Will Lance Armstrong fallout hurt Demand Media?
Thursday, October 25th, 2012
One of the risks disclosed in Demand Media’s S-1 has come true.
When Demand Media filed to go public in 2010 it disclosed a laundry list of risk factors for the company.
One of those risks was the reputation hit the company could take if any of the celebrities associated with its brands ran into trouble.
On page 20, the company disclosed:
“Poor perception of our brand, business or industry could harm our reputation and adversely affect our business, financial condition and results of operations.”
The last sentence of this paragraph lays it out on the table:
Furthermore, certain of our owned and operated websites, such as LIVESTRONG.com, are associated with high-profile experts to enhance the websites’ brand recognition and credibility. In addition, any adverse news reports, negative publicity or other alienation of all or a segment of our consumer base relating to these high-profile experts would reflect poorly on our brands and could have an adverse effect on our business.
Demand Media specifically mentioned LiveStrong.com in its S-1. Perhaps that was because it was its biggest celebrity-linked site at the time. But Lance Armstrong has been subject to doping claims for a long time. Calling out LiveStrong was likely more than a coincidence.
Now that the Lanced Armstrong brand has been significantly tarnished and he has been stripped of his Tour de France titles, will the damage extend to the LiveStrong brand?
It’s hard to say. Here in Armstrong’s home town of Austin the conversation is likely very different from elsewhere. It would be a shame if the good that has come from the charity of LiveStrong was halted.
Demand Media’s revenue from LiveStrong.com could be hurt by the latest news about Armstrong. Perhaps that’s why Demand Media didn’t partner with LiveStrong for the .livestrong top level domain. Perhaps it was concerned about the latest allegations and where they’d go.
For now, however, you’ll find plenty of great information about performance enhancing drugs on LiveStrong.com.