Demand Media Turns Profit in Q2

Company raises outlook, revenue up 17 percent

Demand Media had reason to be upbeat this afternoon on its earnings call, as the company exceeded earnings expectations with revenue up 17 percent in the second quarter of the year. The company also turned a modest profit for its first quarter ever as a public company and announced the promotion of Michael Blend to president and COO.

Richard Rosenblatt, chairman and CEO of Demand Media, said in a statement that the company will continue to expand its content platform into mobile, video and international channels. "We also see significant opportunities in the new generic Top Level Domain process and invested over $18 million in Q2 in what we believe is a seminal event for the Internet and our leading registrar."

During the call, Demand stressed the high returns of its video initiatives, which it noted were much higher than text content. Rosenblatt said that as long as the traffic to Demand's YouTube channels "continues to grow, we believe it can be a sustainable business."

For Demand, pageviews are up 30 percent year-over-year, with Rosenblatt praising the efforts of and in drawing clicks. Demand also noted that Google referrals to eHow are down to 51 percent of traffic relative to 59 percent in 2011, an interesting tidbit as Demand continues to evolve and shed its image as a search-driven content farm.

Looking toward the future, Demand updated its revenue projections slightly after beating estimates to a range of $355.5 million to $359.5 million (previously: $347 million to $353 million). 

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