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Demand Media Considering A Separate Co. For Registrar, Registry & Aftermarket

Posted on the 19 February 2013 by Worldwide @thedomains

Demand Media (DMD) today announced that its board of directors has authorized a plan to explore separating its business into two independent, publicly-traded companies:

  • A pure-play media company with a powerful outsourced content creation platform that organically grows its audience, leading web properties that reach over 100 million monthly unique visitors, and an integrated monetization platform that incorporates branded, network and mobile revenue streams; and
  • A pure-play domain services company that would be the only end-to-end provider offering registry services, expansive wholesale and retail distribution, and comprehensive aftermarket services.

“Both businesses have grown to become leaders in their respective markets, and we now want to provide additional operational and strategic flexibility to drive sustainable growth,” said Richard Rosenblatt, Chairman and CEO, Demand Media. “We believe a separation will position each business to better pursue its specific strategic priorities and vision, as well as improve transparency for investors and enable the capital markets to better assess each company’s value, performance and potential.”

Rosenblatt added: “We intend to appropriately capitalize both companies to pursue their distinct growth opportunities, such as the upcoming launch of new generic Top Level Domains that is a transformative event for our domain services business, as well as further diversifying our content offerings in our media business.”

“Demand Media anticipates that the potential transaction will be in the form of a tax-free distribution to U.S. stockholders of new publicly traded stock in the domain services company. The Company expects that the completion of this transaction could take place in the next nine to twelve months. ”

This would be a very interesting move by Demand separating the content and traffic business away from the Registry, Registrar and domain Aftermarket.

Demand of course owns the world’s second largest domain name registrar and recently acquired a registrar with around 1.5 million domains under management.

Demand also applied for 26 new gTLD’s in its own name and with Donuts for another 107 new gTLD’s.

Demand is also the back end provider for all of Donuts 307 new gTLD applications.

Demand Media, Inc. also owns part of a large domain name aftermarket channel that is also competing for business in the new gTLD landrush, auction and aftermarket space.

If all of these businesses were in a separate company from Demand’s eHow and content business would that part of the company be more attractive than the whole?…

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