Certain third parties that have published reports attempting to estimate the effect of recent search engine algorithm changes made by Google on traffic to the Company’s owned and operated websites have significantly overstated the negative impact of those changes on traffic to eHow.com, as compared to the Company’s directly measured internal data. Recent search engine algorithm changes have negatively impacted search driven traffic to some of our websites, including eHow.com, resulting in moderately lower year-to-date page view growth for the Company’s owned and operated Content & Media properties compared to page view growth rates before the algorithm changes. Nevertheless, the Company currently expects that its year-over-year page view growth across its owned and operated Content & Media properties in the second quarter of 2011 will be comparable to, or greater than, the year-over-year page view growth achieved in the second quarter of 2010.

As previously announced, the Company will report its first quarter 2011 financial results on May 5, 2011. The Company will host a conference call to discuss the results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be available and can be accessed within the investor relations section of Demand Media’s corporate website at ir.demandmedia.com.

Another Statement About Search Engine Algorithm Changes

Posted by larry fitzgibbon at 4/17/2011 10:05 PM PDT

It’s hard to imagine a company more focused on the connection between consumers and content than Demand Media. That point of connection gives us the opportunity to inform, engage and serve the consumer. And it’s where trusted relationships start. So, how our content reaches the consumer–whether it’s through direct visits, social media referrals, apps or search–continues to be top of mind with everyone at the company. Consumers are connecting with more content than ever before as social media and mobile access have emerged to play huge roles that didn’t even exist just a few years ago. And search engines, of course, continue to play an integral part in content discovery and have been hard at work improving their products to create the best consumer experiences possible.

As I discussed on my last blog post, Google recently made significant search algorithm changes in an update dubbed Panda that has rolled out in various capacities from late February thru mid-April. With respect to Panda’s mid-April update, some of our properties saw Google search referrals move up while other properties, including our largest property eHow.com, saw these referrals go down.

As I said in my prior post, we generally do not comment or speculate on changes by major search engines, as these changes can happen nearly daily. However, recent third-party reports attempting to estimate the impact to our search driven traffic, including one projecting a 2/3rds decline in eHow.com traffic, are so significantly overstated that we decided to comment. As discussed in our press release issued today, we currently expect that in Q2 2011 our owned and operated Content & Media properties will generate year-over-year page view growth comparable to or greater than the year-over-year page view growth reported for Q2 2010. We have also reaffirmed our calendar year 2011 financial guidance in this press release.

Demand Media has a myriad of impactful sites and many sources of traffic. We are encouraged that the investments we’ve been making in site experience and content quality are making an impact with our consumers. Organic growth in visits from non-search sources to eHow continue to grow rapidly and Cracked.com is now the most visited humor site on the Internet with the majority of its page views coming from direct visits. Improvements have been registered from eHow’s recent redesign and the introduction of new video series leading to significant growth in Facebook likes. Our brand advertisers have also reported encouraging results with their intent-targeted campaigns. Rest assured, just as we have been innovators in building one of the largest online audiences, we are applying that same rigor and intensity to delivering a quality experience for consumers and advertisers.

As a disruptive digital media and technology company, we have been operating in a fast moving environment since the company’s founding five years ago. While change is frequent, one thing is certain–Demand Media is steadfast in our commitment to produce great outcomes for our consumers, advertisers and community of creative professionals. We’re in the trenches listening, learning, adapting and innovating–and we are very excited about the opportunity in front of us. We look forward to providing details on all of these topics and more in our previously announced conference call at 5:00pm (Eastern) May 5th, 2011 to discuss first quarter 2011 financial results.

Larry Fitzgibbon is Demand Media’s EVP of Media and Operations, and manages the company’s rapidly growing network of consumer properties.

Microsoft’s legal eagle Brad Smith didn’t even bother to pretend the software giant’s filing of a formal antitrust complaint against Google with the European Commission wasn’t a wee bit ironic.

Wrote Smith in a blog post late last night:

“There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step.”

But take it the company did, noting: “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law.”

Google, no surprise, disagreed, via a statement from a spokesman.

“We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we’re happy to explain to anyone how our business works.”

