Demand Media considers spinning off domain name business
Tuesday, February 19th, 2013
Domain business might become its own company.
Demand Media, parent company of eNom and Name.com, is considering splitting its business in two.
The move would see its domain assets and online media business separated. The domain business would have annual revenues of $150 million+ with gross margins around 20%, and the media business would be $250 million+ with 30%+ margins.
Michael Blend will be working on the process of spinning out the domain business.
While the domain business is certainly heading down a different path than the media business, this move could create some complications.
The way Demand Media has reported its earnings in the past has been somewhat convoluted. Many domain industry watchers believe the company has been able to use the registrar revenue as a bedrock as the rest of the company caught up on the revenue side. Of course, not that the media business is large this isn’t as big of an issue.
Others have speculated that a big part of the content revenue the company has reported has been from domain parking, and it will be interesting to see this when split out in greater detail.
Additionally, Demand Media has argued that its domain business is key for collecting data used in its media business.
Another online media and advertising company, Marchex, is in the process of spinning out its domain business as well.