Can someone please explain this in simple terms that a totally ignorant lay person can understand? This sounds significant, but I haven't a clue what you're talking about.
Would it be you folks who write the sort of information articles that show up when I Google "How to build a trebuchet?" And something is happening to your livelihood?
Demand Media is a company that built up a base of articles designed to attract online advertising. Their most used product was (and probably still is) a website called eHow. ehow articles seek to answer the question of how to do something.
eHow was doing well in google rankings. To do well in google rankings means it shows up in the first few results when you enter in a search term. Advertisers are willing to pay for people to come visit their sites.
One of the ways of bringing in ad revenue is to use a method called SEO or Search Engine Optimization. SEO seeks to find specific works that advertisers are interested in. A word might be a product like electric shavers. It might also be a service like getting an MLS degree. Some words are worth more than others.
The SEO approach is often twofold. You may want to attract lots of people and use highly searched keywords that get a lot of traffic. You can also look for words that have less traffic but fewer competitors.
eHow articles were originally written by laypeople who were not necessarily writers but good at something like baking a tuna casserole. They would write up an article indicating how to make the casserole. Advertising would appear for items like say Starkist tuna right next to the article. Readers would ideally click the ads for the brand. The writer of the article and the owner of the site would get money for the click.
Similar sites such as Suite 101 came along to take up the same idea.
Demand Media was partially formed after eHow to offer more professional articles written by more skilled writers. Writers were and are paid a flat fee instead of a percentage of ad revenues. Writers were also given the option of writing articles and accepting a percentage of the profits. This is known as revenue sharing or rev sharing for short.
Google eventually decided that this site -- and similar sites -- lacked credibility and did not provide the information their readers were looking for. In April of this year they instituted new rules to their search engines. This is known as panda. Panda reduced the chances that an article by eHow or similar content mill would appear on the first page of a search.
DS has been responding to this problem by increasing standards for articles (although not increasing pay) to see if the articles in question can still attract ad revenue and earn money. They've been laying off writers left and right and lowering the number of titles available for writers.
I personally have followed this story closely as I've written both for eHow directly and for Demand Media.
My personally feeling is that revenues aren't that bad. I probably have one of the largest collection of rev share articles of any writer (nearly 400). DS just sent my paypal account nearly $440 for last month alone. My rev shares are humming along this month as well.
So I think DS may revamp but they're probably still making a nice chunk of change. I would still diversify as much as possible. But that's always been the case with DS. They were never reliable. Some weeks I could find a few dozen titles I could write in less than ten minutes. At other times it would take me an hour of searching to find a handful of possibly writeable titles.
The editorial staff there is overly demanding and utterly unreliable. They want high quality and they want to pay pennies for it. This has always been true. Fortunately I have two very well paid online jobs so I was never reliant on them for any real income. I strongly suggest others do the same.
