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Demand Media Launches into e-Learning with the Acquisition of Creativebug



  Demand Media Launches into e-Learning with the Acquisition of Creativebug

  Creativebug at the Forefront of the Emerging “Create it Yourself” Movement

Business Wire

SANTA MONICA, Calif. -- March 19, 2013

Demand Media® (NYSE: DMD) today announced the acquisition of Creativebug, the
go-to source for high-quality, online video art and craft instruction.
Creativebug’s network of exceptional designers and library of educational
videos complements the crafts-related content on Demand Media’s eHow web
property. The acquisition will accelerate Demand Media’s expansion into
e-Learning.

“We’re seeing a ‘disruption and reinvention’ in the way that people are
learning new skills. They are increasingly going online to learn both
practical and creative skills, and we believe this convergence has huge
potential,” said Joanne Bradford, Chief Marketing and Revenue Officer, Demand
Media. “Instead of browsing at a bookstore or attending a class at the local
community college, people are going online to learn from a world-renowned
expert at a time that fits their schedule, accessing online videos from their
smartphone, tablet or desktop.”

“Creativebug masterfully leveraged the e-learning and craft trend in the
emerging ‘Create it Yourself’ movement to become a leader in this market,”
added Dan Brian, Executive Vice President of Media. “We’ve seen interest in
craft-related content on eHow grow more than 20% on average every year over
the last three years. We’re sprinting to keep up with demand, adding 29% more
video content over the same period. Millions of people who visit eHow every
month will be able to access Creativebug’s video workshops led by the top
artists and designers in the world. We’re thrilled to add the passionate
Creativebug team to the Demand Media family.”

“Creativebug represents a community of true believers. From our employees to
our customers and instructors, everyone at Creativebug has experienced
firsthand the obsession and addiction of being an artist/designer/crafter,”
said Jeanne Lewis, Founder and CEO of Creativebug. “We take pride in doing
everything thoughtfully, from filming high quality videos that illustrate the
exquisite detail of hand-stitching to hand-delivering donations to our
favorite local causes. We decided to join Demand Media because they care
deeply about content and communities, and we are glad that we can offer our
instructors a broader platform to reach more people.”

Growing Market Opportunity

The worldwide e-learning market is estimated to be about $91 billion^(1). In
the US alone, the craft market has become a $30 billion dollar^(2) industry
and more than 58% of all households have crafted at least once in 2011^(2).
Demand Media has seen the consumer demand for e-learning and renewed interest
in the contemporary crafts reflected in eHow’s metrics. In 2012, eHow.com
attracted almost 50 million visitors^(3) who viewed more than 100 million
pages^(3) in the top craft categories of knitting, sewing, jewelry-making,
wood-working and more.

^(1)IBIS Capital, Global e-Learning Investment Review January 2013
^(2)Craft & Hobby Association, CHA Attitude & Usage Study Update, June 2011
^(3)Internal company data

About Creativebug

Based in San Francisco, Creativebug is the go-to source for online video art
and craft workshops featuring some of the most well-respected designers in the
craft word. Users can pay per class or get a subscription for unlimited
classes to learn the art of sewing, knitting, jewelry-making, printmaking and
more.

About Demand Media

Demand Media, Inc. (NYSE: DMD) is a leading digital media and domain services
company that informs and entertains one of the internet’s largest audiences,
helps advertisers find innovative ways to engage with their customers and
enables publishers, individuals and businesses to expand their online
presence. Headquartered in Santa Monica, CA, Demand Media has offices in North
America, South America and Europe. For more information about Demand Media,
please visit www.demandmedia.com

Cautionary Information Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, as amended. These forward-looking statements involve risks and
uncertainties regarding the Company's future financial performance, and are
based on current expectations, estimates and projections about our industry,
financial condition, operating performance and results of operations,
including certain assumptions related thereto. Statements containing words
such as guidance, may, believe, anticipate, expect, intend, plan, project,
projections, business outlook, and estimate or similar expressions constitute
forward-looking statements. Actual results may differ materially from the
results predicted, and reported results should not be considered an indication
of future performance. Potential risks and uncertainties include, among
others: our ability to successfully integrate Creativebug and expand into
e-learning; changes in the methodologies of internet search engines, including
ongoing algorithmic changes made by Google as well as possible future changes,
and the impact such changes may have on page view growth and driving search
related traffic to our owned and operated websites and the websites of our
network customers; changes in our content creation and distribution platform,
including the possible repurposing of content to alternate distribution
channels, reduced investments in intangible assets or the sale or removal of
content; our ability to successfully launch, produce and monetize new content
formats; our ability to diversify into new initiatives such as paid content;
the inherent challenges of estimating the overall impact on page views and
search driven traffic to our owned and operated websites based on the data
available to us as internet search engines continue to make adjustments to
their search algorithms; our ability to compete with new or existing
competitors; our ability to maintain or increase our advertising revenue; our
ability to continue to drive and grow traffic to our owned and operated
websites and the websites of our network customers; our ability to effectively
monetize our portfolio of content; our dependence on material agreements with
a specific business partner for a significant portion of our revenue; future
internal rates of return on content investment and our decision to invest in
different types of content in the future, including premium video and other
formats of text content; our ability to attract and retain freelance creative
professionals; changes in our level of investment in media content
intangibles; the effects of changes or shifts in internet marketing
expenditures, including from text to video content as well as from desktop to
mobile content; the effects of shifting consumption of media content from
desktop to mobile; the effects of seasonality on traffic to our owned and
operated websites and the websites of our network customers; our ability to
continue to add partners to our registrar platform on competitive terms; our
ability to successfully pursue and implement our gTLD initiative, and the
actual impact of that initiative even if successfully implemented; changes in
stock-based compensation; changes in amortization or depreciation expense due
to a variety of factors; potential write downs, reserves against or impairment
of assets including receivables, goodwill, intangibles (including media
content) or other assets; changes in tax laws, our business or other factors
that would impact anticipated tax benefits or expenses; our ability to
successfully identify, consummate and integrate acquisitions; our ability to
retain key customers and key personnel; risks associated with litigation; the
impact of governmental regulation; and the effects of discontinuing or
discontinued business operations. From time to time, we may consider
acquisitions or divestitures that, if consummated, could be material. Any
forward-looking statements regarding financial metrics are based upon the
assumption that no such acquisition or divestiture is consummated during the
relevant periods. If an acquisition or divestiture were consummated, actual
results could differ materially from any forward-looking statements. More
information about potential risk factors that could affect our operating and
financial results are contained in our annual report on Form 10-K for the
fiscal year ending December 31, 2012 filed with the Securities and Exchange
Commission (http://www.sec.gov) on March 5, 2013, and as such risk factors may
be updated in our quarterly reports on Form 10-Q filed with the Securities and
Exchange Commission, including, without limitation, information under the
captions Risk Factors and Management’s Discussion and Analysis of Financial
Condition and Results of Operations.

Furthermore, as discussed above, the Company does not intend to revise or
update the information set forth in this press release, except as required by
law, and may not provide this type of information in the future.

Contact:

Demand Media
Investor Contact:
Julie MacMedan
310-917-6485
Julie.MacMedan@demandmedia.com
or
Media Contact:
Jean Lin
310-319-6854
Jean.Lin@demandmedia.com
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