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.