Interview: Demand Media’s Rosenblatt On Why He Isn’t Worried About Google

In late January, Google (NSDQ: GOOG) said it was working to ensure its search results were not overridden with links to spammy sites and so-called content farms. The timing could not have been worse for Demand Media (NYSE: DMD), which is widely considered to be the biggest content farm on the web and was set to go public the following week. The company couldn’t even defend itself because it was in a quiet period prior to its stock market debut.

Now that Demand Media has successfully gone public and reported its first quarterly earnings, CEO Richard Rosenblatt is on a mission to stand up for the content his company produces. In his first post-IPO interview, Rosenblatt told paidContent why he doesn’t think Google has Demand Media in mind when it talks about “content farms” and how, in any case, the company is becoming less dependent on traffic from the search engine. He was joined by Steven Kydd, EVP-Demand Studios. Read on for edited excerpts from the interview.

paidContent: You were in your quiet period when Google said it wanted to peel out some ‘bad results’ (from content farms). How would you have responded?

We really want to let Google speak for themselves. Whatever Matt Cutts and Google want to (say) about quality we totally support that because again that’s their corporate interest. What we said and would have said is we applaud Google removing duplicate content … removing shallow, low quality content because it clogs the search results. Both we and Google are 100 percent focused on making the consumer happy. It’s the right thing to do and it’s good for our business.

So when Google was referring to ‘”content farms” in their message it wasn’t referring to companies like yours?

I think content farms have become such a general term that everyone is just throwing around. You know content farms could be automatic, non-human content that scrapes other people’s articles like ours, steals them, and publishes them. So, I mean, I don’t know what they define content farms as. We don’t see ourselves as one.

Have you gone to them and asked them to make sure they’re not referring to you?

If you talk to Google and we talk to Google all the time you will see that Google, if they have a problem with somebody like JC Penney they’re pretty obvious about it. They specifically say it. If they have a problem, they come out and talk about it.

Some of the screenshots of content farm-like results in their most recent blog post on the subject did seem to be targeting articles you find on eHow, for instance.

If you look at the data, after they had that big announcement, which happened during the IPO and then they made the changes, our traffic, as you saw from recent results, went up. I don’t know what they were referring to. What we create is created by consumer demand and touched by 14 humans. I don’t know how we would be a content farm if Wikipedia is not, is not. Humans make our content.

What happens if the company you’re most synergistic with turns you off? Is that something you think about? Do you have to make sure you have other revenue that isn’t reliant on this synergy with Google?

That could happen but it would be against their best interest and the consumer’s best interest. It’s kind of like Zynga just got a $9 billion valuation. Facebook could turn them off at any time. The iPhone could have been turned off by Verizon or AT&T (NYSE: T). There are a lot of synergistic partnerships that make sense for both parties that last a very long time.

We are diversifying our traffic because the internet is moving that way. We’re aggressively focusing on diversifying traffic. We had 100,000 individual eHow articles receive traffic in December alone just from Facebook. We receive traffic from Twitter. We receive traffic from Digg. We receive traffic from all across the web. We receive direct traffic and traffic from apps like Livestrong. We are naturally diversifying our revenues — not because we’re afraid of Google but because that’s where people are spending their time.

Is mobile a next frontier for you or are you already deep in it?

Mobile, international, video we think those are a lot of frontiers. We’re going to move to where the consumers are moving and the consumers are moving to mobile. I thought it was a pretty neat statistic that (Livestrong’s calorie-tracking mobile application) was now the number one health and fitness app on the iPhone. We’re definitely moving into mobile. No question. We’re bringing on a senior person relatively soon to focus on mobile and we’ll start to really build and expand our strategy.

You recently announced a partnership with Tyra Banks to launch a beauty and fashion site. How many celebrity-brand centric channels do you want to ultimately have?

We believe in fashion and beauty. There is a big opportunity there. We can become one of the top players in that category. The data told us that. As the data tells us there are other verticals we should tie celebrities to we will get into it. I don’t know how many. It could be as many as dozens or just few it just depends on what the data tells us.

You mentioned on the call that you’re about to introduce a new ‘curation layer’ on your sites. Can you elaborate?

It is the idea of using (something like) Facebook … as a way to give a feedback loop on whether consumers like our content or not. We’re going to test it out. (An) example is the new eHow will have a helpful or not helpful very simple feedback loop. So, if we see that a lot of consumers see a piece of content is helpful, great. If we see a lot of consumers don’t see it’s helpful that will allow us to send it back to the studio and fix that piece of content.

You once led MySpace and sold it to News Corp (NSDQ: NWS). You look at where you are right now and you look at where they are now. What’s your reaction to the idea that basically News Corp. doesn’t see a value in it now?

That’s obviously sad. You know all of us that were involved in MySpace put a lot of pride in that and when we did sell it there was nobody even close. You remember it was top of its game. Facebook was just getting started. I left, I consulted for six months, and then started this company. And, you know, whatever went wrong there went wrong. I’m not going to be an armchair general and second guess the decisions we made, but it’s sad to see. What is different here is we are not selling Demand Media. We took it public, we’re getting to scale, and we want to really go after this market because we think the opportunity is that big.