Is Demand Media’s CEO Going Hollywood?

Demand Media, the company some have criticized as an automated “content factory” because it uses algorithms to help produce content that might appeal to advertisers, is widely rumored to be heading for an initial public stock offering that could value the 4-year-old startup at more than $1 billion. Has all that talk gone to CEO Richard Rosenblatt’s head? Some of his recent tweets — as well as some news about a couple of high-profile additions to the Demand board of directors — suggest that he might be going a little Hollywood. One of the new faces in the boardroom, for example, is Peter Guber, the former head of Polygram and former chairman of Sony (S sne) Pictures, who gave us blockbusters such as “Batman” and “Flashdance.”
So what does a former movie studio chief bring to a venture like Demand Media? The company does video production through its Demand Studios unit, but its focus is primarily on short pieces that can either get quick hits on YouTube or instructional videos that fit with its content at sites such as — how to replace a toilet, and so on. Not exactly Hollywood-style entertainment (Demand also has a written-content arm that produces hundreds of stories a day, and owns a media-publishing tool called Pluck). In a press release issued by Demand announcing his appointment, Guber says:

As someone who’s always understood the power of the narrative for attracting audiences, I believe Demand Media has discovered a new and largely untapped story telling platform on the web. As part of its Board, I look forward to helping unlock this value and drive innovation online, using the insight and experience I bring from the entertainment industry.

But as paidContent noticed, the connection with Guber goes a little further than just a seat on the board: Rosenblatt also mentions on Twitter that he and Guber had breakfast on Sunday, followed by a tennis game with the Hollywood mogul, as well as someone named Semel — likely former Yahoo CEO Terry Semel, also a Hollywood studio veteran.

Rosenblatt also mentions in recent tweets that he had dinner with film producer Brian Grazer and comedy legend Rob Reiner at Nobu the night before (Nobu is a famous Hollywood hangout), and promises to “get Brian on Twitter tomorrow.” The Demand CEO also apparently spent at least part of the evening debating the value of the iPad with former supermodel Cindy Crawford (he adds later that “cindy did not like the iPAD and i did; she thought just a big iphone with no service; i think convenient and travelable”). The socializing may not be all that surprising, considering Demand is based in Los Angeles, but it still seems like an odd pairing, that of the company that’s commoditizing media from all angles and the old media veterans whose margins are rapidly dwindling as a result of that same process.

Previous articles about Demand have mentioned the CEO’s penchant for hanging out with stars and starlets such as former bikini model and “Dancing with the Stars” emcee Brooke Burke, as well as Tour de France winner Lance Armstrong. Both also have connections to Demand — Burke’s site Modern Mom uses content produced by Demand Studios, and her partner in the company is Lisa Rosenblatt (Richard’s wife), while Armstrong is an investor in Demand, which provides content for his site.
Is any of this going to help Demand Media ring up a billion-dollar IPO, or create a sustainable business from its automated content-generation process? That’s hard to say. But it sure sounds like a fun life for the company’s CEO. And just to show that he’s not all play and no work, Rosenblatt notes on Twitter that “silly people keep saying demand media is ‘reviled;’ NO ONE who knows us has ever said that so its odd that it keeps showing up,” and adds later that “100mm people/month love our properties, 7,000 freelancers/month love making a living; oh yeah, and our 450 branded partners love our tools.”
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Post and thumbnail photos courtesy of Flickr user Echo29