The paidContent 50: The Most Successful Digital Media Companies In The U.S.

38. Demand Media

Demand Media

U.S. 2010 digital revenue: $250 million

Snapshot: Like it or not (and the company really does not) — Demand Media has become synonymous with the term “content farm.” It pays users to write articles about popular topics that then appear on its network of sites, which include eHow, Livestrong and Cracked, as well as those of media partners like the San Francisco Chronicle and USA Today. Its owned sites get more than 86 million unique visitors a month.

Demand Media has been moving aggressively to diversify its revenue beyond Google’s AdSense ads, hiring away top Yahoo executive Joanne Bradford as its chief revenue officer in order to attract brand advertisers. Recently, Google tweaked its search algorithm to make it harder for so-called content farms to appear high in the results. Early reports show that Demand’s traffic has not suffered as a result. If that trend continues, it will help make the case to Demand’s critics that its content quality rises above content farm.

Key digital move in 2010: Demand Media went public in January — and ultimately raised $151.3 million, outstripping the $125 million it said it hoped to generate in its IPO filings in August.

How we generated our estimate: The publicly traded company said sales were $252.9 million in 2010, up 27 percent from the year before. A significant percentage of Demand Media’s revenue also comes from its domain business, but we’re counting it here, since, in addition to being the largest wholesaler of domains in the world, the unit also helps domain owners monetize their domains by either parking them (sticking a bunch of ads on them, but no content) or providing text-based ads on sites that do have content. The vast majority of Demand Media’s revenue comes from the U.S.