Pops On Open, Great News for Domain Industry — Demand Media

Domain name firm gets nice lift in initial public offering.

Shares in Demand Media (NYSE: DMD) have popped 40% on open to just over $23 a share following pricing yesterday at $17, above the anticipated range of $14-$16.

This is good news for the domain name industry. Demand Media owns domain name registrar eNom, parking firm HotKeys, part of NameJet, and a sizable portfolio of domain names. It’s true that much of the firm’s growth is coming from its content businesses such as eHow, but the underpinning and stable revenue base comes from domain names.

Demand Media pulled this off despite recent questions regarding its accounting practices as well as rumblings from Google that it will look into “content farms”, which many people say was a direct attack on Demand Media.

Public firms trade for larger multiples than private ones, which means the economics of acquisitions change. While Demand Media focuses on growing its eHow-like properties, don’t be surprised if it flirts with acquisitions of other domain registrars, parking firms, and more domain portfolio owners.