Demand Media Acquisition Rumors Heat Up Again. CEO Says No Way.

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Los Angeles based Demand Media, a sprawling network of content sites (that was a big part of a post yesterday on the end of hand crafted content), is rumored to be shopping itself to the big Internet companies. A couple of sources have told us that they’ve recently been talking with Yahoo, AOL and Google about an acquisition, and would like to exit for $1 billion or more.

Those rumors are false, says CEO Richard Rosenblatt via a phone call this morning. He confirmed that discussions have happened, but says it’s other companies that are initiating the conversations. “I’m so excited about Demand Media’s position in the marketplace and its prospects. Why the hell would I want AOL or Yahoo stock?” he said.

And he certainly has a point. The company says revenue rumors in the $200 million/year range aren’t far off (although last year the rumors were $250 million). They have 520 employees and Rosenblatt says they’ve always been profitable.

Comscore says they have nearly 53 million monthly U.S. visitors, putting them in the top 20 U.S. properties. Most of the company’s traffic goes to eHow. But other properties are growing fast as well. And substantial revenue comes in from eNom, a leading domain name registrar.

The company has raised $355 million to date. This is the kind of company that is likely to be acquired rather than go public, in my opinion. And most of the big players would love to get their hands on all this advertising inventory.

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