The growing importance of social media, coupled with the powerful wrath of Google, have shaken the once-hot world of cheap search-driven publishing.
About.com recently dumped its CEO . Yahoo’s $100 million acquisition of Associated Content  (now Yahoo Voices) has yielded a network of 700,000 freelancers who produce secondary content on sites like Yahoo Sports and OMG, but advertisers say they haven’t heard about it in more than a year.
Meanwhile, AOL’s Seed project is essentially in limbo. In fact, visitors to Seed.com are currently greeted with the message "We are in the process of reformatting Seed.com and new assignments are currently on hold." In a statement, AOL said it has reduced the number of Seed freelancers “as we evaluate how best to integrate its strengths within [the company].”
And then there’s Demand Media, which pioneered the practice of churning out thousands of articles based on Google search data. Last week, three of Demand’s founders exited, a year after its underwhelming IPO. Its signature property, eHow.com, is still massive (around 50 million unique users) but has lost about 10 million users since Google adjusted its algorithm to weed out low-quality content. Demand has very publicly pivoted to celebrity-centric content and splashier design to attract advertisers. Typef.com, a site built around Tyra Banks, is just building its audience, while Livestrong.com, a health site backed by Lance Armstrong, has seen traffic climb by 19 percent over the past year.
Still, Facebook and Twitter likely have more to do with the category’s decline than Google. Wetpaint and BuzzFeed are among a new breed of publishers mastering the creation of highly shareable content. Wetpaint COO Rob Grady estimated that while search still matters, Facebook alone accounts for 35 percent of visits. Social readers, he said, are 2.5 times more valuable than search-driven readers in time spent and frequency.
“The value of the search user is declining,” said Grady. That’s why Demand is touting its socially infused programs for brands like Kraft and the growth of its social media-friendly humor site, Cracked (5.5 million users).
“We believe that driving active media consumption on Facebook requires creating content in a different way than YouTube or search,” said Joanne Bradford, Demand’s chief revenue officer. “While our eHow content is mostly discovered via search, our Cracked content is discovered through sharing via social. Content has to be created for more than a website; it needs to be created for a multi-platform world.”
However, it's important to keep the shift away from a search-centric Web to a social one in perspective. A new report from Citigroup Investment Research's managing director Mark Mahaney found that in 2010 and 2011, Google delivered 17 percent of all the traffic to the top 30 Websites. By this year that number was down to 16 percent. "That’s slippage, but at a glacial pace," wrote Mahaney.
Agencies have never been as hung up  on the way companies like Demand produced content, i.e. using lots of low paid freelancers. But they haven't necessarily viewed their sites as premium either -- Demand's selling point seemed to be it low ad rates. Molly Sugarman, Horizon Media’s director of digital media innovation, said her team rarely works with Demand since it’s seen as an outlet for direct-response brands—not where a so-called premium publisher wants to be.
Sugarman praised Demand for partnering with the likes of Tyra Banks on more ad-friendly sites such as typeF.com. “I was surprised the founders left, just when Demand was headed down the right path,” she said. “Everyone has realized it’s more about quality.”
And content that lends itself to sharing is seen as an indication of quaity among many advertisers, said Sugarman. But given that perception among brands, one wonders whether publishers might look to game Facebook, producing content built for sharing just as others has produced content with Google's algorithm very much in mind.
In fact, according to Grady, publishers like WetPaint have gotten producing social-friendly content to a near science. For example, his team monitors how fans react to specific characters and storylines in a show like ABC's "The Bachelor" -- even what time of day fans are most likely to respond to artciles -- and looks to maximize sharing using that amunition.
"I don't see that as gaming anything," said Grady. "That's about smart strategy and developing an expertise. You can get very good at learning what your audience wants."