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Demand Media Reports Third Quarter 2012 Financial Results

Q3 2012 Business Highlights (1) :

  • On a consolidated basis, Demand Media ranked as a top 20 US web property throughout the first nine months of 2012, ranking as #13 in September 2012, up from #17 in January 2012. Demand Media's web properties reached over 125 million unique users worldwide in September 2012.
  • On a standalone basis, eHow.com ranked as the #13 website in the US in September 2012.
  • LIVESTRONG.COM/eHow Health ranked as the #3 Health property in the US in September 2012.
  • Cracked.com maintained its ranking as the most visited humor site in the US throughout the first half of 2012, with more time spent on the site than any other humor website. The Cracked Network, which includes IndieClick, ranked as the #1 Humor property in the US in September 2012.

(1) Source: comScore.

Operating Metrics:

       

Three months ended September 30,

2011         2012      

% Change

Content & Media Metrics:      
Owned and operated
Page views (1) (in millions) 2,527 3,363 33 %
RPM (2) $ 15.16 $ 13.49 (11 )%
 
Network of customer websites
Page views (1) (in millions) 5,046 4,965 (2 )%
RPM (2) $ 2.47 $ 3.78 53 %
RPM ex-TAC (3) $ 1.80 $ 2.70 50 %
 
Registrar Metrics:
End of Period # of Domains (4) (in millions) 12.2 13.7 12 %
Average Revenue per Domain (5) $ 10.20 $ 9.99 (2 )%

____________________

(1)

 

Page views represent the total number of web pages viewed across (a) our owned and operated websites and/or (b) our network of customer websites, to the extent that the viewed web pages of our customers host the Company's content, social media and/or monetization services.

(2)

RPM is defined as Content & Media revenue per one thousand page views.

(3)

RPM ex-TAC is defined as Content & Media Revenue ex-TAC per one thousand page views.

(4)

Domain is defined as an individual domain name paid for by a third-party customer where the domain name is managed through our Registrar service offering.

(5)

Average revenue per domain is calculated by dividing Registrar revenue for a period by the average number of domains registered in that period. Average revenue per domain for partial year periods is annualized.

Beginning July 1, 2011, the number of net new domains has been adjusted to include only new registered domains added to our platform for which we have recognized revenue. Excluding the impact of this change, average revenue per domain during the three months ended September 30, 2012 would have increased 1% compared to the corresponding prior-year periods.

Q3 2012 Operating Metrics:

  • Owned & Operated page views increased 33% year-over-year, driven primarily by strong traffic growth on eHow.com and LIVE STRONG.COM. Owned & Operated RPMs decreased 11% year-over-year, due primarily to page view growth from lower RPM properties and traffic sources, including growth in mobile traffic.
  • Network page views decreased 2% year-over-year to 5.0 billion, due primarily to lower traffic from our social media partners. Network RPM ex-TAC increased 50% year-over-year, reflecting higher revenue from our growing network of content partners, primarily YouTube.
  • End of period domains increased 12% year-over-year to 13.7 million, driven primarily by the addition of higher volume customers and continued growth from existing resellers, with average revenue per domain decreasing by 2%, due to a mix shift to higher volume resellers.

Business Outlook

The following forward-looking information includes certain projections made by management as of the date of this press release. The Company does not intend to revise or update this information, except as required by law, and may not provide this type of information in the future. Due to a variety of factors, actual results may differ significantly from those projected. The factors that may affect results include, without limitation, the factors referenced later in this announcement under the caption “Cautionary Information Regarding Forward-Looking Statements.” These and other factors are discussed in more detail in the Company's filings with the Securities and Exchange Commission.

Excluding up to $3 million of 2012 expenses that the Company expects to incur related to the formation of its generic Top Level Domain ("gTLD") initiative, the Company's guidance for the fourth quarter and fiscal year ending December 31, 2012 is as follows:

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