SYS-CON MEDIA Authors: Roberto Medrano, Dmitriy Stepanov, Gilad Parann-Nissany, Srinivasan Sundara Rajan, Sean Houghton

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Demand Media Focuses Advertising Strategy on Premium Programmatic

Demand Media, Inc. (NYSE: DMD), a leading content & media and domain name services company, today announced that its selling efforts will be focused exclusively on the Company’s premium programmatic offering. This offering makes it easier for advertisers to customize placement, audience and budget parameters for each campaign. While this decision will result in the elimination of Demand Media’s premium display salesforce, the Company will continue to work with a select group of strategic advertisers to service existing premium display campaigns.

“Our audience is ideal for this type of advertising. They come to our sites when they are ready to take action, and this move will facilitate advertisers reaching them at precisely that moment,” said Shawn Colo, interim chief executive officer of Demand Media. “We see significant opportunity to enhance our consumer experience through increased investment in content and product innovation and are actively hiring across the organization to support this strategy.”

Demand Media’s premium programmatic offering gives advertisers a more efficient and flexible option for accessing more than 80 million unique visitors that make up Demand Media’s intent-driven audience across its owned and operated network. Advertisers now have preferred access to inventory, flexible pricing options and the advantage of proprietary audience targeting within more than 3,000 available segments. Demand Media has the largest Home & Garden audience in the US and is in the top 10 in several other commercial categories.1

1 comScore, December 2013

About Demand Media

Demand Media, Inc. (NYSE: DMD) is a leading digital content & media and domain name services company that informs and entertains one of the internet’s largest audiences, helps advertisers find innovative ways to engage with their customers and enables publishers, individuals and businesses to expand their online presence. Headquartered in Santa Monica, CA, Demand Media has offices in North America, South America and Europe. For more information about Demand Media, please visit www.demandmedia.com.

Cautionary Information Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Statements containing words such as may, believe, anticipate, expect, intend, plan, project, and estimate or similar expressions constitute forward-looking statements. Statements regarding the Company’s future financial performance are based on current expectations, estimates and projections about our industry, financial condition, operating performance and results of operations, including certain assumptions related thereto. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Forward-looking statements involve risks and uncertainties including, among others: our ability to successfully shift our advertising sales function from direct sales to a premium programmatic sales offering, and the impact such shift will have on our advertising revenues, operations and capital allocations; our ability to successfully establish our businesses internationally; our ability to complete a separation of our business into two independent public companies as previously announced and unanticipated developments that may delay or negatively impact such a transaction; the possibility that we may decide not to proceed with the separation of our business as previously announced if we determine that alternative opportunities are more favorable to our stockholders; our ability to retain key personnel; changes in the methodologies of internet search engines, including ongoing algorithmic changes made by Google as well as possible future changes, and the impact such changes may have on page view growth and driving search related traffic to our owned & operated websites and the websites of our customers; our ability to effectively monitor the quality of search traffic to our undeveloped websites; the inherent challenges of estimating the overall impact on page views and search driven traffic to our owned & operated websites based on the data available to us as internet search engines continue to make adjustments to their search algorithms; changes in our content creation and distribution platform, including the possible repurposing of content to alternate distribution channels, reduced investments in intangible assets or the sale or removal of content; continued deterioration in the market capitalization of the Company, which may result in an impairment of certain intangible assets on the Company’s balance sheet; our ability to effectively integrate, manage, operate and grow a crowd-sourced e-commerce website such as Society6; our ability to manage risks associated with the sale of goods over the internet; our ability to successfully launch, produce and monetize new content formats; our ability to compete with new or existing competitors; our ability to continue to drive and grow traffic to our owned & operated websites and the websites of our network customers; our ability to effectively monetize our portfolio of content; our dependence on material agreements with a specific business partner for a significant portion of our revenue; future internal rates of return on content investment and our decision to invest in different types of content in the future, including premium video and other formats of text content; our ability to attract and retain freelance creative professionals and artists; changes in our level of investment in media content intangibles; the effects of changes or shifts in internet marketing and advertising expenditures, including from text to video content as well as from desktop to mobile content; the effects of shifting consumption of media content from desktop to mobile; the impact of seasonality on our e-commerce business; our ability to expand our customer base and meet production requirements; our ability to develop additional adjacent lines of business to complement our growth strategies; potential write downs, reserves against or impairment of assets including receivables, goodwill, intangibles (including media content) or other assets; and changes in tax laws, our business or other factors that would impact anticipated tax benefits or expenses. More information about potential risk factors that could affect our operating and financial results are contained in our annual report on Form 10-K for the fiscal year ending December 31, 2012 filed with the Securities and Exchange Commission (http://www.sec.gov) on March 5, 2013, as such risk factors may be updated in our quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, including, without limitation, information under the captions Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations. The Company does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.

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