Demand Media Inc.’s deal with celebrity chef Rachael Ray could draw new visitors to the Santa Monica company’s website and help it bolster the credibility of its how-to articles and videos.
Demand announced last week that it signed a multiyear contract with Ray to have the queen of the 30-minute meal create content and develop talent for eHow.com, the company’s flagship site that features tutorials and guides on a constellation of subjects.
Ray, who stars in her own talk show and hosts several shows for Food Network, will feature her recipes and content from other cooks on eHow’s food page.
Lou Kerner, vice president in equity research at Wedbush Securities in New York, said Ray should be able to bring many of her fans to eHow.
“Rachael Ray commands a great audience,” Kerner said. “A lot of people care about what she says.”
Terms of Demand’s deal with Ray were not disclosed. The company did not return a request for comment.
Ray’s signing is the latest step in Demand’s evolution. The company went public in January and has been fighting the perception that it churns out low-quality stories that cheat Google’s algorithm to get top billing in search results.
It’s not Demand’s first celebrity play, however. The company operates cyclist Lance Armstrong’s LiveStrong.com, which specializes in health and fitness content. It will launch fashion and beauty website TypeF.com on March 15 with Tyra Banks of “America’s Next Top Model” and talk show fame.
Rocco Pendola, a writer who blogs about the company and its stock at SeekingAlpha.com, said working with celebrities helps the company build more brand awareness among consumers.
“Bringing in a celebrity component, it adds more credibility and awareness and draws more people to the site,” said Pendola, who also freelances for Demand.
Critics of the company denigrate it as a content farm filled with substandard articles churned out by low-paid freelancers on topics that range from creating a vegetable garden to making international phone calls.
Time.com’s Techland blog reported the Ray deal this way: “Demand Media, the soul-crushingly prolific supplier of SEO-friendly link-bait, has convinced celebrity chef Rachael Ray to join its fold.”
Richard Rosenblatt, the company’s chief executive, has defended the quality of Demand’s content, saying an article is subject to several layers of review before it is posted.
Meanwhile, Google announced last month that it had redesigned its search algorithm to weed out low-quality, unoriginal content that’s commonly associated with content farms. Rosenblatt, speaking at an advertising conference in La Quinta last week, said that the switch has not hurt the company’s search results.
Demand recently reported a net profit of $1 million in the fourth quarter last year, up from a loss of $3.9 million in the same period in 2009. Fourth quarter revenue was $73.6 million, up 33 percent from $55.5 million.
Wedbush’s Kerner said the company’s strong suit is its offer of a wide range of articles.
“They want all kinds of content, be it assembly-line content or in-depth content that Rachael’s producing,” he said.
The deal also helps Ray, he added, by exposing her to eHow users who might not watch her shows.
“Everybody wants a bigger audience,” Kerner said. “Nobody says, ‘You know what? My audience is too big.’ ”
