Demand Media’s Stock Drops Like Its Google Traffic


Demand Media is trying to give the impression that everything is OK down on the content farm.

They have confirmed their financial guidance for the year but that confirmation is interesting considering the following two realities. Their Google traffic is down 40% after it was Panda-ficated. As a result, Demand’s stock as fallen 34% following their much talked about IPO in January. Since pictures are worth a thousand words I’ll save myself a lot of writing and you a lot of reading. The chart below came to us from SAI.

There were many of you who were upset that we talked about Demand in less than glowing terms and had predicted that the content farm game’s dependency on Google was more than just risky. Heck, even their own corporate reports said that. Now the reality is setting in quick and it’s not just Demand feeling the pinch but their stockholders as well. Looks like the latest content farm crop may be a crock.

I suspect that shareholders will demand more from Demand sooner than later. Your thoughts?

  • http://www.jumbocdinvestments.com/ Jumbo CDs

    I suspect if they just re-focus some talent to building quality links they can recover. However, that is probably more costly. And I’m not talking about paid links, just theorizing that link builders are more expensive than content writers.

    The question is will the stockholders have the patience. Because a quality link graph takes time to build especially for a company that has been smacked by Google a bit.

  • http://www.accidentaldomainer.com Aaron

    I was shocked that they re-affirmed guidance after Panda. Now, I can’t wait to see earnings…….if all the reports about a 40% traffic drop are correct, unless they’ve got a rabbit to pull out of their hat, it won’t be pretty.