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Demand Media Gets Closer To The Black

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In the aftermath of its filing for an initial public offering in August, Demand Media was roundly criticized for overstating its financial performance in the past. The WSJ, for instance, pointed out that while the company had said it was profitable in 2009, the filing in fact showed that the company had posted a loss of $22 million that year — and that the red ink was growing. A new financial filing, however, shows that the company’s losses are narrowing significantly.

During the most recent quarter ended Sept. 30, Demand Media posted a loss of $305,000. That was a turnaround from the same quarter a year ago when the company posted a net loss of $4.2 million, as well as the second quarter of the year when it said it lost $1.9 million.

The company’s quarterly revenue also jumped 26 percent to $65.4 million, from $51.7 million during the third quarter of 2009. Much of that increase was driven by the company’s core “content and media” business, which reported sales of $39.8 million, up 39 percent from a year ago. The company’s domain business, meanwhile, posted sales of $25.5 million, up nearly 11 percent.

In its filing, Demand Media says its overall traffic continues to rise. The company says its owned and operated sites attracted 94 million unique visitors during the most recent quarter, up from 86 million during the second quarter of the year.

By all accounts, Demand Media is set to begin its IPO roadshow very soon in hopes of going public before the end of the year.