Aims for 2007 IPO — Demand Media

Demand Media, founded by former MySpace executive Richard Rosenblatt earlier this year, hopes to go public in 2007.

When Business 2.0 published an article in December 2005 called “Masters of Their Domains”, many in the domain industry sighed. They knew that a bunch of people would read the article and believe they could still get rich with domain names. An employee of a domain parking firm told me that following the article appeared they got calls from people who had just registered a domain and hoped to earn thousands in parking revenue.

One of those “newbies” who read the article was MySpace.com ex Richard Rosenblatt. Since reading the article he has raised $220M in capital for his domain firm, Demand Media. The firm bought registrars eNom and BulkRegister and is snapping up domains left and right. His goal is to turn these domains into destinations with user-generated content (a la MySpace).

Raising $220M in less than a year is quite an accomplishment. But Rosenblatt isn’t stopping there. As stated by a Business 2.0 article called “Giving the Audience Its Own Domain” (December 2006), he plans to take the firm public near the end of 2007 and achieve a $2B market cap the following year.

Ahead of he can do that, Rosenblatt must prove that users will contribute content to his niche domains — and that he can scale the process. Running thousands of user communities across various industries is easier stated than done. Furthermore, it’s unclear how the registrar acquisitions will further this plan.

But one thing is for sure. Money is flowing into the domain name market, benefiting almost everyone in the industry.