Here is the whole Microsoft post, in which Smith outlines Microsoft reasons for its action:

Adding our Voice to Concerns about Search in Europe

30 Mar 2011 9:00 PM

Posted by Brad Smith

Senior Vice President & General Counsel, Microsoft Corporation

Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law. We thought it important to be transparent and provide some information on what we’re doing and why.

At the outset, we should be among the first to compliment Google for its genuine innovations, of which there have been many over the past decade. As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive. Google has done much to advance its laudable mission to “organize the world’s information,” but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.

We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market. By the European Commission’s own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo!.

At Microsoft we’ve shown that we’re prepared to work hard and invest literally billions of dollars annually to offer Bing, a search service that many now regard as the most innovative available. But, hard work and innovation need a fair and competitive marketplace in which to thrive, and twice the Department of Justice has intervened to thwart Google’s unlawful conduct from impeding fair competition. In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down. And last year the DOJ formally objected to Google’s efforts to monopolize book content, a position affirmed by a federal district court in New York just last week. Unfortunately, even this has not stopped the spread by Google of new and disconcerting practices in the United States.

As troubling as the situation is in United States, it is worse in Europe. That is why our filing today focuses on a pattern of actions that Google has taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers.

How does it do this? Google has built its business on indexing and displaying snippets of other organizations’ Web content. It understands as well as anyone that search engines depend upon the openness of the Web in order to function properly, and it’s quick to complain when others undermine this. Unfortunately, Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers.

On PCs it is usually not difficult for people to navigate to any search engine. Google in fact makes this point virtually every time someone raises antitrust concerns about their practices. Their defense ignores the hugely important fact that there are many other important ways that search services compete. Search engines compete to index the Web as fully as possible so they can generate good search results, they compete to gain advertisers (the source of revenue in this business), and they compete to gain distribution of their search boxes through Web sites. Consumers will not benefit from clicking to alternative sites unless all search engines have a fair opportunity to compete in each of these areas.

Our filing details many instances where Google is impeding competition in these areas. A half-dozen examples below help illustrate some of our concerns.

First, in 2006 Google acquired YouTube–and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google.

Second, in 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It’s done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service.

Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

Third, Google is seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week, in the decision involving Google’s effort to obtain exclusive and unfettered access to the large volume of so-called “orphan books–books for which no copyright holder can readily be found. Under Google’s plan only its search engine would be able to return search results from these books. As the federal court said in rejecting this plan, “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.” This is an important initial step under U.S. law, but it needs to be reinforced by similar positions in Europe and the rest of the world.

Fourth, Google is even restricting its customers’–namely, advertisers’–access to their own data. Advertisers input large amounts of data into Google’s ad servers in the course of managing their advertising campaigns. This data belongs to the advertisers: it reflects their decisions about their own business. But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.

This makes it much more costly for Google’s advertisers to run portions of their campaigns with any competitor, and thus less likely that they will do so. That is a significant problem because most advertisers figure that they have to advertise first with Google. If it’s too expensive to port their advertising campaign data to competing advertising platforms, many won’t do it. Competing search engines are left with less relevant ads, and less revenue. And while this restraint isn’t visible to consumers, its effects are nonetheless felt across the Web. Advertising revenue is the economic propellant fueling the billions of dollars needed for ongoing search investments. By reducing competitors’ ability to attract advertising revenue, this restriction strikes at the heart of a competitive market.

Fifth, this undermining of competition is reflected in concerns that go beyond Google’s control over content. One of the ways that search engines attract users is through distribution of search boxes through Web sites. Unfortunately, Google contractually blocks leading Web sites in Europe from distributing competing search boxes. It is obviously difficult for competing search engines to gain users when nearly every search box is powered by Google. Google’s exclusivity terms have even blocked Microsoft from distributing its Windows Live services, such as email and online document storage, through European telecommunications companies because these services are monetized through Bing search boxes.

Finally, we share the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.

Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They’ve urged us to share our knowledge of the search market with competition officials. As they’ve pointed out, the stakes are high for the European economy. On any given day, more than half of all Europeans use the Internet, and more than 90 percent of them look for information about goods and services on the Web. Indeed, the European Commission’s Digital Agenda made clear that commerce is moving online, where two-thirds of Europeans begin their shopping process. It’s therefore critical that search engines and online advertising move forward in an open, fair and competitive manner.

