How 2011's Web IPOs fared

Echoing the dot-com boom a decade ago, a wave of Internet companies with lots of buzz but shaky business models went public this year. Here's how they've held up.

Demand Media
Demand Media

Ticker: DMD
IPO date: January 26
IPO price: $17
Now trading at: $8.06
Revenue for first 9 months of 2011: $240 million
Loss for first 9 months of 2011: $15 million

Demand Media's January IPO kicked off 2011 with a pop. Shares of the online content creator closed 33% higher on its debut day, valuing the company at more than $1.5 billion.

It was a surprising debut, considering the criticisms that plagued Demand's road to the stock exchange. Demand CEO Richard Rosenblatt had insisted for years to media outlets including Fortune that his company was profitable. But in its IPO filing in August 2010, Demand disclosed that it was more than $6 million in the red for the year so far. It posted a net loss of $22 million in 2009.

Demand also faced criticism of its unorthodox accounting methods. Demand doesn't expense the cost of paying its writers upfront, as content companies typically do. Instead, it spreads those costs over five years, which boosts its bottom line.

Analysts marveled at the content churned out -- "It was amazing. They literally wrote 2 million articles in a year," an analyst commented to Fortune last month -- but Demand's method isn't working as well as it once did. In February, Google rolled out a change to its algorithm that pushed articles like Demand's lower in search results.

Demand stock managed to hold around its highs for the first quarter of the year, but it's been a sharp and steady decline ever since. Shares have lost more than 65% far in 2011.

"Now trading at" is the stock's close on 12/5/2011.
By Julianne Pepitone @CNNMoneyTech - Last updated December 07 2011: 5:54 AM ET
Join the Conversation
Most Popular

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.