Demand Media to Explore Separating Business into Two Publicly-Traded Companies

Demand Media® (NYSE: DMD) today announced that its board of directors hasauthorized a plan to explore separating its business into two independent,publicly-traded companies: * A pure-play media company with a powerful outsourced content creation platform that organically grows its audience, leading web properties that reach over 100 million monthly unique visitors, and an integrated monetization platform that incorporates branded, network and mobile revenue streams; and * A pure-play domain services company that would be the only end-to-end provider offering registry services, expansive wholesale and retail distribution, and comprehensive aftermarket services.“Both businesses have grown to become leaders in their respective markets, andwe now want to provide additional operational and strategic flexibility todrive sustainable growth,” said Richard Rosenblatt, Chairman and CEO, DemandMedia. “We believe a separation will position each business to better pursueits specific strategic priorities and vision, as well as improve transparencyfor investors and enable the capital markets to better assess each company'svalue, performance and potential.”Rosenblatt added: “We intend to appropriately capitalize both companies topursue their distinct growth opportunities, such as the upcoming launch of newgeneric Top Level Domains that is a transformative event for our domainservices business, as well as further diversifying our content offerings inour media business.”Demand Media anticipates that the potential transaction will be in the form ofa tax-free distribution to U.S. stockholders of new publicly traded stock inthe domain services company. The Company expects that the completion of thistransaction could take place in the next nine to twelve months. Executing thistransaction requires further work on structure, management, governance, andother significant matters. Over the next several months, Demand Media'smanagement, working with outside advisers, intends to develop detailed plansfor the board's further consideration and approval.This transaction is subject to a number of conditions, including finalapproval of the transaction by Demand Media's board, favorable tax rulings andopinions regarding the tax-free nature of the transaction to Demand Media andto its stockholders, further due diligence as appropriate, and theeffectiveness of required filings with the Securities and Exchange Commission(“SEC”). There can be no assurance that the separation of Demand Media'sbusiness as described in this announcement will occur.