We've been following the Demand Media story with intrigue over the last few years, as it has proven to be the highest profile example of how a site can truly game Google, and make a business out of it, only to have that backfire at the hands of a Google algorithm update.
On the content side of things (as opposed to Demand Media's domains business), the company had perfected figuring out what people are searching for on Google, and crafting content (cheaply) to cater to those searches. The result was the ultimate content farm with an answer for pretty much everything. The problem was that the quality wasn't always there, and Google responded.
Demand Media (mostly by way of its eHow site) was certainly not the only contributor to the content farm epidemic, but it was the most obvious. Interestingly enough, the initial Panda update didn't even hit Demand Media. But eventually it did, and with a vengeance. I won't rehash the entire story, as you probably already know it. If not, peruse our coverage.
Earlier this year, the company revealed that it had once again been negatively impacted by Google algorithm changes, and CEO Richard Rosenblatt stepped down from the company. Demand Media's most recent earnings report once again showed a decline in revenue thanks to a loss of search referrals.
Variety (of all publications) recently put out a big piece about the company, which is now getting some attention from the tech media, calling the "rise and fall of Demand Media" an "epic fail."
"The freefall of Demand serves as a cautionary tale for hype in the Internet age: No company burns so hot that it can’t cool off," writes Andrew Wallenstein.
This comes at a time when such a tale deserves the spotlight, because Google isn't the only one businesses have to worry about.
Facebook, as you may know, has updated its News Feed algorithm, like Panda, to promote what it deems to be high quality content, and whether or not that means less referrals for Demand Media (I guess we'll see what happens in the next earnings report), it can have a similar affect on any site that has been relying on Facebook for traffic.
Already in the short time since Facebook announced the changes, brands have seen major drop offs in their organic reach. Facebook wants them to pay for visibility. But what about media sites? Facebook claims that it wants to deliver in depth articles, but as we've discussed, that may only be for the select few that Facebook wants to give special treatment.
It will be very interesting to see where sites like Demand Media's fall into that.
Image: Demand Media