October 12, 2011, 12:34 PM — There's trouble on the content farm.
Demand Media, famous for polluting the Internet with low-quality "how to" articles, is trying to get back into Google's good graces by making a concerted effort to produce better online content.
That means fewer $15 assignments to write "How to Turn On a Computer," which doesn't sit well with some of Demand's poorly-paid-but-could-use-the-money-anyway freelancers.
Demand Media's freelance writers are up in arms after Demand Media decided to slim the number of writing assignments it offers.
The company once known strictly as a "content farm," is cleaning up is content, with a stronger emphasis on high-quality writing from knowledgeable authors.
Of course, Demand's actions are driven less by its desire to better serve Internet society and more by its wish to stop being punished by Google for junking up its search results with garbage content.
Early this year Google announced a change to its algorithms designed to "reduce rankings for low-quality sites" -- an initiative dubbed "Panda" -- that appeared to be aimed right at Demand Media.
In April, reports showed that visibility in Google searches for eHow.com -- Demand's flagship site and content farm central -- plummeting 66% since the Panda update.
Less search visibility means less traffic, less revenue and lower share price, so in response Demand announced plans to lighter on content "junk food" and heavier on more nutritious (and presumably SEO-friendly) fare. Which also means fewer, but higher-paying, articles.
It's easy to empathize with the freelancers. After all, no one likes to lose paying gigs. But the jury (Google) spoke to Demand last spring, and the verdict was "guilty" of crappy content. If Demand continues down that low-quality road, its "Google problem" will only get worse.
Which would be a disaster for shareholders, who already have suffered through a long, slow deterioration of Demand's stock price since the company went public in January at $17.
Early Wednesday afternoon, shares of Demand (NYSE: DMD) were at 7.15, less than one-third of their 22.65 value at the end of the first day of trading on Jan. 25. Even relatively good news in early August (lower quarterly losses and a stronger revenue outlook) and a $25 million share buyback in late August failed to stop the company's relentless stock-price slide.
If only the early public shareholders had listened to the voice of reason back in January, they wouldn't be in this position now.