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In an age when content is considered king, it seems Demand Media has divine right. In its fourth-quarter earnings report, released today, Demand announced a strategic split into two publicly-traded companies may be in its future. One of these potential companies would focus on content, the likes of which fills its pages at eHow.com and Livestrong.com, while the other would offer website registration.
Revenues in 2012 were 17 percent higher than the previous year, topping $380 million, bringing the year’s net income to $6.2 million. This, combined with the acquisition of domain registrar Name.com, contributes to Demand’s desire to dedicate more focus to that division of its business. “We plan to continue reinvesting our strong cash flows into long-term growth opportunities, such as our gTLD [generic top-level domain] initiative as well as growing and diversifying our content offerings,” said Demand CFO Mel Tang, per the report.
Demand’s Board of Directors has approved plans for the two companies to separate via tax-free spinoffs. This would take place over the next nine to 12 months, according to SoCal Tech.
“If approved, the separation will facilitate better operational and strategic flexibility, enabling each business to focus on its distinct priorities and growth opportunities,” said Demand Media Chairman and CEO Richard Rosenblatt.
Visit Demand Media’s website, check out their BILA profile, and follow them on Twitter at @demandmedia.
