"Under Google’s new algorithm, code-named Panda, companies that produced lots of content got penalized"<p>Hahaha! Yeah, let me fix that for you: "companies that produced lots of <i>useless, worthless, trash</i> content got penalized".<p>Good for Google, good for everyone, screw Demand media for ad-filled "content farms" on crappy domains like 3d-blueray-players.com".<p>Even eHow and Livestrong are borderline spammy, although they do have enough <i>good</i> content to make them popular (and they are).<p>Should've focused on quality content while they were a $2 billion company instead of whining about it now.
This falls into the broader category of stories "Don't build a business that is wholly dependent on another business" of which we hear variations here on Hacker News (such as "Don't build your whole business around the API of another business.") Demand Media was far too reliant on its ability to manipulate its rankings in Google.<p>We had a similar opportunity. We built Accumulist in 2006. We wanted stories posted to Accumulist to do well at Google, but we succeeded way beyond our expectations. Something about the structure of Accumulist hit the sweet spot of whatever algorithms that Google was using during 2006. Any article posted to Accumulist jumped to the front page of Google. Accumulist had an API so outside bloggers could ping it with their stories, and generally, for any story posted to Accumulist, the page that got ranked in Google was the page on Accumulist, rather than the original page on the blog.<p>For us, at the time, Accumulist was one of many projects we were working on. It was an unexpected hit. We did think about making it our full time focus. I was in favor of expanding it. However, my partners were against it. At one point we were working with an outside consultant whose advice I greatly respected. He said, "The business plan can not consist soley of 'Accumulist ranks high with Google.'" And that was a good argument.<p>For businesses like Demand Media and Accumulist, I think ranking highly with a search engine can only be the beginning of a process. If that's all you've got, then quit. There has to be something else you can do, something to add to the process, something real, that gives your business independence from the other business that you are initially depending on. Otherwise I think you are building your business on sand, and its only a matter of time before it washes away.
"The freefall of Demand serves as a cautionary tale for hype in the Internet age: No company burns so hot that it can’t cool off."<p>What a crock - what cautionary tale? A company that grew really fast, is still producing lots of cash, and is already public? Companies rise and fall and are dependent on lots of other forces. Airbnb could crash any time if cities decided they don't want it (I doubt it will), same with Uber, and TONS of companies are in some way dependent on Google not shutting them out.<p>Seems like this was a pretty crappy business with extremely low value added to the world, but it's so obnoxious to hear every single company that starts to decline or doesn't grow the way we thought it would as a "cautionary tale". Companies grow, companies die.
'Content Farming' was a cynical, manipulative business model. Frankly, we should all be glad that Google found a way to kill it. Some 'innovation' needs to be culled from an ecosystem occasionally to allow higher forms of life to not be starved. Pruning the deadwood is the proper method of 'farming' content when you are intent on producing high-quality, IMHO.
And I couldn't be happier to hear it.<p>Demand Media is a business that was about making money, not creating user value. They were essentially a parasite on the attention economy. It's no shock to me that the chairman of MySpace went on to create another business that turned out problematic.<p>I can only hope that GoDaddy is next to falter, but it appears to be run by a more cunning set of predators.
