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Demand Media Responds To Google Panda Issue, Focuses On Socially-Drive Products

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The Google Panda algorithm which was launched to combat what the company calls “Content Farms” was successful in killing traffic for various big content providers including Hubpages, Suite101 and most notably properties owned by Demand Media (Ehow, Livestrong, Cracked, etc.) and now Demand Media CEO Richard Rosenblatt is offering some insight into how the company plans to combat future losses.

Rosenblatt told Forbes:

“We’re in the process of expanding our platform to act as a socially-driven recommendation engine for content,” while he added, “This is much like what Amazon does for products or Netflix does for movies. We believe we are uniquely positioned to do this because our platform was designed from the beginning to integrate consumer signals.”

Demand Media plans to target their visitors “interest graph” which in turn will provide them with suggestions to keep users on their website and coming back for more information.

The movie towards socially-driven traffic is important to the company after Panda causes EHow’s revenues to fall by 8 percent quarter over quarter, a big drop for a site which constitutes 32 percent of Demand’s total revenues.

In the meantime Google referrals have fallen to 59 percent of the company’s traffic, down from 66 percent during the same period one year ago. Overall Demand’s fiscal revenue is expected to drop by 6 percent.

Demand Media has also provided some good signs for their future, for example their domain registrar business increased by 32 percent to $79.5 million, while their 3 cents per share loss was far better than last years period which witnessed a 75 cent per share loss.