Intouch Autumn/Winter 2007-08

Shaking up a storm

We catch up with the man who helped turn MySpace into a global phenomenon and find out how his latest, 3i-backed business, Demand Media, is transforming the way users interact with the web.

Q: What’s behind the rise ofuser-generated content on the web?
A: Two age-old motivations: people like to express themselves and they want to be famous. It’s pretty cool to think that millions of people from around the worldwho you’ve never met can see your pictures, read your words and see your videos. We saw this clearly drive the growth of MySpace. Four years ago it didn’t exist. In 2008, it will likely generate more pages than anything else on the web – not to mention $800m in revenue.

Q: How is users’ interaction with the web changing?
A: The next wave of growth is going to be around social networking and communities – we’re using the term ‘social media’ because social networking is limited. Social media will expand into multiple content verticals, bringing together groups of people with shared interests. Demand Media has sites that specialise in key verticals, such as golfing, hiking, aviation and casual gaming. For instance, www.golflink.com has emerged in a little over a year as one of the top golfing sites on the web, equal to or ahead of  GA.com, through the addition of social media tools. And our site www.airliners.net has a community that generates 80 million pages a month just from users putting up pictures and talking about aviation.



Q: Is the content itself evolving?
A: We think people are ready to take the next step. Presently, most user-generated content gets contributed for free but in the near future people are going to earn money for producing it – and it’s going to be more targeted. At Demand Media we’re creating platforms for publishing, including www.ehow.com for text and www.expertvillage.com for video. Ultimately there’s an entirely new publishing model emerging in which you can be an independent content creator and get paid.

Q: How does ‘publish and get paid’ work?
A: Let’s say I write an article on how to make a great margarita. Demand Media provides a publishing platform to create the article, web sites to distribute the article, and technology to optimize and monetize the content. Our technology tracks how much my content earns for all types of revenue on my article pages and pays me a percentage. Just that one article could make me $100 this year and it only took me 20 minutes to write.

Q: Do you know which articles will be popular?
A: Yes – that’s the ‘secret sauce’ that’s got everyone so excited. We can predict what an article will be worth even before we publish. Demand Media has a domain registry business which has an eight-year history of tracking which domains are bought and sold and which ads are clicked on and which aren’t. We also have proprietary technology that tracks key information, such as the search terms people use and the traffic generated by key words. We’ve combined all that knowledge to create an algorithm that tells us how much a particular piece of content can earn.

Q: How does this work with video contributions?
A: We take a title that our research tells us will be high value – say ‘Tips for an eco-friendly home’ – and we put that into our marketplace of ideas on ExpertVillage.com, where thousands of film-makers are part of our community. They ‘check out’ the available titles and then produce the videos on that topic using our suggested format within 30 days. We review, edit and distribute them on our network. It’s an amazing concept. In the last year, 20,000 videos have been created in that way and we’re adding 5,000 a month. The potential audience is huge – there are 123 million online video viewers in the US alone.



Q: Do you need expert contributors to maintain quality?
A: I think the line between independent and expert content creators is starting to blur. It’s not always clear what an expert is. Clearly someone with a PhD in biophysics is an expert in their field but who’s an expert in the best way to cook jambalaya? Our tools are getting better and better at letting users determine who’s an expert – and if you are, you’ll get paid handsomely because more people will read your article, watch your video and click on your ads. The web is great at letting people determine for themselves what’s quality content and what’s not.

Q: Following your huge success with MySpace, why did you choose this direction?
A: We started Demand Media because we saw that social media was going to expand beyond amorphous social networking portals. We hope to continue to lead this trend by empowering the next generation of creators to generate valuable targeted content. That benefits us – and it benefits them.

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