There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.

We readily appreciate that Google should continue to have the freedom to innovate. But it shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That’s what it’s doing now. And that’s what we hope European officials will assess and ultimately decide to stop.

Please see this disclosure related to me and Google.

The algorithm contest, the largest of its kind so far, is part of a trend toward using such prizes to help find the best answers to complicated data-analysis questions.

Data-mining competitions have been around for a while–most notably the $1 million Netflix Inc. prize awarded in 2009 for a model to better predict what movies people would like. But the $3 million health prize, which is sponsored by California managed-care company Heritage Provider Network Inc., raises the stakes. And the start-up handling the competition, Kaggle Pty. Ltd., is aiming to build a business by conducting even more.

Read the rest of this post on the original site

Yahoo’s Luke Beatty said he is not worried.

“We welcome the change,” he insisted about Google taking aim last Friday at so-called “content farms,” producers of low-quality content that spam up the Web and the search giant’s results. “And we endorse what Google is doing 100 percent.”

That’s ironic, given among those allegedly hit hardest by changing of its famous algorithm–based on early, and perhaps questionable, surveys–is Yahoo’s Associated Content.

But, if true, and traffic at Associated Content–which the Silicon Valley Internet giant bought for $90 million last May–is indeed badly hurt, it’s obviously going to be a problem for Yahoo, which relies on advertising revenue as its core business.

A quick poll by Sistrix, a search engine optimization firm, using one million keywords before and after Google’s changes, showed that Associated Content’s “visibility index”– including keyword and ranking positions ranking and clickthrough rate–was down 93 percent.

So yesterday, Beatty, who founded Associated Content and now works at Yahoo, dialed up BoomTown to talk about what the Google shift will mean to Yahoo.

First off in the wide-ranging interview, he noted, “everything on the Web is changing all the time,” noting that Associated Content used to rely more on the now weakened Digg and RSS for its traffic and distribution.

“Obviously, that has changed and we have still managed to grow,” he said.

Beatty said it is still not clear that the new tweaks in search criteria at Google would mean for Associated Content’s offerings–coming from 400,000 contributors of all kinds.

“Our data will not be reconciled for weeks…but some will be up and some will be down,” he said, adding the overall, “I suspect it will be down, although it’s not accurate by any means in the numbers released so far, since there is no way you can know this early.”

Still, it’s obvious that Google’s latest move has not been not good for Associated Content, although Beatty noted that the Silicon Valley search king is no longer the main source of traffic for Associated Content material.

Instead, that would be the owned-and-operated sites of Yahoo, most of all, and–increasingly–social networking sites such as Facebook.

“When we sold the company, we know that sites of Yahoo itself would be the biggest driver of our growth and that was the plan,” said Beatty. “And, though smaller, social means of distribution are clearly the way people are now finding our content.”

In an email later, Beatty underscored this point:

“Search traffic is not our focus within Yahoo–it hasn’t been for 10
months…traffic sources have changed endlessly over that last six years…search is one, albeit an important one and clearly, [but] now it too is changing and we see the future of our content distribution coming from O&O properties and social networks, as much as anything.”

Still, Beatty said Associated Content will adapt as long as Google does not make its tweaks on a network basis and rather than on a site basis. (Interestingly, that would presumably include Google’s own–and often spammish–Blogger property, which is fueled by its powerful AdSense engine.)

“It appears that changes have been made on an asset-by-asset basis
is good–networkwide cramdown would be inappropriate and uneducated,” he said.

Still, the best way to fight the Google initiative is by delivering higher quality content, which Beatty said was being done at the company via a series of ongoing measures to improve overall submissions.

Those include a Yahoo style guide for content creators, a two-tiered human editor review process, analytical analysis, a featured contributor program and, interesting, an online tutorial process called the Yahoo Contributor Network.

It’s not exactly Harvard University, of course, but Beatty said there is more to come.

“We are committed to supporting and helping our contributors navigate through this and every other change in the crowdsourced content economy,” he said. “We want the best article to get more traffic.”

Of course, with Google’s doubtlessly continuing changes in its criteria for what good content is, presumably, that won’t be Yahoo’s to decide.