Demand Is Strong For Demand Media IPO

Content farm Demand Media’s stock officially debuted on the New York Stock Exchange under the ticker symbol “DMD” after its IPO, in which it raised $151.3 million and was valued at just under $1.5 billion.

And on its first day as a public company, Demand Media’s stock is performing well. The stock is up 36 percent from an initial pricing of $17 to $23.

Demand Media has been pursuing a content and media strategy of creating search-friendly articles and videos for its network of sites including eHow and many niche sites. It should be interesting to see if taking the company public will help increase its profile and give it currency to expand via acquisitions.

In 2009, Demand Media reported $22 million in losses on $198 million in revenues. In the first nine months of 2010, ithe company reported a net loss of $3 million, on revenues of $179 million.

It’s important to note that Google is changing how it ranks certain websites, including Demand’s network of content. Demand is highly dependent on Google search traffic and no doubt a change in ranking could negatively effect the content farm’s business.