History
Demand Media was co-founded in May 2006 by Richard Rosenblatt and Shawn Colo. Rosenblatt has a long history of building and selling Internet media companies. As CEO of Intermix Media and Chairman of MySpace.com, Rosenblatt was one of the innovators of Internet social networking. Colo is a financial acquisition specialist. He worked for 10 years in the private equity industry as a Principal with Spectrum Equity Investors specializing in media and communications companies.
Demand Media raised more than $355 million in financing over its first two years from investors such as Oak Investment Partners, Spectrum Equity Investors, Generation Partners and Goldman Sachs.
In June 2007 Demand Media hired Charles Hilliard, a former Morgan Stanley investment banker and United Online senior executive, as its President and CFO and acquired Byron Reese's how-to website, ExpertVillage.com of Austin, TX, for about $20 million. Reese became the company's Chief Innovation Officer and developed the algorithm that the company now uses to identify topics with high advertising potential. By 2008, Demand Media had acquired more than 30 domain name portfolios and owned 65 destination websites. Demand Media said that its 2009 revenue was nearly $200 million and that it was making a profit, but in fact the company had never been profitable.
In July 2008 it was widely reported that Yahoo! was interested in buying Demand Media for between $1.5 and $2 billion. Sources close to both companies said Yahoo! executives were attracted to Demand Media’s generation of advertising impressions and its ability to create niche social networks for media sites. Demand Media CEO Richard Rosenblatt later said that the company was not for sale. The deal never got past the talking stage. It was reported that Rosenblatt wanted a price closer to $3 billion for Demand Media.
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