Richard Rosenblatt Bids Adieu to Demand Media

The Co-founder, Chairman and CEO of leading content and social media company Demand Media resigned as Chairman and CEO on Oct 14, 2013. The company’s co-founder Shawn Colo will serve as interim CEO until such time as the board finds a replacement. Rosenblatt’s departure comes at a time when Demand Media is planning to split itself into two publicly traded companies, one offering domain registry services, and the other dedicated to how-to articles. The company has announced that there are no changes to the plan in the wake of Rosenblatt’s resignation.

Why the sudden exit?

Rosenblatt did not cite a reason for his departure. It is speculated that the company’s waning financial performance may have some something to do with his exit. Demand Media’s share price has fallen 66% since its initial public offering back in January 2011. In June, the company lowered its second quarter revenue expectations to $100 million-$101 million, down from its earlier estimate of $105 million-$107 million. The reason for the lowered estimate was a decrease in search engine referral traffic to owned-and-operated websites in May and June this year.

Demand Media under Rosenblatt

The son of a nuclear physicist and a homemaker, Los Angeles-born Rosenblatt is a serial entrepreneur. As CEO of the now-defunct, he made MySpace a hot and happening social network in the early 2000s. He launched Demand Media in May 2006 with Princeton University alumnus and financial acquisition specialist Shawn Colo. The duo wasted no time in acquiring a number of websites,
relaunching them with professionally-generated and user-generated content, and using social media tools to reach out to the billion-odd web user base.

Running multiple content-rich websites required a smart mathematical strategy combined with an editor- and writer-friendly approach. Rosenblatt’s brainwave – which paid off extremely well for its assets eHow, and among others – was to pay editors and writers a small upfront fee and a generous share of ad revenue. His approach as a publisher was also different, with a focus on creating content for which there is a requirement, rather than trying to guess what readers want to read.

Rosenblatt faced some hiccups along the way. In 2011, insinuations that the Google Panda algorithm update, which was supposedly aimed at content farms (though Google did not officially confirm this) with shallow or low-quality content, elicited a response from Rosenblatt. He said that Demand Media’s sites were not content farms, and the tag was an insult to the company’s vast network of writers.

In a USA Today article, Rosenblatt admitted to being a workaholic, starting his day at 4 am and making time to drop his kids off to school. His wife Lisa said he never stopped thinking, and could answer a question completely even when asleep in the middle of the night.

What Rosenblatt does in the future remains to be seen. Knowing the man, it is quite unlikely that he has hung up his entrepreneurial boots forever.