Just in time for your reading pleasure, local Santa Monica company Demand Media has filed its S-1 with the SEC. First off, CEO Richard Rosenblatt and his team should be congratulated on making it to the IPO stage. There are plenty of startups out there who will never even get off the ground far enough to contemplate an IPO.
However, there has been some concern over the fact that the Demand Media business isn’t profitable, at least not yet. This is the first look into the finances that anyone outside of the company has had, so it lays open to inspection some of the issues that the company may be experiencing.
First off, last years revenues of $198 million still resulted in a loss of $22 million overall. So far this year, the numbers aren’t looking much better: $6 million in losses with $108 million in revenue (through June of this year). Although Demand Media is probably best known for its content generation for such sites as eHow.com, that isn’t where it gets the bulk of its revenues from. It seems that its domain registration business, eNom, accounts for 44 percent of the revenue so far this year.
There is still a lot of information missing from this initial filing, such as how much money the company intends to raise and what it has in mind for a starting price on its stock. We do know that the company has received $335 million in funding to date, since its inception in 2006.
Finally, I’ll close with this clip of Demand Media’s founder and CEO describing their business model:
