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Demand Media Plans To Go Public Through $125 Mln IPO

Santa Monica, California-based Internet content firm Demand Media, Inc., plans to go public through a planned initial public offering of up to $125 million of its common stock.

In its Form S-1 registration statement filed with the U.S. Securities and Exchange Commission on Friday, the company did not disclose any details about the number of shares to be offered, its estimated price range, or in which stock exchange if plans to list.

Both the company and the selling stockholders are planning to sell shares in the offering. The company intends to use the net proceeds from this offering for investments in content and general corporate purposes.

Demand Media, which generates substantially all of its revenue through the sale of advertising in Content & Media service offering and through domain name registrations in Registrar service offering, reported revenue of $198 million and $114 million, for the year ended December 31, 2009 and the six months ended June 30, 2010, respectively.

For these same periods, the company reported net losses of $22 million and $6 million, respectively, operating loss of $18 million and $4 million, respectively.

Demand Media, which has an extensive relationship with Google, Inc. (GOOG), derived approximately 18% and 26% of total revenue from various advertising arrangements with Google for the year ended December 31, 2009 and the six months ended June 30, 2010, respectively.

Demand Media's majority of the content published from January 1, 2008 through June 30, 2010 consists of text articles published to its owned and operated website, eHow. As of June 30, 2010, company's content studio had over 10,000 freelance content creators, who generated a daily average of over 5,700 text articles and videos during the quarter ended June 30, 2010.

Former MySpace Chairman Richard Rosenblatt is company's co-founder and has served as Chairman and Chief Executive Officer, since its inception in 2006.

Entities affiliated with Oak Investment Partners, Spectrum Equity, W Capital Partners, Goldman, Sachs & Co. (GS), Generation Partners each hold a notable stake in the company.

According to comScore, Inc. (SCOR), for the month ended June 30, 2010, Demand Media owned and operated websites comprised the 17th largest web property in the United States and attracted over 86 million unique visitors with over 550 million page views globally.

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