Demand Media raises $120 million for a bunch of shell Websites
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Here’s news that former MySpace.com chairman Richard Rosenblatt, has raised $120 million to create a company called Demand Media to buy up or create a bunch of generic Web sites that have no staff generating real content of their own.
Rather, they will exist simply in hope you will land there either by mistake, confusion or idle curiosity — and to make money when you land there by having advertisers (provided by the likes of Yahoo and Google) pay for your click through to that site. The company is now also busy buying up cheap ways to feed content into the sites, and hopes to rely on the public to produce stuff too.
The financial backing comes from Spectrum Equity Partners, Oak Investment Partners and Generation Partners, according to the WSJ.
One example mentioned is www.flashgames.com, which doesn’t even have games. All it offers is a list of links to other game sites. Yet it earns revenue of more than $150,000 a year selling online ads, or so the article says. Ridiculous, if true. No word on where this company is based.
(Update: 5/3, added the link to the company’s Web site above. The company is based in Los Angeles, with offices in Seattle, according to the site).
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
