Los Angeles Business Journal

Demand Posts First Quarter Profit

By Tom Dotan Tuesday, May 7, 2013

Demand Media Inc. beat analysts’ estimates for the first quarter of 2013, led by increases in revenue from the Web publisher’s sites as well as its domain registration business.

Net income was $8.2 million (9 cents a share) for the quarter ended March 31, compared with $5.9 million (7 cents) during the same period a year ago. That 37 percent jump in earnings topped Wall Street’s expectations of a 15 percent increase on earnings of 8 cents a share.

Demand also logged first quarter revenue of $101 million – a 17 percent spike compared with the period a year earlier and just higher than analysts’ estimates of $99.6 million

The revenue jump was led by an increase in the number of page views for Demand’s owned and operated websites, such as learning site eHow.com and lifestyle site livestrong.com. These sites were viewed more than 3.7 billion times during the quarter – an increase of 20 percent over the year earlier.

ENom, Demand’s domain registration arm, grew modestly during the quarter. Earlier this year, the company announced it was spinning off the domain registration side into a standalone business.

In a release, Demand executives referred to 2013 as an “investment year.” So far that has meant the acquisition of Creativebug in March; Creativebug is a subscription e-learning site for crafting, and marks the company’s first foray into paid content. Typically, Demand has made money through ad revenue on its Web pages and videos.

In a release, Chief Executive Richard Rosenblatt praised the Creativebug acquisition and the growth in the domain registration business.

“We are excited about the distinct long-term growth opportunities for both of our businesses,” Rosenblatt said.