Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Social networking startup poised for IPO

by Aaron Smith, staff writer


NEW YORK (CNNMoney.com) -- Social networking startup Demand Media is preparing an initial public offering and has hired Goldman Sachs as an underwriter, according to a report published Friday.

Demand Media, a $1.5 billion company founded by former MySpace chairman Richard Rosenblatt, plans to file its initial public offering by August with Goldman Sachs (GS, Fortune 500) at the helm, the Financial Times reported.

Goldman Sachs has already served as one of the chief sources of funding for the company, raising $355 million since 2006 in conjunction with Oak Investment Partners, Spectrum Equity Investors and Generation Partners, according to the report.

Demand Media, one of the lead suppliers of video content to YouTube, and Goldman Sachs both declined to comment.

Sal Morreale, IPO expert for Cantor Fitzgerald, said it was too early to tell what kind of price the company would try to get for a public launch. But he said there will definitely be an enormous amount of interest on Wall Street, given the Internet presence of Demand Media and its potential backing by a financial heavyweight like Goldman.

"If this is the main supplier of content to YouTube, obviously it will attract some action, depending on pricing," he said. To top of page

Index Last Change % Change
Dow 18,308.15 164.70 0.91%
Nasdaq 5,312.00 42.85 0.81%
S&P 500 2,168.27 17.14 0.80%
Treasuries 1.61 0.05 3.28%
Data as of 12:33pm ET
Company Price Change % Change
Procter & Gamble Co 89.75 1.52 1.72%
Bank of America Corp... 15.65 0.49 3.23%
Chesapeake Energy Co... 6.27 0.15 2.45%
Wells Fargo & Co 44.28 -0.09 -0.20%
Cognizant Technology... 47.71 -7.29 -13.25%
Data as of Sep 30
Sponsors

Sections

On September 8, Americans learned that Wells Fargo had fired 5,300 employees for secretly creating as many as 2 million unauthorized accounts. It's been a hellish month for the bank. Lawmakers have called Wells Fargo a "criminal enterprise" guilty of a range of crimes, including conspiracy to commit fraud and have called on the CEO to resign. More

China is no longer offering Venezuela new loans, according to experts. It spells bad news for Venezuela, which relied heavily on Chinese finance. More

These startups are helping landlords and cities sniff out illegal short-term rentals. More

U.S. Labor Secretary Tom Perez writes about why the Labor Department introduced a new rule requiring federal contractors to provide paid sick leave to workers. More