Demand Media files for IPO, with Goldman the lead banker.
Demand Media, the parent company of eNom, has filed to go public and raise up to $125 million. I’m reading through the S-1 as we speak, so this article will expand. Here are some of the details:
-The company generated $198 million in revenue last year, and $114 million through the first 6 months of 2010
-The company reported a net loss of $22 million last year and $6 million through the first 6 months of 2010
-It had $33.5 million in cash at the end of June, and total assets of approximately $469 million.
-Registrar revenue for the first six months of this year was $47.7 million; content & media revenue was $66.3 million
-The company depends on Google for its ad revenue, with 26% of its revenue in the first half of the year coming from Google. Demand’s agreement for parked domains expires in the first quarter of 2011 and for developed sites ends in Q2 2012
-In addition to relying on Google for much of its revenue, a risk factor is that Google will compete more with the company in content creation
-40% of page view traffic to Demand’s own web sites in Q2 2010 came from search engines
-21% of company’s revenue in first half of this year came from eHow — and 60% of eHow’s traffic last quarter came from Google.
-A risk factor is perception of brands — one example is the Livestrong.com brand, which could take a hit if Lance Armstrong’s reputation does.
-Risk factor is liability with its portfolio of domain names, which may infringe on others’ trademark rights (although the company says it screens for that).
-Domain registrations accounted for 37% of total revenue in first half of year. Renewal rate on domains is 73% this year, but was 69% all of last year.
-If rules for acquiring expired domain names change, it could hurt the company
-The company uses your domain name look-ups for its own purposes: “In providing registration services for over 10 million domain names, our Registrar resolves an average of over 2 billion domain name system queries per day. Our Registrar also serviced, on average, more than 3 million domain name look-ups per day from potential customers seeking to register new websites or purchase existing domains during the first six months of 2010. These queries and look-ups provide insight into what consumers may be seeking online and represent a proprietary and valuable source of relevant information for our platform’s title generation algorithms and the algorithms we use to acquire undeveloped websites for our portfolio.”
-In case you didn’t know this already, Demand Media owns “Acquire This Name”. Here are all of the company’s subsidiaries.