Demand Media at a loss!

I was reading an article today on CNN Money. Saying that Demand Media were in losing money not making money. Well, they justify it by saying that they see the upfront fee they pay their freelancers as a capital investment. Like buying a house or land. They don't see it as an immediate cash in. They are trying to build a strong arm of content over a period of time. They will then make that money back over a five year period. Therefore they are not looking to make immediate money with that side of the business. However; many people don't know that Demand Media runs a domain name registry business as well. Most of their revenue comes from there. Many finance pundits have been calling their business model unusual. But I actually beg to differ with this. I do believe that the more content they make, they will eventually get that money back and then some over a period of time. What Demand Media are doing is no different from people who pay other writers to write content for their website. Everybody knows that content is king, therefore they need that content to be able to sell advertising in the first place. Just like you would do with a traditional newspaper format. No content, no advertising, no business.

I do believe that if you write about what people want to read and what people are searching for,oh and if you write enough of it. You will eventually get paid back for it. I mean think about the amount of time spent on writing blog posts and articles for your website. You might not be getting paid for it now, but the more you write, the more you will get out of it. You are investing time, and eventually you will get that investment back and then some. This is what Demand Media are doing, except they are investing hard cash, they know that small fee they pay will over time generate more money for them. This is not about Google Adsense either, they use Vibrant as well which places in text adverts. They affiliate with hundreds if not thousands of different businesses, they make money through that. They also sell independent adverts, as well as Google Adsense. Therefore if you think you are going to make money from Google Adsense alone in this day and age you are sadly mistaken. You have to have multiple streams of income on your website or blog to see any money coming through at all.

I am going to leave at that with the Demand Media thing but I am going to say that, if you want to work with them I am not going to discourage you. Because you can make some extra money with them. There is nothing wrong with making a little bit of extra money now is there.

Thanks for reading guys.