10 Interesting Things We Just Learned About Demand Media

byron reese demand media

Photo: Demand Media

Demand Media, the controversial content farm company, just had a successful IPO.BusinessWeek’s Felix Gillette just wrote up a great profile of the company, in particular their interesting CIO Byron Reese, whom we hear less about than Demand’s media-facing CEO Richard Rosenblatt.

Here are some highlights.

Demand is BIG: it publishes 5,000 articles and videos PER DAY, from 13,000 freelancers

Demand's average revenue per user is just $1.60

That's versus $24 for Google and $124 for Amazon (and about $4 for Facebook).

Byron Reese, Demand's Chief Innovation Officer and the inventor of the content farm model, seems like a kooky -- and awesome guy

Reese is an avid deer hunter, fan of Byzantine history, and recently visited North Korea. According to his official bio, he started his first company in college. The business? 'Elaborate practical jokes.'

Here's what people who worked with him said about him: 'He's an idea generator, the guy just has a gazillion ideas'; 'He comes up with off-the-wall ideas and then he executes them.'

We'd love to buy him a beer.

Demand Media didn't actually invent the content farm idea, it got into it by buying Reese's company PageWise in 2007

They ended up selling $3 million of jewellery per year. Not bad for a sideline.

The biggest moneymaker, though, was santamail.org, which sold parents personalised letters from Santa for their kids

Each letter was postmarked North Pole, Alaska, and sold for $9.95.

The margins were huge and the business was a 'cash machine.' No kidding.

The Santa myth strikes again!

Another early experiment was happynews.com, which aggregated positive news stories from around the web

It was popular but critics mocked it. The Washington Post called it 'Prozac for the web.'

We love the idea, though.

Article topics picked by machines make 5X more money than the article topics picked by humans

That was in an earlier story by Wired on the company, which we'd read, but we'd forgotten that tidbit, so thanks to BusinessWeek for including it.

We already knew this, but it's worth noting that Demand makes half its money from domain name registration, not content, and still loses money

Want to make money on the internet? Demand's Reese has a tip for you: buy tons of old, public domain books and turn them into websites

For example, by working a few hours, you could take an old Creole cookbook and turn it into the best site for Creole recipes, and make money from Google ads for cooking-ware. One site might not make you tons of money.

But a thousand would.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.