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Content Farm Company Demand Media to Go Public

Santa Monica-based content farmer Demand Media has announced its intention to go public. In what may be the first IPO of 2011, Demand Media will offer up 7.5 million shares in an effort to raise up to $138 million in capital. Underwriters Goldman Sachs and Morgan Stanley seem to think the company could be worth up to $1.3 billion.

Not everyone is convinced, citing Demand‘s over-reliance on Google for ad revenue.

Scout Analytics senior vice president Matt Shanahan spoke to FOLIO last year about Demand: “If you take what they say about uniques–86 million–and break down revenue per user, that’s $1.60 per user. Look at how many page views they have over a year and how many users they have to accumulate over time. All it takes is an SEO engine to change their algorithm and they lose their traffic.”

Yeah, think we’ll be investing elsewhere… Ah, who are we kidding. These days, we’re not investing in anything that isn’t food or rent.

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