Demand Media, founded in 2006, is an online media company that quickly grew to prominence by algorithmically assigning and publishing stories based on user-demand signals, such as search and social media trends.
It typically pays authors a low sum of money for these posts, often about $15 per contribution, and assigns posts only when it believes they will generate enough revenue to earn their keep.
Operating a number of prominent brands such as eHow, Cracked, and Livestrong.com, Demand Media has been criticized as a content farm (a charge CEO Richard Rosenblatt has strongly denied) even as traditional media sites like USA Today have partnered with the company to build an inventory of inexpensive content.
In January 2011, Demand Media went public at a valuation of more than $1 billion, making it worth more (on paper) than the New York Times. Filings related to that offering showed that, despite its low labor costs, Demand Media had yet to make an annual profit. The IPO faced intense scrutiny for the media company’s unusual accounting practices as well as the potential danger of a Google backlash against low-value content.