Winter 2011/12 Digital Edition

Strike gold once, and some critics will call you lucky. Do it twice, and it's a freak coincidence. For visionary innovator Richard Rosenblatt, however, finding profitability in online platforms has become a lucrative habit. Since the mid-'90s, the 40-year-old entrepreneur has been instrumental in some of the most revolutionary aspects of user-generated online content.

In the early '90s, Rosenblatt created iMall, one of the first sites that made it possible for small businesses to open an online store. AT&T subsidiary Excite@Home purchased iMall in 1999 for a substantial, undisclosed amount. From there, Rosenblatt went on to serve as CEO of Intermix Media, Inc., and chairman of its prized jewel, MySpace.com, building it into a massively popular online property. It was then that Rosenblatt had an epiphany that led to an idea for his next venture. "MySpace is growing so fast," he recalls thinking, "[and] there's billions of impressions a day, but the audiences aren't batching up. It's completely scattered and there's no direction to it."

The Woodland Hills native recognized the vast potential for building a network of sites that provided specialized, searchable content. "What if," he reasoned, "you could create the topic, connect it with an audience that wants that topic, and monetize it?" (Easier reasoned than executed.) The key was how to sustain a model of growth that would keep up with the pace of the next new wave of innovation.

In 2006, six months after News Corp bought MySpace, Rosenblatt formed Demand Media, basing operations in Santa Monica. After acquiring a few specialized sites, the next step was to create virtual libraries of searchable articles and features, using a skilled pool of freelance writers and editors who could work from any home office, Starbucks, or any other online access portal in the world.

Whereas articles and titles generated for online content had been primarily SEO-based up to that point, Demand Media incorporated a more expansive core of data sources as well, according to Rosenblatt. "Social data, search data, direct traffic data from the 100 million people that visit our website every month, we put that all together and out come titles," he explains.

Well over 4 million articles have been generated using this model, most of which populate Demand's three marquee properties: general knowledge site eHow, comedy site Cracked.com, and health and wellness site LIVESTRONG.com. Rosenblatt bought eHow with the intention of creating the first online knowledge network of commercial topics created by a professional workforce. Cracked.com, an online rebranding of the decades-old comedy mag, is now the most-visited comedy site on the Web, according to Rosenblatt. Whereas eHow's content is SEO-optimized, Cracked.com relies on its viral impact to propagate its content.

Rosenblatt approached friend Lance Armstrong and the LIVESTRONG Foundation with the idea of building LIVESTRONG.com as a health/wellness information site. "We did a deal with them to license the name forever, he says. "We own the perpetual life of LIVESTRONG.com, and we launched that from scratch two and a half years ago." Now the largest health site on the Web, Rosenblatt said LIVESTRONG.com gets 17 million hits a month.

When it comes to the quality of the vast quantity of material Demand produces, the process is always being fine-tuned. "We take all kinds of feedback very seriously," he says. "When you produce four million pieces of content, if you even get 99.9 percent right ... that's 4,000 [mistakes]. So someone's going to find some [erroneous] content. When we get that kind of open feedback, we adapt."
Not one to sit back on his heels and wait for the competition to catch up, Rosenblatt and his team are devising Demand's next steps forward. "We're creating more content for social media. You've seen Facebook and Twitter, how fast it's going, so we're creating more content that will be shared in social media. We're creating more content for mobile [and] more international content," Rosenblatt promises. "We'll have our studio content in five languages by year's end. We're creating content in Spanish, Portuguese, German, Italian, and French. And we also want to expand into different content formats -- not just article and video, but much more expansive."

"One of the biggest challenges we face," admits Rosenblatt, "is explaining our business – because it's so new – and keeping up with pace of innovation." Asked to elucidate the point, he offers: "I think the key is to have a very open mind to all new things and embrace them – and to actually try [them]. One of the things I've forced myself to do is whenever there's a new type of technology, a new website, a new thing, is to join it and actually use it. So I love the iPhone, but I've also tried the Android, the Blackberry, and now I've gone back to the iPhone. And as a new format comes out, I'll try that."
Rosenblatt devours tech blogs such as Tech Crunch and All Things Digital as well as numerous random blogs to keep up with the ever-shifting stream of progress, while Newsweek and The Wall Street Journal still satisfy his occasional preference for printed news material.
"There's no question things are going to the mobile, in a big way," he predicts. "You could be carrying all your media, all your music, everything you need, in a hand-held device. It'll probably replace the computer. There'd be no reason to have a computer anymore." So is typing doomed to become a lost "art"? Rosenblatt responds. "On Android, have you seen this thing, Swipe, where you drag your finger around it? I tried it and it was really cool. In between Siri on the iPad where you can talk, I think our kids probably will not be typing very much. Just like we don't hand-write [as much]."

Rosenblatt admits that in just five years, Demand Media has grown even faster than he'd anticipated. "Now we're focused on how [to] continue to grow at that rate. When you get big it's harder to keep getting bigger, so we're focused on all our new platforms that we can expand our model to." Although no acquisitions of note are currently pending, Rosenblatt says if a strategic opportunity comes along that makes sense for Demand Media, he will be ready to pursue it.

It's interesting to note that in spite of overwhelming supporting evidence, Fortune Magazine did not name Rosenblatt as Smartest CEO in its 2010 "The 50 Smartest People in Tech" feature. But, then again, finishing as a runner-up to Steve Jobs is no small feat.