What Happened To Demand Media’s Traffic?

Take a look at the Quantcast traffic data for Demand Media, the VC-backed online content creator that on Friday filed for a $125 million IPO:

The massive drop-off occured a few days prior to the IPO filing, and has stayed consistent over the past two days of Quantcast reports. It certainly could be an error — the fall is not mirrored by “indirect” traffic analytics groups Compete or Alexa — but let me offer an alternate (and unsubstantiated) theory: Google changed something in its search algorithm to lower the demand for Demand.

Why would “don’t be evil” Google do such a thing? Perhaps because Google is toying with the idea of getting into Demand Media’s business. Not only did Google recently apply for a patent for “identifying inadequate search content,” but Demand’s own S-1 raises the specre of competition:

Google’s access to more comprehensive data regarding user search queries through its search algorithms would give it a significant competitive advantage over everyone in the industry, including us. If this data is used competitively by Google, sold to online publishers or given away for free, our business may face increased competition from companies, including Google, with substantially greater resources, brand recognition and established market presence.

That passage was spotted by Matthew Ingram, who then wrote the following:

It’s worth noting that the “risk factors” section of an IPO filing is designed to lay out every possible threat to a company, no matter how small or unlikely. So the simple fact that Demand refers to Google competing with it is no guarantee that this will actually come to pass — and even if Google does decide to follow through on what it describes in the patent, it could decide to work with Demand rather than going into direct competition with it. It’s also true that Google has plenty of other ways of causing trouble for Demand, including devaluing the company’s commodity content by tweaking its algorithms.

From looking at the Quantcast chart, maybe those tweaks have already occured…

UPDATE: A Demand Media spokeswoman declined to comment, saying that the company was in a pre-IPO “quiet period.” A spokeswoman for Quantcast said that Demand Media’s “measurement tag had fallen off” — although she was unsure how or why that happened. I followed up by asking why, if the tag was off, was Demand still showing more than 1 million daily visits. Her reply, via email:

It looks like a measurement tag is off at the moment – which could be do to them making some modifications to their site. I think you’re looking at Demand Media’s Network traffic in total – which is why you see traffic still being reported. That encompasses many sites.

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18 Comments

  • Dan -

    Good spot. It would be interesting to know how high up the list that particular risk factor is (would check, but don’t have time) Securities lawyers usually advise that risk factors be ordered to roughly reflect the relative likelihood and/or potential severity of the risk. If this is one of the top five, then you can be sure this is top-of-mind for DM’s management and disclosure counsel as a “real” risk.

  • [...] PE Hub spotted that traffic as reported by Quantcast to the Demand Media group had taken a dive. [...]

  • At least their install base is increasing, google would be hard to prevent that.

    http://trends.builtwith.com/ads/Demand-Media

  • Seems to me they just removed their Quantcast script from ehow.com . Or they broke it. That would normally be about 67% of their traffic. Have a look at ehow’s traffic to see what I mean:

    http://www.quantcast.com/ehow.com/traffic/

  • [...] Primack / PE Hub Blog:What Happened To Demand Media’s Traffic?  —  Take a look at the Quantcast traffic data for Demand Media, the VC-backed [...]

  • [...] Google may tweak its algorithm to penalize content farms, as is being suspected [...]

  • Removing the tracking code from Quantcast could explain the precipitous drop, but doesn’t explain why Compete.com is showing a drop in recent months as well:
    http://siteanalytics.compete.com/demandmedia.com/

  • No pun intended, but I wouldn’t put too much stock into the Quantcast numbers. I used to have the tracking pixel on my site. The company showed me as a verified site for awhile after it was gone even though the company alerted me to it being gone. They thought it was an accident that I removed it. The site now shows as “rough estimates” and that is being kind as the numbers are so far off. Compete’s data is somewhat closer.

  • DemandMedia is just creating mindless blog spam. If Google can replace some of the worthless content of this bottom feeder, we will all be better off.

  • Ed, your looking at just one domain (demandmedia.com) when this article is about traffic throughout the whole of Demand Media’s Network (cracked.com, ehow.com).

    Dan, remember when Google Knol launched and everyone thought it would eat Wikipedia’s lunch? Wel..

  • [...] as well as has stayed unchanging over a past dual days of Quantcast reports,” observes Dan Primack. “It positively could be an blunder a tumble is not mirrored by indirect” trade [...]

  • [...] peHUB » What Happened To Demand Media’s Traffic? [...]

  • [...] peHUB » What Happened To Demand Media’s Traffic? [...]

  • [...] peHUB » What Happened To Demand Media’s Traffic? [...]

  • I guess that Google forgot their own IPO and angry investment bankers that have tried to talk them off Dutch Auction. 6 years later Google is using same tools that have been used against their own IPO. Perfect example of Dance With Devil

  • @realist: “DemandMedia is just creating mindless blog spam”

    As someone who writes for DM, I take offence at your blanket statement. Granted, some of the content isn’t great but most is copy-edited and based on quantifiable research sources. Let me say that it takes a great deal longer to write an article for DM than it does for mindless idiots like you to throw out pithy insults.

  • [...] about Demand’s traffic, which appears (based on some rankings) to have dropped sharply. According to an analysis by peHUB, which looked at Quantcast data, traffic to the company’s various web properties (which [...]

  • [...] Dan Primack from PEHub noted a huge traffic drop-off, using data from Quantcast, although he did add that other analytic [...]

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