Demand Media CEO Brushes Off Google’s Algorithm Switch

When Richard Rosenblatt, co-founder and CEO of Demand Media, heard that Google was changing its algorithm—seemingly with the intent to weed out content produced by companies like his—he didn’t panic. Rather, he shrugged.
In fact, Rosenblatt believes that Google’s announcement really wasn’t targeted at Demand, but companies that don’t churn out a lot of original content (something Demand does a lot of).
“Nothing changed materially for our business,” said Rosenblatt, delivering the opening keynote on Tuesday (March 1) at day three of the Interactive Advertising Bureau’s annual meeting in La Quinta, Calif.
Though Demand did respond last week with a statement—its first public commentary since the company’s recent IPO—Rosenblatt believes Google’s move was blown out of proportion.  “We cannot be commenting every time Google makes an algorithm change. It’s just one component of our ecosystem. We’re fine. We’re just trying to create quality content.”
It’s the quality of Demand’s content that many journalists and industry analysts have harped on ever since the company emerged. Rosenblatt didn’t deny that Demand’s model is based on producing content based on what people are searching on—however minute or frivolous. But he took pains to defend Demand’s editorial process and output.
“We really are a company that is focused on data and listening to the consumer,” he said. “But 14 humans touch every single piece of content. . . . There isn’t anybody else [in this industry] that has copy editors.”
Yet despite the employment of copy editors and thousands of freelancers, Rosenblatt attempted to defend criticisms that its model is accelerating the demise of journalism.
What Demand does—answering consumers questions—“is not journalism,” said Rosenblatt. “The only people that call us journalists are journalists.”

However, Demand is starting to borrow more tactics from the journalism world, namely, launching a branded, advertiser-friendly company. Demand is set to roll out, a women-aimed site launched in conjunction with talk show host and former model Tyra Banks.
Plus, the company announced on Tuesday a new partnership with Food Network star Rachael Ray. As part of the new deal, Ray will produce content for Demand’s—specifically its food vertical.
Ray will also look to discover and nurture new cooking talent for the site that will star in a series of original series for
The company’s evolving media strategy, according to Rosenblatt, is to attract users to eHow and other properties by answering highly specific search queries, and then drive them to other branded channels, hoping they become loyalists. “We are constantly trying to figure out ways of bringing people in [and] give them a much broader experience on our network,” he said.
According to Rosenblatt, that effort’s been working; direct visits to have increased twice as fast as search, and more than 100,000 eHow articles have been shared on Facebook.
Besides Demand’s content plans, Rosenblatt also addressed the company’s often-criticized pre-IPO accounting practices, which amortized content costs over several years rather than the year that content was produced. Demand’s claim is that its content has a longer shelf life than most.
“Our accounting is not elective,” Rosenblatt said. “There is the right way to do it. We demonstrated through data that it would be wrong to expense content when we make it. That’s just the right way to treat an asset.”