Los Angeles Business Journal

Demand Media Revenue Grows, Traffic Slows

By Natalie Jarvey Wednesday, August 7, 2013

As Demand Media inches closer to becoming two separate companies, the media and registrar businesses show noticeably different quarterly results.

The Santa Monica company on Wednesday reported second quarter net income of $1.1 million, up from $100,000 during the same period last year. Revenue grew 9 percent to $101 million for the quarter.

Demand's content and media division, however, was plagued by decreased revenue and traffic at its portfolio of sites, which include eHow and Livestrong. The company reported declining traffic on Demand-owned-and-operated sites, which saw lower search engine referrals, and declining revenue on network sites, which saw lower revenue from YouTube channels.

The company has been making an effort to add premium content to its stable of media properties. It announced subscription advice service eHow Now on Tuesday and also recently added a subscription workout service through Livestrong.com.

During the company's earnings call, executives estimated that commerce on its websites could account for up to 25 percent of content and media revenue by the end of next year.

Meanwhile, revenue for the registrar business, which will split into a separate public company by early next year, grew 10 percent year-over-year, driven by the company's acquisition of Name.com last year. Excluding the acquisition, it would have grown 4 percent.

Prior to the earnings announcement, Demand's stock closed down 11 cents, or more than 1 percent, to $6.63.