There is something a bit ironic about Variety, a legendary media giant of more than 100 years that was sold in a fire sale in 2012 to an entertainment blog network, writing about the downfall of another online media outlet.<p><a href="http://mediadecoder.blogs.nytimes.com/2012/10/09/in-a-fire-sale-penske-media-buys-variety/?_r=0" rel="nofollow">http://mediadecoder.blogs.nytimes.com/2012/10/09/in-a-fire-s...</a>
I recently read an article at the Harvard Business review that very much proves why Demand Media didn't last.<p>It's called "Three Rules for Making a Company Great."<p>The first rule is:<p>1. Better before cheaper<p>Demand Media severely violated rule number 1. They were all about cheaper before better. Their entire business model seemed to be about producing as much low quality content as possible. No wonder Google wanted to penalize them.<p>Think about this: If Demand has built their empire on producing super-high-quality articles, they would have had Google as an ally, instead of a threat. Google would have done what it takes to make sure they stuck around. Because Google wants high quality content. Instead, they abused Google's search engine, generating as much content as they could -- with very little focus on quality.<p>It is fortunate that many companies today are focusing on quality first. The fate of Demand Media is a good lesson for us all.<p>If we want to build something that lasts, we'll have a much easier time if we're building something that people actually want to stick around.<p>Who thinks the "content" produced by Demand Media is worth fighting for?<p>Their investors. Anyone else? I highly doubt it.<p><a href="http://hbr.org/2013/04/three-rules-for-making-a-company-truly-great/" rel="nofollow">http://hbr.org/2013/04/three-rules-for-making-a-company-trul...</a>
I treat complaints from content farms that produce low-quality content kind of like I treat complaints from real farms that produce low-quality food. People will stop buying your stuff because they know it's worse than competing offerings, so don't blame Google for giving you less prominent placement on the homepage, and don't blame the grocery store for giving you less prominent placement on the shelf.
"These “domain parking” pages were immensely profitable, generating north of $100,000 per day, according to a former Demand exec who requested anonymity. “That’s $35 million-$40 million per year without doing any work,” the exec said."<p>Separate point domain parking pages (have much experience here) have fallen greatly over the years. Portfolios of pages used to sell for multiples of future earnings as people didn't realize how mercurial that situation was. Once again your destiny is determined by a few big players who have very little transparency (and in all honesty their own issues with fraud to deal with).<p>I have seen parked domains that earn perhaps 1/5 to 1/10th of what they did in the last decade. (As one example a domain related to mortgages used to earn perhaps $500 per month back during the boom and now I'd be lucky to get $50).<p>Not only that but both yahoo and google can ban a domain parked page if they feel there are fraud clicks. You don't get a reason and there is practically no accountability or appeal process.
As someone that produces content, I am pleased that Hummingbird is moving into the direction of higher-quality content, with appreciation for long-form content.<p>I am not pleased with all the stuff we have to do with Google+ such as authorship.<p>So yes, SEO is changing for the better but I don't think anyone believes Google is doing it solely for user experience.
Funny that this completely fails to mention that in addition to being a registrar (eNom), they've spent tons of cash on new TLD's and are operating a registry with around 20 or so TLD"s.
Two clear flaws with this business:<p>(1) They were built on another business - see Michael Porter's supplier power. If you need one company too much, you face a lot of tail risk. Of course, there's nothing wrong with starting this way. In fact, being focused can be the best way to prove an in idea, get money (revenue or risk capital) and scale to other platforms.<p>(2) They did not add value. In effect, Demand Media was an arbitrage of digital adspace. Arbitrages get spotted and, eventually, disappear or diminish.<p>The dependency on another business & the lack of value add makes me wonder how they got as big as they got and just why they did not fail sooner. Of course, I hate to see any companies fail, given the risks of entrepreneurship & positive economic benefits (it makes the economy antifragile).
Free plan for anybody looking for something to do: start an open-culture content farm. Demand Media's major strength is a way to match underserved searches with cheaply written content.<p>They (and other content farms) could be crushed by a Wikipedia-like project that fills the same user needs. It's hard to compete with free labor, especially when that free labor uses the lack of time constraint to produce high-quality content.<p>The main trick is to figure out how they're finding underserved searches, so you can establish a good feedback loop between readers and contributors.
To counter many of the points made here, nothing lasts forever. Some businesses are built for the ages, others are not. There's nothing wrong with doing something that makes money for a while if you provided same value in the process. I am sure the founders and early investers did well and they still have a business valued at a quarter billion!
Epic Fail?<p>I didn't see it in the article, but how much did the founders/investors walk away with? If they walked away with a tidy fortune of cash (which I suspect they did), then no: Not an epic fail. An epic win!
Wired article from three years back: <a href="http://www.wired.com/magazine/2009/10/ff_demandmedia" rel="nofollow">http://www.wired.com/magazine/2009/10/ff_demandmedia</a>