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Demand Media Considers Split Into Two Separate Publicly Traded Entities

Demand Media Could Split Into Two Companies

Content development and website registrar company Demand Media may soon split into two separate publicly traded businesses.

Demand Media currently operates a content division which features popular websites that include Livestrong.com, eHow.com, Golflink.com, and many others. The company also operates a very successful website registration division that functions outside of its content creation division.

In the company’s earnings report, CEO Richard Rosenblatt declared:

“We improved content quality and diversified our distribution channels by successfully revamping our content platform in 2012, and are now prepared to significantly increase our content investments in 2013. In addition, we became a leader in the generic Top Level Domain opportunity, due to substantial investments we made in 2012. We plan to increase this investment ahead of the expected launch later this year.

“As a result of these two different growth opportunities, we also announced today that our Board of Directors has authorized a plan to explore the separation of our business into two independent publicly-traded companies via a tax-free spin-off. If approved, the separation will facilitate better operational and strategic flexibility, enabling each business to focus on its distinct priorities and growth opportunities.”

Demand Media purchased Name.com at the end of 2012, an acquisition that will allow Demand Media to expand its registrar business even further.

The company’s media business and content division took in $227 million in revenue throughout 2012, up 18 percent from 2011. Revenue from its registrar business was $134.2 million, up 12 percent year-over-year.

Overall Demand Media generated total revenue of $103.1 million with net income of $4.7 million for the final quarter 2012.

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