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Demand Media Rises on Plan to Split Content, Domain-Name Units

Demand Media Inc., operator of the EHow.com website, rose as much as 24 percent in extended trading after the company announced plans to split its content and domain-registration businesses into two public companies.

Demand Media jumped as high as $9.75 after closing at $7.84 in regular New York trading. The shares had fallen 16 percent this year before the breakup was announced in a statement after today’s close.

The board-approved separation will allow both businesses to pursue growth strategies and provide greater clarity for investors, the Santa Monica, California-based company said in the statement. The company said it’s working with outside advisers to develop detailed plans for separating the businesses.

Through EHow.com, Demand Media offers articles and videos on topics ranging from personal finance to celebrity news. The content business includes the Cracked.com humor website. The company also operates the domain-registration service ENom.com.

Separately, the company reported fourth-quarter net income of $4.7 million, or 5 cents a share, compared with a loss of $6.4 million, or 8 cents, a year earlier. Revenue rose 22 percent to $103.1 million.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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