Demand Media® (NYSE: DMD) today announced the acquisition of Creativebug, the go-to source for high-quality, online video art and craft instruction. Creativebug’s network of exceptional designers and library of educational videos complements the crafts-related content on Demand Media’s eHow web property. The acquisition will accelerate Demand Media’s expansion into e-Learning. “We’re seeing a ‘disruption and reinvention’ in the way that people are learning new skills. They are increasingly going online to learn both practical and creative skills, and we believe this convergence has huge potential,” said Joanne Bradford, Chief Marketing and Revenue Officer, Demand Media. “Instead of browsing at a bookstore or attending a class at the local community college, people are going online to learn from a world-renowned expert at a time that fits their schedule, accessing online videos from their smartphone, tablet or desktop.” “Creativebug masterfully leveraged the e-learning and craft trend in the emerging ‘Create it Yourself’ movement to become a leader in this market,” added Dan Brian, Executive Vice President of Media. “We’ve seen interest in craft-related content on eHow grow more than 20% on average every year over the last three years. We’re sprinting to keep up with demand, adding 29% more video content over the same period. Millions of people who visit eHow every month will be able to access Creativebug’s video workshops led by the top artists and designers in the world. We’re thrilled to add the passionate Creativebug team to the Demand Media family.” “Creativebug represents a community of true believers. From our employees to our customers and instructors, everyone at Creativebug has experienced firsthand the obsession and addiction of being an artist/designer/crafter,” said Jeanne Lewis, Founder and CEO of Creativebug. “We take pride in doing everything thoughtfully, from filming high quality videos that illustrate the exquisite detail of hand-stitching to hand-delivering donations to our favorite local causes. We decided to join Demand Media because they care deeply about content and communities, and we are glad that we can offer our instructors a broader platform to reach more people.”
Growing Market OpportunityThe worldwide e-learning market is estimated to be about $91 billion (1). In the US alone, the craft market has become a $30 billion dollar (2) industry and more than 58% of all households have crafted at least once in 2011 (2). Demand Media has seen the consumer demand for e-learning and renewed interest in the contemporary crafts reflected in eHow’s metrics. In 2012, eHow.com attracted almost 50 million visitors (3) who viewed more than 100 million pages (3) in the top craft categories of knitting, sewing, jewelry-making, wood-working and more. (1)IBIS Capital, Global e-Learning Investment Review January 2013 (2)Craft & Hobby Association, CHA Attitude & Usage Study Update, June 2011 (3)Internal company data About Creativebug Based in San Francisco, Creativebug is the go-to source for online video art and craft workshops featuring some of the most well-respected designers in the craft word. Users can pay per class or get a subscription for unlimited classes to learn the art of sewing, knitting, jewelry-making, printmaking and more. About Demand Media Demand Media, Inc. (NYSE: DMD) is a leading digital media and domain services company that informs and entertains one of the internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers, individuals and businesses to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information about Demand Media, please visit www.demandmedia.com Cautionary Information Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements involve risks and uncertainties regarding the Company's future financial performance, and are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Statements containing words such as guidance, may, believe, anticipate, expect, intend, plan, project, projections, business outlook, and estimate or similar expressions constitute forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Potential risks and uncertainties include, among others: our ability to successfully integrate Creativebug and expand into e-learning; changes in the methodologies of internet search engines, including ongoing algorithmic changes made by Google as well as possible future changes, and the impact such changes may have on page view growth and driving search related traffic to our owned and operated websites and the websites of our network customers; changes in our content creation and distribution platform, including the possible repurposing of content to alternate distribution channels, reduced investments in intangible assets or the sale or removal of content; our ability to successfully launch, produce and monetize new content formats; our ability to diversify into new initiatives such as paid content; the inherent challenges of estimating the overall impact on page views and search driven traffic to our owned and operated websites based on the data available to us as internet search engines continue to make adjustments to their search algorithms; our ability to compete with new or existing competitors; our ability to maintain or increase our advertising revenue; our ability to continue to drive and grow traffic to our owned and operated websites and the websites of our network customers; our ability to effectively monetize our portfolio of content; our dependence on material agreements with a specific business partner for a significant portion of our revenue; future internal rates of return on content investment and our decision to invest in different types of content in the future, including premium video and other formats of text content; our ability to attract and retain freelance creative professionals; changes in our level of investment in media content intangibles; the effects of changes or shifts in internet marketing expenditures, including from text to video content as well as from desktop to mobile content; the effects of shifting consumption of media content from desktop to mobile; the effects of seasonality on traffic to our owned and operated websites and the websites of our network customers; our ability to continue to add partners to our registrar platform on competitive terms; our ability to successfully pursue and implement our gTLD initiative, and the actual impact of that initiative even if successfully implemented; changes in stock-based compensation; changes in amortization or depreciation expense due to a variety of factors; potential write downs, reserves against or impairment of assets including receivables, goodwill, intangibles (including media content) or other assets; changes in tax laws, our business or other factors that would impact anticipated tax benefits or expenses; our ability to successfully identify, consummate and integrate acquisitions; our ability to retain key customers and key personnel; risks associated with litigation; the impact of governmental regulation; and the effects of discontinuing or discontinued business operations. From time to time, we may consider acquisitions or divestitures that, if consummated, could be material. Any forward-looking statements regarding financial metrics are based upon the assumption that no such acquisition or divestiture is consummated during the relevant periods. If an acquisition or divestiture were consummated, actual results could differ materially from any forward-looking statements. More information about potential risk factors that could affect our operating and financial results are contained in our annual report on Form 10-K for the fiscal year ending December 31, 2012 filed with the Securities and Exchange Commission ( http://www.sec.gov ) on March 5, 2013, and as such risk factors may be updated in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations. Furthermore, as discussed above, the Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.